(Alliance News) - Problems at the Youga and New Liberty mines helped push Avesoro Resources PLC to a quarterly loss, it said on Thursday.
Gold production for the three months to September fell 34% on the previous quarter to 22,678 ounces, leading to a 35% fall in revenue to USD31.2 million.
This was despite a 12% rise in the price of gold in the period.
Earnings before interest, tax, depreciation, and amortisation were a negative USD4.7 million, after a USD2.1 million positive result the previous quarter.
Toronto-based Avesoro had already reported the quarterly production figures, in mid-October, after heavy rainfall caused a significant decline in rainfall at New Liberty in Liberia.
Further, heavy mining equipment, trucks, and excavators at Youga in Burkina Faso were damaged in August during a break-in by a group of armed artisanal miners. A security guard was killed in the same incident.
Avesoro said at the time it would be reviewing 2019 production guidance, and this has now been reduced to between 140,000 ounces and 145,000 ounces. Previous guidance was for between 180,000 ounces and 200,000 ounces.
The company has agreed a 100 pence per share takeover bid by controlling shareholder Avesoro Jersey Ltd, which has also provided a loan to keep the company's near-term finances steady.
Avesoro shares were 1.2% lower on Thursday in London at 94.90p each. The stock has nearly halved over the past 12 months, though it has recovered from 31.50p in June.
Avesoro Jersey is owned by Turkish businessman Murathan Gunal, the company's non-executive chair.
"Avesoro's financial performance in the third quarter was affected by the operational issues and lower production levels as announced on October 10 in the third-quarter production update," said Chief Executive Serhan Umurhan.
"The company's majority shareholder, Murathan Gunal, has 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."
"Mining operations continue at both our New Liberty and Youga gold mines with operational performance having improved since the end of the third quarter. However, gold production remains lower than budgeted with provisional group production in October of 5,500 ounces," Umurhan continued.
By George Collard; georgecollard@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.
