Production at Gualcamayo for 2011 is expected to be in line with guidance.
Cash costs were $507 per ounce in the quarter, compared with $443 per ounce in the first quarter of 2010. Management continued to reduce cash costs from the $662 per ounce level in the fourth quarter of 2010 down to the current level.
In 2011, the Company will focus on a number of operational initiatives, including efforts in sustaining the 1,500 tonne per hour feed through the mills, fleet expansion, underground development of QDD Lower West and expansion of heap leach pad at Valle Norte. In addition, the Company will continue to work on reducing reliance on contractors for increased cost predictability. Gold production for the second half of 2011 is expected to increase based on continuing higher grades, increases in crusher availability and throughput tonnage, and, by the end of the year, improved recovery at the new heap leach pad.
The Company's interest in the Alumbrera Mine is accounted for as an equity investment. The Company recorded earnings from its 12.5% interest in Alumbrera Mine of $11.7 million for the first three months ended March 31, 2011, similar to the earnings reported for the first quarter of 2010. The Company received $20.0 million in cash distributions during the three months ended March 31, 2011 compared with $12.9 million cash received in the first quarter of 2010.
Attributable production from Alumbrera was 11,374 ounces of gold and 7.1 million pounds of copper for the quarter. This compares with attributable production of 13,755 ounces of gold and 11.8 million pounds of copper for the first quarter of 2010.
Agua Rica, Argentina
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