What’s Leading Alacer Gold to surge on ASX?

Alacer Gold Corp. (ASX: AQG), a turkey-focused gold miner is on a surge amid high gold production and high future production guidance. The financial performance of the company is also steady, which is adding to the rise of the stock price on various stock exchanges such as Canada Stock Exchange (CSE: ASR) and Australian Stock Exchange (ASX).

Following the status-quo on gold prices, gold prices are oscillating around $1295, which marks a rise from $1160.34 (XAU) level seen in August 2018. The rise in the prices of the yellow metal is a likely impetus for the company to explore the high-grade targets and produce more gold to take advantage of the current prices and to lock on the future stream of cash inflows.

The company has announced that 4,120,183 CDIs have been converted into common shares (no impact on issued common shares) and 648,264 common shares have been converted into CDIs.

Alacer Gold Corporation:

The company recently presented its BMO update, in which company represented 2019 production guidance of 320Koz—380Koz of gold with an All-in-sustaining-cost (AISC) in the range of $675--$725 per ounce. The company produces both gold oxide and gold sulfide to meet high production.

As per the company’s BMO update, the company is adopting an organic growth strategy and currently operating its Copler Oxide plant, Copler Sulfide plant and Cakmaktepe Oxide plant. The near-term growth story of the company is based on Ardich deposit, and Medium-term growth is based on Gediktepe.

Oxide Plant:

The company successfully identified and is developing two sources of oxide ore in 2019 with Copler and Cakmaktepe mine. So far, it has completed Cakmaktepe phase 1 ore stacking and a 20MT heap leach pad expansion study. As per the company, the Copler in-pit exploration is going on, and it has the potential to add to the production profile of the company. Alacer, kept the production guidance for 2019, from the oxide plant, in the range of 90k—110k and treated 2.1M of oxide, with an average grade of 1.60g/t of gold with AISC in the range of $700--$750 per ounce.

Cakmaktepe is 50% owned by the company with the rest 50% with Lidya Mining and the 80% ore production from the project will be attributable to Alacer.

Sulfide Plant:

The company’s copler sulfide plant is ramping up as planned, and the commercial production is expected in early 2019. The sulphide production guidance for 2019 is in the range of 230k—270k and treated 1.7M of sulfide, with an average grade of 4.75g/t of gold with AISC in the range of $600--$650 per ounce.

In the Ardich deposit, the company identified an indicated mineral resource of 29kozs and an inferred mineral resource of 85kozs, based on the first 55 of holes drilled. The company is expected to present a resource update in the first half of 2019.

Location Perks:

The operational location of the company is in Turkey, which has a good infrastructure as a 190MW Hydroelectric Dam is just below the Copler Mine, and it also has a 4-lane highway and railway by copler mine. The county has modern mining laws with quality local joint venture partners.

The company investment exceeds $100M in exploration and approx. $320M is invested in Copler Oxide operations and approx. $660M invested in Copler Sulfide Operations.

The large investment and new explorations and project, positions company to ramp up the production and take advantage of high gold prices.

During the time of writing this report, the shares of the company are trading at A$3.840 (as on 11th March 2019), up by 12.536% as compared to its previous close.


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