Currently viewing Global edition

Avesoro still in doldrums

West African gold producer Avesoro Resources says it continues to struggle with production issues at its mines in Burkina Faso and Liberia, with output well down on last year, as major shareholder, Turkish businessman Murathan Gunal, proceeds with a privatisation bid with the company sitting on about US$145 million of debt and cash of only US$6.3 million at the end of September.
Avesoro still in doldrums Avesoro still in doldrums Avesoro still in doldrums Avesoro still in doldrums Avesoro still in doldrums

Avesoro Resources' Youga gold operation in southern Burkina Faso

Staff reporter

At Youga in Burkina, "production and unit cost performance will continue to be impacted by low grade ore from the Zergore pit", the company said this week.

"Ore production will be reduced, and unit cost underperformance is expected in Q4 2019" was the outlook for New Liberty in Liberia.

Avesoro says it's still planning to push ahead with planned underground mine development at New Liberty in the first half of next year.

The two mines are now forecast to produce 140,000-145,000oz this year (AISC at US$1,431/oz in the first nine months), compared with 220,000oz in 2018 at more than $1,200/oz and earlier 2019 guidance (September) for 180,000-200,000oz at AISC of $1,152-1,248/oz. The forecast 2019 production split at this stage is 70,000oz from New Liberty and 75,000oz from Youga, where operations were suspended in August after a security breach.

Avesoro said extra mining and auxiliary equipment brought in by a mining contractor in October was expected to improve mining productivity in the fourth quarter. Year-to-date output of 49,378oz is down 45% on the same period in 2018.

New Liberty, 100km northwest of Monrovia, produced 52,736oz to the end of September this year, 38% less than last year.

A pit wall and ramp failure in October has cut ore mining rates and blown out costs. "Higher waste stripping is expected in the short-term as access to the Kinjor pit remains restricted and to complete the final open pit pushback," Avesoro said.

Meanwhile, Gunal's Avesoro Jersey's £1/share formal bid to pick up minority interests in the company is underway.

Negative EBITDA was reported for the September quarter and Gunal "reconfirmed his commitment to continue to provide such financial support as the company requires for its continued operation as the effects of the transition to contractor mining and other cost saving initiatives settle down", Avesoro said.

"Provisional" group production of 5,500oz in October remained below budget forecasts.