Avesoro sticks to 2019 guidance, despite gold output drop

The acquisition of New Liberty mine, in 2016, brought about a massive change to the scale of Avesoro – adding much needed gold ounces to its production. (Image courtesy of Avesoro Resources)

West Africa-focused miner Avesoro Resources (TSX, LON: ASO) reported Wednesday a 24% fall in output for the second quarter of the year when compared to Q1, but said it was confident of a turnaround after improvements are made at its mines.

The company’s gold production fell to 34,338 ounces in the three months to June 30 from 45,098 ounces in the previous quarter, equivalent to a 43% drop from Q2 2018.

Avesoro said it was on track to produce between 180,000 to 200,000 ounces of gold this year

The Canadian gold producer completed operational aspects of the transition to contractor open pit mining at both the Youga and New Liberty mines.

The upgrades, it said, position the company to achieve a revised production guidance of 180,000 to 200,000 of gold for 2019. The estimate had been previously cut from 210,000 to 230,000 ounces due to work issues at Youga.

“With the operational aspects of the transition to contractor mining at both Youga and New Liberty now in place, I am confident that the challenges experienced during the second quarter have been overcome and that total material movement and gold production will increase in the second half of the year,” chief executive Serhan Umurhan said in a statement.

Gold production at Burkina Faso’s Youga mine, which Avesoro acquired in 2016, declined 19% when compared to the first quarter of the year to 15,516 ounces.

At New Liberty mine, in Liberia, second-quarter gold production was temporarily adversely impacted on by the transition to contractor mining in April, with output dropping by 27% to 18,822 ounces.

Avesoro, which has a track record of not only successfully building low cost mining operations, but also turning around non-performing assets, has experienced rapid growth to date.

The company’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 a combination of organic and inorganic growth — mergers or acquisitions.

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