JOHANNESBURG (miningweekly.com) – LSE-listed Trans-Siberian Gold (TSG) is targeting gold production of between 36 000 oz and 40 000 oz in 2018, with the upper end of the range representing a 9% year-on-year increase in total output.

This follows a strong performance in 2017, when the Russia-focused miner exceeded its guidance, producing 36 714 oz. The performance was on par with 2016’s output of 36 225 oz.

In addition, in the last quarter of 2017 it finished the year strongly with a record quarterly gold production of 12 244 oz.

A report on the gold production for the first quarter of 2018 is expected in April.

Underpinning the company’s positive outlook is the expectation of increasing the average gold head grade by about 26% to 8.3 g/t.

However, TSG anticipates some cost inflation, especially for power generation, noting that total cash costs are nonetheless expected to fall year-on-year to within the range of between $650/oz and $680/oz.

Capital expenditure forecast for 2018 is about $11-million, which is in line with expenditures for 2017, the company said on Friday.

TSG further highlighted that its unaudited revenues for 2017 were about $43.5-million, with operational challenges in the first half of 2017 having resulted in a pre-tax profit of $0.5-million.

While operations improved significantly in the second half of 2017, the mining company said that it had expected the drop in pre-tax profit from $8.7-million of 2016.

Unaudited net debt at the end of the period was about $12-million; however, the re-financing of the company’s debt facilities in June 2017 lowered its borrowing costs by more than 30%.

For the full year ended December 2017, TSG highlighted that it expects operational cash flow to be about $10.1-million.

“Looking to the year ahead, we expect the company to be strongly cash generative, with cash generated from operations returning to levels of around $20-million,” the statement said.

TSG will maintain its dividend policy of returning cash to shareholders.