Gold producer Beacon Minerals (ASX:BCN) has entered into a 14,000-ounce forward gold contract to be delivered in monthly instalments from November 2023 to June 2024.
Beacon reports that the forward contracts are a significant increase on the sale price from the 30 September 2023 quarter average Australian gold price of $2,924 and is a material increase on the sale price realised for the 12 months to 30 June 2023 average price of $2,703.
The average of $3,112 per ounce for 65% of Beacon’s budgeted production for the months of November 2023 to June 2024 is a significant improvement on the previous quarter, the company notes.
Full-year guidance for 2023/24 is 27,000 to 29,000oz. Entering into the forward contract has secured a portion of Beacon’s monthly gold sales over the next nine months at the forward gold contract gold price.
Some 35% of the company’s gold will be sold at spot rates.
With the MacPhersons Project in Coolgardie ore coming online late December/early January Beacon says it is considered prudent to ensure the gold price is secured during the early production from MacPherson.
The forward sale facility agreement was entered into between the company and MKS (Switzerland), a corporation with headquarters in Switzerland. The facility with MKS is effective on and from 22 November 2023 and expires 21 June 2024.
The purpose of the forward facility is hedging Beacon’s gold price exposure in relation to the Jaurdi Gold Project and to provide a secure cash margin on a portion of Beacon’s future gold production.
Beacon Minerals is a gold producer based in the Eastern Goldfields of Western Australia.
Since the purchase of Jaurdi Gold Project leases in 2017, Beacon has reestablished the Jaurdi Hills as a gold producing region. The maiden mineral resource was completed in 2017 for Lost Dog followed by Prefeasibility Studies and project approvals through 2018. First gold was poured in 2019 from the newly commissioned 100% owned Jaurdi processing plant.
In 2021, Beacon acquired the 100% owned MacPhersons Project in Coolgardie from Hanking Australia Investments. The MacPhersons Project added ready to mine open pit reserves from MacPhersons Reward and Tycho which can be leveraged against a rising gold price. The MacPhersons Project is within 50km of the Jaurdi Mill and offers significant exploration potential away from current resources.
Beacon Minerals moved to an owner-operator mining model to de-risk equipment availability and to capitilise on favourable finance conditions and project profitability. Beacon now owns most of its mining and crushing fleet.
Write to Adam Orlando at Mining.com.au
Images: Beacon
