Avesoro Resources guidance under review as it struggles to strike gold

Precious metals mining company Avesoro Resources Inc (LON: ASO) has said its full-year guidance remains under review as operational difficulties weigh on gold production volumes.

Following a switch to contactor mining at its Youga and New Liberty contracts, the Company said its production quantities had been adversely affected during the quarter.

Third quarter production at it New Liberty venture dived 57% compared to Q2, down to 8,059 ounces – though its also attributed this dip to ‘heavy rainfall flooding the main pit’. Similarly, its Youga prospect’s output dropped by 6%, to 14,619 ounces. It said a degree of this drop owed to a security issue which ‘hampered mining fleet availability’.

Total gold production of 22,678 ounces during Q3 brings the year-to-date volume to 102,113 ounces. Total material movement of 10.6Mt during Q3 represents a 14% decrease on the previous quarter.

Avesoro Resources comments

Company CEO Serhan Umurhan added the following insights to the update,

“Following the transition to contractor mining at New Liberty and Youga earlier this year, both mines have experienced operational issues that adversely affected our mining rates and gold production performance in the Quarter.”

“However, I am confident that operational performance will improve at both mines during Q4, with the end of the wet season allowing New Liberty to materially enhance productivity in the near term despite the recent pit-wall failure. Meanwhile, an additional 15 trucks, 6 excavators, a rock drill and further auxiliary equipment will be available at Youga later this week at the mining contractors cost, and we expect that this will result in an uplift in production during Q4.”

“Given a number of operational uncertainties our full year production guidance remains under review. The Company intends to provide updated guidance once operational performance has stabilised for a sustained period of time.”

Investor notes

The Company’s shares have dipped by 2.75% or 2.54p to 89.96p per share 10/10/19 14:08 BST. Analysts from finnCap reiterated their ‘Corporate’ stance on Avesoro Resources stock. The Group’s p/e ratio and dividend yield are unavailable, their market cap is £72.60 million.

Elsewhere in the mining and minerals sector, recent updates have come from; Griffin Mining Ltd (LON: GFM), Alien Metals Ltd (LON: UFO), Highland Gold Mining Ltd (LON: HGM), Kavango Resources PLC (LON: KAV), URU Metals Ltd (LON: URU), Resolute Mining Limited (LON: RSG) and Bisichi Mining PLC (LON: BISI).