(Alliance News) - Serabi Gold PLC on Thursday suspended its guidance for 2020, saying that coronavirus has the potential to hurt its operations.
The stock was trading 24% lower in London on Thursday at 54.55 pence a share.
The gold exploration and production company said it has experienced a mechanical failure of one of the three ball mills in February, which resulted in a lower than anticipated level of gold production for that month.
Repairs have been completed and the plant is currently again running at capacity, Serabi highlighted.
Commissioning of the ore sorter has been completed, which the company had expected to result in recovery in the shortfall in production from the first quarter over the remaining three quarters of 2020. However, the potential restrictions that may arise from the coronavirus now make that unlikely, Serabi said.
Gold production for the first three months of 2020 is expected to be between 8,500 and 9,000 ounces. In the final quarter of 2019, the company reported gold output of 10,223 ounces.
The company is projecting to have cash holdings of USD8.5 million at the end of March after payment of the next installment of the loan repayment to Sprott.
Looking ahead, Serabi said it is suspending its 2020 production guidance, amid the current uncertainties, until it is in a better position to quantify the impact.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Serabi (SRB)