Allied Gold hopes for sparkling 2012

published 24 January 2012

FTSE250 miner Allied gold has said it aims to up production by 75% in 2012 as it improves recovery methods and efficiency.

In the year to the end of December, the firm took 108,338 ounces of gold out of the ground.

It predicts this will rise to around 180,000 ounces in 2012 from its sites in Papua New Guinea and the Soloman Islands.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

The firm added that its average realised gold price in the final quarter of 2011 was $1,695 per ounce, up 24% year-on-year.

Allied chief executive, Frank Terranova, said 2011 had been a year of mixed fortunes for the company.

"During 2011 we redeveloped and recommenced production at Gold Ridge [in the Solomans], battled with mechanical issues at both sites and still produced over 108,000 ounces of gold," he said.

"2012 will be an exciting year for Allied as we look to initiate a number of new projects to improve recoveries, increase efficiencies on site and in general reduce cash costs."

The firm said its Gold Ridge site had increased production and as this continued the cash costs should reduce towards its target of $850 per ounce by the end of 2012.

At Simberi, in Papua New Guinea, the firm forecasts a marked improvement in key indicators in 2012, with operational expansion to be completed, increasing production levels, as well as investments in fuel initiatives helping to lower costs and increase reliability.