TORONTO, Jan. 24, 2018 /CNW/ - Avesoro Resources Inc. ("Avesoro" or the "Company"), the TSX and AIM listed West African gold producer, is pleased to announce consolidated annual production guidance for 2018 and to provide an update on initial results from the 2017 exploration activities.
Highlights
- Gold production is expected to be between 220,000 and 240,000 ounces in 2018 representing a 15 to 25% increase on 2017 production from the Company's mines.
- 2018 financial budget extracts:
- Operating cash cost (per ounce produced)1: US$620 to US$660;
- All-in sustaining cost (per ounce sold)1: US$960 to US$1,000;
- Sustaining capital expenditure: US$65 million to US$75 million, including US$35 million of waste stripping;
- Repayment of US$26 million of project finance loans; and
- Exploration allocated US$25 million with eight diamond drill rigs currently active across licence portfolio, increasing to 24 drill rigs for 171,000m 2018 drill programme.
- Significant additional ounces delineated by drilling along strike from current mining operations at the Youga Gold Mine.
Serhan Umurhan, Chief Executive Officer of Avesoro, commented:
"We begin 2018 well positioned to continue to increase gold production levels and to further reduce operating costs at our New Liberty, Youga and Balogo Gold Mines. This year, we look to build upon the operational turnaround achieved at New Liberty and to deliver further growth throughout 2018, with forecast gold production of 220,000 to 240,000 ounces at an operating cash cost of US$620 to US$660 per ounce of gold produced.
I am very encouraged by the exciting exploration results we encountered during our 2017 exploration campaign in Burkina Faso, in particular at Youga, where we have identified significant additional ounces at Gassore along strike from existing pits, and in close proximity to the processing plant. These additional ounces now fall within our mining plan, thereby providing us with the confidence to increase our 2018 gold production guidance at Youga above that forecast in the 2017 published life of mine plan.
Investment in exploration is a key focus of our 2018 growth strategy following the success of last years focused exploration activities, and I am pleased to announce an exploration budget for 2018 of US$25 million that will see 24 diamond drill rigs operating across the Company's licence portfolio by Q3 2018.
I look forward to updating the market on the progress of our comprehensive 2018 drilling campaign and to announcing an updated Mineral Resource statement later this year, which already stands at a healthy 2.3 Moz grading 2.2g/t Au".
2018 Operational Outlook
New Liberty Gold Mine, Liberia ("New Liberty")
- Gold production is expected to increase by 45 to 58% to between 110,000 and 120,000 ounces in 2018 compared to 76,179 ounces in 2017;
- Operating cash costs are expected to decrease to between US$630 and US$670 per ounce produced;
- AISC is expected to decrease to between US$1,020 and US$1,060 per ounce produced; and
- US$45 million to US$50 million of sustaining capital expenditure is planned for 2018 including US$33 million of waste stripping.
Youga and Balogo Gold Mines, Burkina Faso ("Youga" and "Balogo")
- Gold production is expected to be between 110,000 and 120,000 ounces in 2018 compared to 115,894 ounces in 2017;
- Operating cash costs per ounce produced are expected to be between US$540 to US$580;
- AISC is expected to be between US$805 to US$845 per ounce produced; and
- US$20 million to US$25 million of sustaining capital expenditure is planned for 2018.
Exploration
- Board approved exploration budget of US$25 million for 2018 with eight diamond drill rigs currently mobilised across the licence portfolio;
- The Company expects to complete 171,000 metres of diamond drilling during 2018;
- The Company's drilling contractor has placed an order for an additional 16 new diamond drill rigs, of which four are currently enroute to Burkina Faso and expected to be operational by late February 2018;
- The remaining 12 drill rigs will be mobilized during Q2 and Q3 2018 with six rigs being allocated to Liberia and six rigs to Burkina Faso; and
- The drilling contractor, which is a related party to the Company, is able to provide a very attractive drilling rate of between US$40 and US$85 per metre for HQ Diamond drilling.
Update on 2017 Exploration Activities
Liberia
Throughout 2017, the Company's exploration team undertook a comprehensive review of all previously identified exploration targets and conducted additional geological and geochemical work around previously identified gold in soil anomalies.
In Q4 2017, the Company commenced a 14,000 metre on-mine infill drilling programme, with the aim of increasing the confidence in the continuity of the New Liberty ore body and to upgrade the classification of a proportion of Inferred Mineral Resource in the NI 43-101 compliant Technical Report dated November 1, 2017 to an Indicated Mineral Resource. To date, 29 holes for 12,000 metres have been completed, with assay results currently pending.
Burkina Faso
Throughout H2 2017, the Company conducted drilling campaigns on several targets across the Youga and Balogo licences.
At Youga, a 52,000 metre near-mine diamond drilling campaign was completed in 2017 with particular focus on the Gassore prospect which is located along strike from the existing mine operations. To date, drilling has intersected mineralization over a strike length of 650 metres along a 2.6 km mineralized trend, testing to a vertical depth of 100 metres, with the average width of the mineralization intersected being 1.34 metres (drilled width) at an average grade of 8.40 g/t Au.
Key intercepts from the near-mine drilling programme are reported below:
|
Target |
Hole ID |
From (m) |
To (m) |
Width* (m) |
Au g/t |
Comment |
|
Gassore |
GASS-17-072 |
110.00 |
110.75 |
0.75 |
231.00 |
|
|
Gassore |
GASS-17-001 |
38.90 |
45.30 |
6.40 |
19.54 |
including 4.60 m @ 26.46 g/t & 1.00 m @ 59.50 g/t |
|
Gassore |
GASS-17-067 |
95.75 |
100.50 |
4.75 |
14.74 |
including 1.75m @ 26.88 g/t |
|
Gassore |
GASS-17-070 |
53.20 |
56.85 |
3.65 |
15.02 |
including 0.90 m @ 50.40 g/t |
|
Gassore |
GASS-17-179 |
63.15 |
65.25 |
2.10 |
19.45 |
including 0.90 m @ 38.70 g/t |
|
Gassore |
GASS-17-036 |
21.90 |
25.50 |
3.60 |
9.74 |
including 1.50 m @ 20.40 g/t |
|
Gassore |
GASS-17-082 |
84.45 |
85.35 |
0.90 |
28.60 |
|
|
Gassore |
GASS-17-013 |
21.85 |
25.95 |
4.10 |
5.40 |
|
|
Gassore |
GASS-17-126 |
70.30 |
73.15 |
2.85 |
7.44 |
including 0.90 m @ 21.7 g/t |
|
Gassore |
GASS-17-106 |
9.00 |
11.40 |
2.40 |
8.54 |
including 1.60 m @ 9.64 g/t |
|
Gassore |
GASS-17-106 |
46.50 |
47.90 |
1.40 |
13.65 |
|
|
Gassore |
GASS-17-103 |
118.55 |
123.25 |
4.7 |
4.05 |
including 0.95 m @ 11.75 g/t |
|
Gassore |
GASS-17-003 |
27.95 |
31 |
3.05 |
6.20 |
|
|
Gassore |
GASS-17-107 |
102.00 |
104.6 |
2.60 |
7.05 |
including 1.00 m @ 16.15 g/t |
|
Gassore |
GASS-17-139 |
90.00 |
91.00 |
1.00 |
14.35 |
|
|
Mid Pit |
YNE-17-116 |
112.00 |
115.65 |
3.65 |
35.45 |
including 0.90 m @ 138.00 g/t |
|
Mid Pit |
YNE-17-112 |
100.45 |
104.85 |
4.40 |
15.32 |
including 0.85 m @ 51.80 g/t |
|
Mid Pit |
YNE-17-114 |
107.80 |
114.00 |
6.20 |
8.55 |
including 1.20 m @ 39.70 g/t |
* Drilled widths; it is estimated that true width will be approximately 92% of the reported drill intercept width.
A full set of drill results will be made available on our website at www.Avesoro.com
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.
Notes:
1 Non-GAAP Financial Measures: The Company has included certain non-GAAP financial measures in this press release, including operating cash costs and all-in sustaining costs ("AISC") per ounce of gold produced. These non-GAAP financial measures do not have any standardised meaning. Accordingly, these financial measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with International Financial Reporting Standards ("IFRS").
Operating cash costs and all-in-sustaining cash costs are a common financial performance measure in the mining industry but have no standard definition under IFRS. Operating cash costs are reflective of the cost of production and include a net-smelter royalty.
AISC include operating cash costs, corporate costs, sustaining capital expenditure, sustaining exploration expenditure and capitalised stripping costs.
About Avesoro Resources Inc.
Avesoro Resources is a West Africa focused gold producer and development company that operates three gold mines across West Africa and is listed on the Toronto Stock Exchange ("TSX") and the AIM market operated by the London Stock Exchange ("AIM"). The Company's assets include the New Liberty Gold Mine in Liberia (the "New Liberty Gold Mine" or "New Liberty") and the Youga and Balogo Gold mines in Burkina Faso ("Youga" and "Balogo").
New Liberty has an estimated proven and probable mineral reserve of 7.4Mt with 717,000 ounces of gold grading 3.03g/t and an estimated measured and indicated mineral resource of 9.6Mt with 985,000 ounces of gold grading 3.2g/t and an estimated inferred mineral resource of 6.4Mt with 620,000 ounces of gold grading 3.0g/t. The foregoing Mineral Reserve and Mineral Resource estimates and additional information in connection therewith is set out in an NI 43-101 compliant Technical Report dated November 1, 2017 and entitled "New Liberty Gold Mine, Bea Mountain Mining Licence Southern Block, Liberia, West Africa" and is available on SEDAR at www.sedar.com.
Youga and Balogo have a combined estimated proven and probable mineral reserve of 9.3Mt with 513,000 ounces of gold grading 1.7g/t and a combined estimated indicated mineral resource of 16.05Mt with 801,600 ounces of gold grading 1.55g/t and a combined inferred mineral resource of 13Mt with 655,000 ounces of gold grading 1.57g/t. The foregoing Mineral Reserve and Mineral Resource estimates and additional information in connection therewith is set out in two NI 43-101 compliant Technical Reports, dated June 16, 2017 entitled "Mineral Resource and Mineral Reserve Update for the Balogo Project" and dated June 19, 2017 and entitled "Mineral Resource and Mineral Reserve Update for the Youga and Ouaré Projects" and are available on SEDAR at www.sedar.com.
For more information, please visit www.avesoro.com
Qualified Persons
The Company's Qualified Person is Mark J. Pryor, who holds a BSc (Hons) in Geology & Mineralogy from Aberdeen University, United Kingdom and is a Fellow of the Geological Society of London, a Fellow of the Society of Economic Geologists and a registered Professional Natural Scientist (Pr.Sci.Nat) of the South African Council for Natural Scientific Professions. Mark Pryor is an independent technical consultant with over 25 years of global experience in exploration, mining and mine development and is a "Qualified Person" as defined in National Instrument 43 -101 "Standards of Disclosure for Mineral Projects" of the Canadian Securities Administrators and has reviewed and approved the scientific and technical disclosures contained in this announcement.
