The S&P/ASX 200 Index (ASX: XJO) is having a pretty decent day today, rising 0.59% at the time of writing to 6,810 points.
But the Saracen Mineral Holdings Limited (ASX: SAR) share price is doing one better. Saracen shares are currently up 2.18% to $5.15 a share.
Now that’s not the kind of outperformance to write home about. But, as they say, winning is winning.
So why are Saracen shares climbing today?
It would probably be due to a quarterly update this ASX gold miner released to the market just before open this morning. The data covers the quarter ending 31 December 2020.
Saracen reports strong production
This morning, Saracen told investors that gold production for the quarter came in at 155,122 ounces. Saracen achieved this with an all-in sustaining cost (AISC) of $1,224 (~US$950) per ounce.
That’s the highest quarterly production cost of the company’s last 4 quarters. In the previous quarter, Saracen reported an AISC of $1,169 per ounce.
Even so, the company reports that it is on track to meet its FY202 guidance of 600,000-640,000 oz of gold at an AISC of $1,300-1,400 per ounce. This guidance is broken down into 220-240Koz from the company’s 50% interest in the KCGM mine, 240-250Koz from the Carosue Dam project and 140-150Koz from Thunderbox.
In a development shareholders might find exciting, Saracen also announced that the company’s net cash now stands at $183 million.
That consists of $466 million in cash and liquid assets and $283 million of debts. This position is a significant improvement for the ASX gold miner, considering it’s net position was $21 million in debt just 9 months ago.
Saracen has committed $484 million in capital and exploration costs for FY2021.
In light of the rising gold price of the last year, Saracen reported that its ‘hedge book’ is “easing to ~20% of production over the next 3 year period”.
Saracen also commented on its upcoming merger with fellow ASX gold miner Northern Star Resources Ltd (ASX: NST).
Saracen reiterated that the shareholder vote on the matter was “virtually unanimous” (with 99.95% of shareholders voting in favour) and described the merger as a “flight to 2Moz”. The company’s nuptials with Northern Star are scheduled to be completed on 15 February.
If the merger goes ahead (as expected), Saracen also recommitted to paying a special and fully franked dividend of 3.8 cents per share.