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Guyana Goldfields shares plummet on production difficulties

Shares in Guyana Goldfields have plummeted 30% as it reported ongoing production difficulties at its Aurora gold mine in Guyana.
Guyana Goldfields shares plummet on production difficulties Guyana Goldfields shares plummet on production difficulties Guyana Goldfields shares plummet on production difficulties Guyana Goldfields shares plummet on production difficulties Guyana Goldfields shares plummet on production difficulties

Aurora in Guyana

Staff Reporter

The company, yet to appoint a new CEO to replace the ousted Scott Caldwell, saw its mining rate fall 11% compared with the previous quarter to 51,500 tonnes per day due to pit constraints imposed by smaller benches and reduced working faces, heavy rainfall and a three-day work stoppage. The mill processed 6,900tpd, a 12% decrease from the prior quarter, as a result of management reducing the throughput rates to maximise recoveries.

The company reported production of 22,100oz in the third quarter to September 30 at an all-in sustaining cost of US$1,882/oz, bringing its total for the first nine months of 2019 to 96,000oz.

"We have embarked on a comprehensive mine, production and cost savings review plan to make the necessary changes and improvements to increase productivity and profitability," said interim CEO Allen Palmiere.

"Since assuming the interim CEO role on July 31, 2019, I've taken a hands-on, first principles approach to reviewing all operations, identifying the challenges and opportunities, and we are in the process of reviewing the overall mine plan. Our reviews have confirmed … the mine plan requires further review in order to maximise the value of Aurora."

Management initiated a comprehensive mine, production and cost savings plan review to make changes and improvements to increase productivity and profitability. The result of the review is expected to be delivered in the first quarter of 2020.

Guyana had cash and equivalents of $24.8 million at the end of September. It expects cash and cash flow from operations to fund planning work, accelerated stripping and underground development for the remainder of 2019 and 2020.

Production in the fourth quarter is expected to improve as mining moves back into the primary ore zone within Rory's Knoll, however, full year production is expected to be below guidance.

Shares in Guyana Goldfields are trading at C51c, valuing the company at $129 million.