Cash costs to increase at Avocet

5th May 2011 15:50

Gold miner Avocet Mining lost some of its lustre after it warned of mounting cash costs for the rest of this year.Total gold production in the first three months of 2011 crept up to 71,708 ounces from 70,857 ounces in the final quarter of 2010.Production costs rose to $678 per ounce from $641 per ounce in the preceding quarter.Earnings before interest, tax, depreciation and amortisation from continuing operations rose to $25.40m from $22.43m in the fourth quarter of 2010. Profit before tax from continuing operations rose to $12.57m from $7.99m in the final quarter of 2010."The results from our exploration activities in West Africa have been most encouraging, and are confirming the upside potential for our projects in both Burkina Faso and Guinea. The Inata mine continues to make process efficiency improvements. However, we expect cash costs to increase during the remainder of 2011 as a result of increased mining costs and lower head grades," said Brett Richards, Avocet's chief executive officer. "Work is progressing well towards completion of our plant enhancements, and commissioning of these upgrades is targeted for Q3 2011, without disrupting operations. At the same time, we remain committed to completing the sale of our South East Asian assets as early as possible," Richards said.---jh