Gold miner Kingsgate Consolidated has given shareholders little hope of any quick rebound in output at its Challenger mine in South Australia, forecasting no improvement in the year ahead.
Bought for $376 million in late 2010, the Challenger mine has underperformed since its acquisition, with Kingsgate forecasting no production uplift in the year ahead after problems emerged earlier this year.
June quarter output at the mine fell to 19,647 ounces from 21,893 ounces in the March quarter, and 27,825 ounces in the December quarter, as costs rose to $US1660 an ounce in the June quarter from $US1536 in the March quarter.
Kingsgate shares were recently down 3 cents, or 0.6 per cent, to $4.71.
The continued poor performance of the Challenger mine held total June quarter production to 61,835 ounces, up marginally from March quarter output of 60,614 ounces, with the cash cost little changed at $US1,057 an ounce (compared with $US1,053 in the March quarter).
The performance of the Challenger mine was hampered by ongoing issues of equipment availability early in the quarter and a gearbox failure later in the period, Kingsgate said.
And no quick improvement in the Challenger mine's operation is expected, with the company forecasting an "in line" performance for fiscal 2013.
This poor result will leave the Chatree mine in Thailand to carry the burden of boosting group output.
Kingstage is forecasting an unspecified increase in gold production for fiscal 2013, and at its Chatree mine, higher throughput will be offset by lower grades.
Earlier, Kingsgate forecast gold production would run at 230,000 ounces for the year to June, which proved to be optimistic, with output coming in at just 208,760 ounces.