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MINING | Avesoro Resources
Completing a turnaround in Liberia and expanding into Burkina Faso
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AVESORO RESOURCES
MINING | Avesoro Resources
On May 10th, West Africafocused gold miner Avesoro Resources published a glowing financial update, with gold production and sales more than trebling in the first quarter of 2018, which helped quarterly revenue rise to US$91.4 million. This incredible figure represents more than 90% of the full year 2017 revenue of $98 million reported by the company in March, after it was able to complete a successful turnaround at the New Liberty Gold Mine in Liberia. Avesoro’s annual performance was also bolstered by the acquisition of two producing gold mines in Burkina Faso, which combined with the revival of New Liberty to create a positive spiral in the company’s fortunes, propelling it towards mid-tier status.
industry, after achieving first marketable
“We are delighted with the continued strong
introducing a number of initiatives to boost
operational performance delivered in the
operations at the mine.
production as recently as March 2016. However, dark clouds were quick to form around Liberia’s inaugural large-scale gold mine. Just two months after reaching full production, Avesoro (then operating under the name Aureus Mining) was forced to suspend operations at New Liberty amid commissioning delays and a tailings leak, which was exacerbated by a deteriorating financial position and retreating gold prices.
A timely intervention It was at this point that Turkish gold miner MNG Gold swooped in to arrest the company’s decline, signing a deal to become the majority shareholder of Aureus and providing a cash injection totalling $150 million to rescue the New Liberty mine, before renaming the company Avesoro. After refreshing the boardroom with several appointments from MNG’s team, Avesoro commenced a new strategy for New Liberty,
first quarter,” says Avesoro’s CEO and director Serhan Umurhan.
“Primary amongst these was the decision to transition to an owner-operator mining
“All of our mines performed in line with
model, which significantly reduced the
expectations, leaving us on track to meet
ongoing costs of mining operations. We also
2018 production guidance. We go forward in
purchased additional fleet to allow for an
2018 from a position of strength.”
increased mining rate and to catch up on the stripping shortfall the company inherited.”
New Liberty is the first and largest commercial gold mine in Liberia’s fledgling
Furthermore, Avesoro has improved
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MINING | Avesoro Resources
All of our mines performed in line with expectations, leaving us on track to meet 2018 production guidance. We go forward in 2018 from a position of strength.” Serhan Umurhan, CEO and director equipment availability, recruited additional
However, fast forward to Avesoro’s Q1 2018
high-quality staff for both the mining
production report and irrefutable evidence
operation and process plant, undertaken
emerges of the turnaround at New Liberty.
a proactive maintenance schedule and optimised the process plant allowing for
The mine produced a record quarterly gold
an increased throughput from 90ktpm to
output of 27,870 ounces (oz), a 9% increase
140ktpm.
on the production sum achieved in the previous three-month period at the end of
Factor in improved tailings and surface water 2017. management and the result is a stable and profitable mine, which was not much more
Addressing the size of the task the company
than a far-fetched dream back in mid-2016.
had on its hands, Umurhan says: “It has
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undoubtedly been challenging, but we knew
The next challenge for Avesoro at New
there was a quality asset here and that we
Liberty is to continue delivering high
had the capabilities within the team to bring
standards in line with the company’s renewed
it into stable production.
mine plan and production targets. However, the miner has also devised plans to extend
“As the most recent record production results the LOM at New Liberty. have shown, we have succeeded in achieving that. I would like to thank all our staff who
“We have a lot of inferred gold ounces below
have shown great determination in bringing
the pit shell that are not currently included
about this result.”
within the mine plan and have just completed a 52-hole drill programme with the aim of
MINING | Avesoro Resources
increasing the confidence level in these
from the Youga and Balogo gold mines in
ounces, with extremely encouraging results
Burkina Faso during the first quarter of the
to date confirming the resource model.”
year, with the combined production figure of both mines increasing by 39% on the last
The results of this drilling programme will be
quarter to 40,218 oz.
combined with near mine exploration that is currently underway. “2018 is an exciting
This is an impressive result considering
year for exploration across the whole group,”
Avesoro purchased the mines only
reveals Umurhan.
last year in what the company called a
Welcome to Burkina Faso Avesoro also delivered strong output growth
‘transformational’ move, in the sense that it gives them the chance to grow their portfolio and expand their geographic reach in the West Africa region.
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In particular, Avesoro was able to apply its
“To date, the average mined grade from
skills at the Youga mine to deliver the highest
Balogo has been approximately 18 grams per
quarterly production from the process plant
tonne (g/t) and during the quarter this has
in a decade and has already extended the
fed through to the process plant, with the
mine life and devised a more cost-effective
feed grade for the quarter increasing by 37%
mining process.
to 4.5 g/t.�
The Balogo mine is also held in high regard
Youga and Balogo are proven gold-producing
by the company despite its previous owner
assets that complement the New Liberty
struggling to raise the necessary finance
mine and provide an instant boost to
that would reflect its true potential. Avesoro
Avesoro’s production portfolio, in addition to
began mining the high-grade asset in March
adding high quality exploration upside that
2017.
MINING | Avesoro Resources
will provide further organic growth in the
“We will continue to focus on delivering
future.
on our production guidance through 2018 whilst also assessing various other M&A
Taking into account the additional output
opportunities.
from the Youga and Balogo mines, Avesoro’s total Q1 production figure came to 68,088 oz,
“We have a very strong platform to grow from
which represents an all-time high return and
both organically and by acquisition.”
keeps the company on track to meet its 2018 guidance of between 220,000 oz to 240,000
A golden horizon
oz.
Umurhan also has a reasonable right to believe that external market conditions
“Our primary ambition is to become a
will further sweeten the fruits of success
premier mid-tier gold producer and that
born out of Avesoro’s increased operational
ultimately means we have to reach 500,000
productivity.
oz [annual production rate] and the acquisition of Youga and Balogo has been a
Gold is widely considered a ‘safe haven’
significant first step in reaching that target,”
commodity and will continue to be perceived
Umurhan proclaims.
in this way by investors long into the future.
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Interest in gold as a portfolio buffer also
After completing a turnaround at New Liberty
peaks during times of geopolitical tension or
and bolstering its production portfolio with
upheaval and this is when gold spot prices
the two Burkina Faso acquisitions, Avesoro is
tend to rise, which is only good news for
well on the way to a golden horizon.
international gold mining companies, and Avesoro’s CEO and director expects gold
In the short term, the company is confident
to rise in the face of escalating tensions
it can soon reach a 300,000 oz annual
between the world’s two largest economies.
production target through organic growth and exploration across its three mines, but in
“President Trump’s foreign policy and the
the long term it will look to achieve a 500,000
current brewing trade war with China have
oz annual guidance through M&A activity and
increased political instability and uncertainty
is currently assessing various opportunities
in these regions and we are seeing investors
throughout the continent.
turn to gold as a traditional haven.”
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Published by Anderson Murray Media Ltd
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