Hot Features
Premium
Trade smarter, not harder: Unleash your inner pro with our toolkit and live discussions.
Gold exploration and mining company Avocet Mining plc (LSE:AVM) said the second quarter of 2012 was a challenging period for the company, as the company revealed reduced gold production and sharp fall on profit.
In its unaudited results released today, Avocet’s gold production was down 14% from last quarter’s at 32,917 ounces and 16% lower from the same period last year.
A month ago, the company has already revised its guidance on the full year production target, reducing to between 135,000 and 140,000 ounces, a drop from the 160,000 ounces it earlier stated.
The poor availability of equipment was cited by Avocet as the reason for the decrease in production, as mining operations did not access the higher grade areas, causing a fall on head grades to only 1.82 grams per tonne.
The company also stated that average realised gold price for the quarter fell by over US$100 per ounce to US$1,429 / oz., which resulted in a 69% fall in EBITDA, from US$28.1 million during the first quarter to only about US$8.7 million in the second.
No Dividend
This drop made the Board of Avocet to decide to cancel dividends for the 2012 financial year and turning back from the dividend policy it set a year ago, which committed the company to pay US$20 million per annum in dividends.
“In response to this weaker performance the Board has taken the decision to pay no dividend in respect of the 2012 financial year. The Company will look to resume dividends for subsequent years subject to assessment of growth plans and operating performance,” newly appointed Chief Executive David Cather stated.
Mr. Cather further stated the company’s primary focus moving forward is the improvement of Avocet’s flagship and only producing Inata Gold Mine in Burkina Faso.
Consultancy firm Alexander Proudfoot was commissioned by Avocet for a three-week business review to “quantify performance improvement opportunities to enhance efficiencies and reduce costs.”
“I will now be leading the Company’s drive to achieve operational excellence from the position of CEO. In this capacity, my focus will be on ensuring Avocet delivers on its guidance for the remainder of 2012 and 2013,” Mr. Cather firmly closed.
Company Spotlight
Avocet Mining plc is an FTSE 250 gold mining company with a secondary listing on the Oslo Stock Exchange. The company holds 21 exploration licences in Burkina Faso and Guinea in West Africa, with the Inata Gold mine as its first producing project.
Avocet Mining’s share price has dropped over 68% in the last six months, from 239.50 pence in February to 75 pence by the end of July. At 4:00 PM GMT, shares were 10.1% higher to 82.55 pence, in what may be seen as investors’ endorsement of the appointment of the new CEO.
