West Africa-focused gold miner Avesoro Resources (TSX, AIM:ASO) disappointed investors after reporting Thursday a steep drop in first quarter gold production, with performance missing board targets.
The Canadian gold producer churned out 45,098 ounces of the precious metal in the first three months of 2019, flat quarter-on-quarter, but 34% lower than in the same period a year earlier.
Avesoro churned out 45,098 ounces of gold in the first three months of 2019, flat quarter-on-quarter, but 34% lower than in the same period a year earlier
Avesoro attributed the output drop to lower plant throughput at its New Liberty mine in Liberia and its Youga asset in Burkina Faso. The company maintained guidance for 2019 of between 210,000 ounces and 230,000 ounces of gold.
New Liberty produced 25,855 ounces of gold in the quarter, a 5% increase on the fourth quarter of 2018. Youga’s production of 19,243 ounces in the quarter fell 6% on Q4 2018. In 2018, Avesoro’s total output was 220,458 ounces.
For 2019, the company expects Youga to contribute between 90,000 – 100,000 ounces, with the difference being compensated for by New Liberty, where Avesoro is in discussions with an open-pit mining contractor, chief executive Serhan Umurhan said in a statement.
The Toronto-based company, which has a track record of successfully building low cost mining operations and turning around non-performing assets, has experienced rapid growth to date.
Avesoro’s plan is to become a larger 500,000-ounces gold producer in the next two to three years, and it intends to achieve this goal through mergers or acquisitions.
The company, which also owns the Batouri asset in Cameroon and Balogo in Burkina Faso, is currently progressing a prefeasibility study (PFS) for an underground extension at New Liberty. The report is expected to include the first open-pit reserves from the Ndablama satellite deposit and is set to be concluded in the coming weeks.
