StockMarketWire.com - West African gold producer Avesoro Resources said it may undershoot its annual output target if it was unable to make up for lost production falling a disruption due to heavy rainfall. The update comes as the company swung to a loss in the second quarter of the year as lower production and sales of gold dented revenues.

Heavy rainfall in recent days had resulted in flooding of the main pit and ore mining had temporarily ceased at New Liberty, the company said, adding that it anticipated that it would be ten days before ore mining can recommence.

'The mining equipment continues to operate on waste stripping and the impact of the ore production stoppage is currently being assessed and in particular, whether the reduction in ore production can be caught up later in the year to maintain production guidance of 180,000 to 200,000 ounces of gold for 2019,' it added.

For the three months ended 30 June, the company reported a loss of $18.67m, compared with a profit of $378m a year earlier, as revenues fell to $48m from $74.50m.

Gold production fell to 34,338 ounces in the quarter, a decrease of 24% on the previous quarter, which the company blamed on the processing low grade mill feed at Youga and operational stoppages associated with the transition to contractor mining operations at both the New Liberty and Youga gold mines.

But the operational transition to contractor mining during the second quarter of 2019, is expected to deliver an increase in material movement at both New Liberty and Youga throughout the second half of 2019, leading to increased gold production and a reduction in unit operational costs.

The company said it expected unit costs to trend downwards in line with the scheduled increase in the production profile in the second half of the year.


At 9:22am: [LON:ASO] Avesoro Resources Inc. share price was -5p at 60.5p



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