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Avesoro's March quarter disappoints

West African gold producer Avesoro Resources has turned in weaker than targeted performances at its New Liberty and Youga gold mines in Liberia and Burkina Faso, respectively, with both hit by plant throughput issues.
Avesoro's March quarter disappoints Avesoro's March quarter disappoints Avesoro's March quarter disappoints Avesoro's March quarter disappoints Avesoro's March quarter disappoints

Avesoro is in talks for contractors to take over openpit mining at New Liberty

Total gold production from the two mines fell 34% year-on-year to 45,098 ounces from 628,000 tonnes of ore processed, down 3%, although the volume of ore mined during the quarter rose 3% to 609,000 tonnes.

CEO Serhan Umurhan said performance at both mines had been "slightly behind" the company's targeted production levels for the quarter, mostly due to lower plant throughput at both. 

Gold output was Youga was particularly weak, falling 52% on the year to 19,243oz, with the 5% higher volume of ore processed offset by the feed grade falling 54% to 2.07g/t.

Umurhan said additional lower grade ore blocks were mined at Youga during the quarter, which combined with unexpected ore dilution to impact the average grade of mined ore at the Gassore pit.

"In response to this, smaller excavators are now being used to reduce dilution whilst the haulage capacity of our existing haul trucks has been increased to ensure required ore volumes are transported to the ROM pad," he said.

At New Liberty, gold production slipped 7% year-on-year to 25,855oz from 308,000t of ore processed, down 10%, at a feed grade of 3g/t, 3% higher than a year ago.

Umurhan chalked the lower production up to a lack of available ore faces within the pit during the early part of the quarter, although he said this had been resolved with an increased focus on waste stripping, with availability of ore expected to be maintained for the remainder of the year.

Despite missing the quarterly targets, Avesoro has maintained its full-year guidance of 210,000-230,000oz, with Youga due to contribute 90,000-100,000oz and the rest from New Liberty.

Umurhan said Avesoro was in advanced discussions with an openpit mining contractor at New Liberty.

If the stalks are successful, the contractorias expected to reduce mining costs below the company's "already very attractive" internal cost per tonne, provide access to additional mining equipment and outperform the original production guidance at the mine.

Investors also seemed disappointed with the results, with Avesoro's shares (AIM:ASO) down 6.48% Thursday to £1.17 (US$1.53), which was also down from £1.82/share six months ago.