Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
(Reuters) – Gold miner Avocet Mining Plc reported a 49 percent drop in first-half revenue as the West Africa-focused company’s gold production declined.
Total gold sold halved to 21,377 ounces in the six months ended June 30 from a year earlier, with an average price of $1,235 an ounce, compared with $1,213 last year, the company said.
Restructuring discussion with the creditors of Avocet Mining’s unit that operates the Inata gold mine in Burkina Faso led to a halt in the mine’s production, the company said.
The subsidiary is struggling to keep the mine operational after former workers seized a shipment of gold last year, and is facing possible insolvency after the expiry of a freeze on loan repayments.
Avocet said it was reviewing security measures at the Inata mine, which produced 72,485 ounces of gold in 2016, after unknown attackers killed two paramilitary police officers and wounded two others in an assault on a convoy carrying fuel last week.
Avocet reported a pretax loss of $5.5 million for the first half, compared with a profit of $3.9 million, a year ago.
Revenue fell to $26.4 million in the period from $51.8 million.
