Dacian Gold (ASX:DCN) share price down 8% on quarterly activities report

Shares in the small cap gold producer are tumbling after missing production and cost guidance.

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The Dacian Gold Ltd (ASX: DCN) share price has tumbled today after the company released its June quarter and FY21 activities report.

Earlier, the Dacian Gold share price was down 8%. At the time of writing, shares in the gold producer and explorer have recovered slightly but are still down 4.84% to 30 cents.

Why the Dacian Gold share price is sliding

The Dacian Gold share price has been pushed lower this morning as investors respond to its quarterly activities report.

At the time of writing, approximately 7 million shares have traded hands. To add some perspective, its 10 day average volume is approximately 2.5 million.

According to the release, Dacian Gold produced 25,558 oz of gold in the June quarter, at an all in sustaining cost (AISC) of $1,742/oz.

The company's total FY21 production came in at 106,919 oz at an AISC of $1,552/oz.

The Dacian Gold share price might be responding negatively to the fact that these operational figures missed the company's full year guidance of 110,000 to 120,000 oz at an AISC of $1,400 to $1,550/oz.

Looking ahead

Dacian Gold is targeting FY22 production guidance of 100,000 to 110,000 oz at an ASIC of $1,550 to $1,700/oz.

The company said that it is "embarking on a significant growth investment … for the long term", allocating $20.4 million to exploration and $66.5 million to project development.

According to the announcement, an update regarding life-of-mine for Mt Morgans and the Redcliffe project is on track for release later in the September quarter.

What did management say?

Dacian Gold Managing Director, Leigh Junk commented on the result, saying:

Whilst we delivered a robust production result for FY2021, we did fall slightly short of our planned target for the quarter. Dacian has had a significant year nonetheless with the acquisition of Redcliffe, further reductions in our debt and hedge positions, completion of over 160,000 m of exploration and resource definition drilling and re-positioning our exploration strategy towards making the next generation of discoveries, all contributing to our growth-focused endeavors ahead in FY2022.

We are keen to soon reintroduce high-grade ore from the Westralia mine area into our production profile and are busy working towards developing the Redcliffe project into production. Our upcoming life-of-mine plan will be the Company's first opportunity to bring all these projects into a base case mine plan for our Laverton operations and we look forward to completing that work this quarter.

About the Dacian Gold share price

The Dacian Gold share price has tumbled 36% year-to-date, hitting a 2-year low of 25.5 cents on 30 June.

However, it isn't just Dacian Gold that's struggling.

Household ASX gold shares such as Northern Star Resources Ltd (ASX: NST) and Evolution Mining Ltd (ASX: EVN) have also slumped this year, down 19% and 7.2% this year.

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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