Trans-Siberian Gold plc (TSG.LN), a low cost, high grade gold producer in Russia, announces its production update at the Asacha Gold Mine for the three months ended 31 March 2020 ("Q1" or the "Period").

Alexander Dorogov, Chief Executive Officer of TSG, commented:

"Our utmost priority at this uncertain time is the health and well-being of our employees amidst the global pandemic. Having implemented stringent precautionary measures, our operations continue without disturbance. Moreover, we are beginning to incur cost benefits driven by the lower oil prices as well as the connected devaluation of the local currency.

In spite of the slowdown this quarter, we are trading in line with management expectations and retain a positive outlook on our annual production reiterating our full-year 2020 guidance of 38,000 - 42,000 ounces . Our drilling campaign is demonstrating some exciting results, and we now expect to initiate production at Vein 25 sooner than planned. We look forward to providing an update on this during the next quarter.

The results for this quarter must be put into perspective against an exceptionally strong prior-year performance, which remains the Group's record to date, and which we are hopeful to outperform in the future."

Q1 Highlights

  • Average realised gold price for the period rose by 22% YoY to $1,599 (Q1 2019: $1,312)
  • Average gold grade of 5.2 g/t (Q1 2019: 8.8 g/t)
  • Total revenues of $9.3million (Q1 2019: $16.2million)
  • Annual gold production guidance for 2020 of between 38,000 and 42,000 ounces maintained
  • Dividend base case of approximately $3 million per annum maintained
  • Delineation of +1Moz JORC Mineral Resource Estimate for the Rodnikova Gold Deposit
  • Significant progress at Vein 25 of the East Zone of Asacha, with expectation of bringing this higher grade ore-body into production shortly
  • 10,371m of the planned 25,000m of the 2019-2020 drill campaign over the Asacha licence area completed during Q1
  • 5 minor lost-time injuries during the period

Covid-19

Currently there is no material impact to TSG's production from the COVID-19 virus, and the Group has risk mitigation structures in place.

However, the Company notes that supply chains and logistics for people, supplies and parts are under pressure and continually changing. The Company's dollar-denominated revenue from gold sales remains strong in a supportive gold price environment. The majority of the Group's operational costs are rouble-denominated and have fallen due to foreign exchange movements.

Outlook

The Group continues to deliver on its strategic priorities. Shareholders can expect the Company to provide progress updates on the following activities in due course:

  • Drilling results from Main and East Zones of the Asacha Gold Mine
  • Financial Results for the Financial Year ended 31 December 2019
  • Scoping Study for the Rodnikova Gold Deposit
  • Commencement of mining at the East Zone of the Asacha Gold Mine

2020 Guidance

The Company reiterates full year 2020 gold production guidance of between 38,000 and 42,000 ounces, as announced in January.

Production Summary

Mining and production data for Q1 2020 at the Asacha Gold Mine is shown in the following table:

Q1 2020
Metric  Q1
2019
Q1
2020
Y-on-Y
% Change
Q4
2019
Q-on-Q
% Change
Mine development (m) 2,020 1,541 -23.7% 1,452 6.1%
Ore extracted (tonnes) 34,839 34,009 -2.4% 34,050 -0.1%
Ore processed (tonnes) 44,746 44,221 -1.2% 48,573 -9.0%
Grade, gold (g/t) 8.8 5.2 -41.3% 6.0 -13.5%
Grade, silver (g/t) 27.7 19.2 -30.5% 22.4 -14.0%
Recovery, gold (%) 95.4 94.5 -0.9% 95.0 -0.5%
Recovery, silver (%) 81.0 78.6 -3.0% 76.0 3.4%
Gold in dore (oz) 12,345 6,859 -44.4% 8,970 -23.5%
Silver in dore (oz) 32,158 21,691 -32.5% 27,084 -19.9%
Gold refined (oz) 11,857 6,035 -49.1% 9,287 -35.0%
Silver refined (oz) 30,874 22,205 -28.1% 24,429 -9.1%
Gold sold (oz) 11,949 5,837 -51.2% 12,302 -52.6%
Silver sold (oz) 36,329 0 -100.0% 24,577 -100.0%
Gold price ($/oz) 1,312 1,599 21.9% 1,489 7.3%
Silver price ($/oz) 15.5 0.0 -100.0% 17.5 -100.0%
Gold Revenue* ($,000) 15,674 9,333 -40.5% 18,324 -49.1%
Silver Revenue* ($,000) 563 0 -100.0% 429 -100.0%
Total Revenue* ($,000) 16,238 9,333 -42.5% 18,753 -50.2%

* Note: Unaudited figure

Totals may not add up due to rounding

Commentary

It has been a busy and productive start to the year delivering against our priorities for 2020.

Mine production in Q1 2020 follows on from Q4 2019 as gold mineralisation in the Main Zone becomes lower in grade and more erratic at depth, as indicated in previous announcements. This vertical zonation is typical of epithermal systems. Lower grade stoping ore was required to be blended with existing stockpiled ore, which resulted in a lower average mill feed grade. The mine plan and management budget for 2020 anticipated lower grades in the first half of the year. In line with our plan the Group expects to commence mining in the East Zone of the Asacha Gold Mine, which contains significantly higher grade ore, this year. There has been significant mine development progress in the East Zone and the Group is on track to bring this ore-body into production ahead of schedule.

During Q1, 10,371m of the planned 25,000m of the 2019-2020 drilling campaigns at the Main and East zones of the Asacha Gold Mine has been completed as of the end of Q1 2020. The first drilling results from that campaign have been very positive, as announced in January, and the Group intends to provide an update on progress shortly.

In addition, the Group published a JORC-compliant Mineral Resource Estimate for the Rodnikova deposit in Q1; total Indicated & Inferred Resources of 6.3Mt at a grade of 5g/t gold, for total contained +1Moz of gold.

The Group remains on track to deliver an initial scoping study for the Rodnikova deposit by the end of Q2 2020. This study will assist in de-risking the project by establishing the framework for understanding the economics of future mine development scenarios and will also provide guidance for near-term exploration programmes to maximise the delineation of further economic mineralisation.

Contacts:

TSG
Stewart Dickson
+44 (0) 7799 694195

Arden Partners plc
Paul Shackleton (Corporate Finance)
Tim Dainton / Fraser Marshall (Equity Sales)
+44 (0) 207 614 5900

Hudson Sandler (Financial PR)
Charlie Jack / Katerina Parker / Elfreda Kent
+44 (0) 207 796 4133

About TSG

TSG is focused on low cost, high grade mining operations and stable gold production from its 100% owned Asacha Gold Mine in Far East Russia. The Company also holds the licence for the development and exploration of the Rodnikova deposit, one of the largest gold fields in South Kamchatka.

Additional information is available from the Company's website: www.trans-siberiangold.com

Market Abuse Regulations

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR'). Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

Abbreviations

g/t: grammes per tonne
oz: ounce
m: metre

Disclaimer

This announcement contains "forward-looking statements" - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should" or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behaviour of financial and metals markets, fluctuations in interest and/or exchange rates and metal prices; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different that those expressed in our forward-looking statements.

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