Improved gold production from its Shandong Province operation in China and reduced cash costs per ounce resulted in Majestic Gold improving EBITDA for the nine months to June 30, 2016. The adjusted EBITDA for the first three quarter of the 2016 financial year was $901,633, up from $388,598 in the corresponding period of the 2015 financial year.
Gross profit for the June quarter was $914,095 compared to a gross loss of $436,386 for the corresponding period of 2015. Gross profit for the nine months was more than $1.293 million compared to a loss of $293,474 in the corresponding period.
Gold production from the Songjiagou mine was 5006 ounces for the quarter, up from 4605 ounces in the June quarter of 2015 and gold sales revenue for the 2016 quarter was $6.7 million from the sale of 5305 ounces at an average realised gold price of US$1260 per ounce. This compared to sales revenue in the 2015 quarter of $2.8 million from the sale of 2251 ounces.
In the nine months to June 30, 2016 there were 17,717 ounces produced, up from the 14,476 ounces produced in the corresponding period of the 2015 financial year,
For the June quarter cash costs were $976 per ounce, down from $1290 in the 2015 quarter, and all-in sustaining costs were $1272 compared to $1551.
Tonne milled at Songjiagou were 340,225 tonnes with an average head grade of 0.50 grams/tonne (g/t), compared to 374,457 tonnes milled with an average head grade of 0.43 g/t for the June quarter of 2015.
Majestic entered into a new two year non-binding Letter of Intent (LOI) with Yantai Baiheng Gold Mining Co Ltd on July 11, 2016. The new LOI supersedes the August 6, 2015 LOI and allows the company an additional 24 months for due diligence on the Shuang Shan Tun and Xia Yu Cun properties, located in the Muping-Rushan Gold Belt in Shandong Province.
Currently focused solely in China, Majestic Gold is a British Columbia based company engaged in commercial gold production at the Songjiagou Gold Project in eastern Shandong.