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Avesoro restarts Youga

Shares in Toronto-listed Avesoro Resources rose Monday as mining and gold processing restarted at the Youga mine in Burkina Faso following talks with the contractor and former openpit employees.
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Mining and processing at Youga have restarted

Staff Reporter

Avesoro was forced to suspend operations last week at Youga after openpit employees refused to work following a move to contractor mining at both Youga and the New Liberty mine in Liberia. This was aimed at reducing costs and increasing volumes, Avesoro said.

Youga openpit workers refused to work as a result of a "temporary" reduction in operating performance and "associate inefficiencies".

As a result of the disruption, Avesoro cut 2019 production guidance to between 180,000-200,000oz gold, from 210,000-230,000oz before. The company reaffirmed the reduced guidance now that work has restarted.

CEO Serhan Umurhan said he was pleased to report operations at Youga had now restarted following a successful resolution of negotiations between the mining contractor Orkun Group and its former openpit mining employees.

"My ongoing focus remains to minimise the impact of the temporary production stoppage at Youga, whilst successfully delivering the remaining transition to contractor mining operations at both Youga and New Liberty," he said.

He said the company was assessing several project optimisation options, including ore sorting and heap leach scenarios at both New Liberty and Youga, with aims to further improve the economics of both projects.

The stock closed 16% or 12c higher in Toronto on Monday at 87c, still less than half its value less than a month ago. The company has a market capitalisation of $70.97 million.