Avocet Mining swings to a loss after 'difficult' year

6th Mar 2014 12:29

Avocet Mining, a West African gold mining and exploration company, issued a disappointing set of full-year results that revealed the group had swung to an annual loss. Hit by a decline in gold production and a fall in the average realise gold price, revenue decreased from £204.11m to £149.26m. This, combined with an increase in cash production costs, pushed the group into the red, with a loss before tax and exceptional items of £45.99m, compared to a profit of £18.27m a year earlier. Gold production fell from 135,189 to 118,443 ounces year-on-year, while total cash costs came to $1,203 an ounce. David Cather, Chief Executive Officer, said: "While 2013 was a difficult year for both the gold price and the company, we have now refocused our efforts at Inata and put in place several key initiatives to underpin the mine's future."As we announced in December, the weaker gold price has led to a change in approach at the mine, and our engineers are in the process of completing a new plan for Inata, with smaller pit shells and higher grades to ensure the mine will deliver strong cash flow over its life."The new plan will feature operation of the carbon blinding circuit from mid-year, enabling Avocet to process higher grade carbonaceous ore as it is mined, rather than stockpiling this material for processing later, as had previously been necessary. The Souma deposit is now being added to the Inata life of mine plan, and the company is in the process of taking the initial steps towards a mining licence application for Souma. The company said it remained confident that there is potential for additional ounces at both Inata and Souma in future.Avocet added: "Corporately, we are conducting a business review of our assets to maximise shareholder value and we will make announcements as further progress is made."NR