Trans-Siberian Gold PLC said Jan. 11 that it is set to slightly exceed the upper end of its production guidance of 40,000 ounces of gold for 2018 and revealed that it struck a new electricity supply deal that will "substantially" reduce its costs in 2019.
The gold producer, listed on the London Stock Exchange's AIM segment, was trading up by over 11% at 38.40 pence per share by early afternoon.
Gold grades at Trans-Siberian's wholly owned Asacha mine, near the southern tip of Russia's Far Eastern Kamchatka peninsula, improved again in the fourth quarter of 2018 from an average of 7.8 g/t in the third quarter, which should result in annual production coming in slightly above the upper end of its 2018 guidance range of 36,000 to 40,000 ounces.
Trans-Siberian did not specify how much gold grades improved in the fourth quarter, but it reported that it struck a new electricity supply deal with Public Joint Stock Co. Kamchatskenergo at a reduced rate of 4.69 Russian rubles per kilowatt hour, made possible by an initiative the Russian government introduced to support developing the country's sparsely populated Far East.
"We are making continuous improvements at the Asacha gold mine which are delivering real results," Trans-Siberian CEO Alexander Dorogov said. "Power is a significant production cost and we are pleased to have secured a substantial cost saving with the support of the regional government of Kamchatka."
The Asacha mine has measured and indicated resources containing 391,000 ounces of gold and 1.1 million ounces of silver within 611,000 tonnes grading 20 g/t of gold and 56 g/t of silver, according to an updated resource estimate released at the end of May 2018.
As of Jan. 10, US$1 was equivalent to 67.01 Russian rubles.