New Age Metals

Avesoro Resources Financial Results and Operational Update

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019

TORONTO, Nov. 14, 2019 /CNW/ - Avesoro Resources Inc. ("Avesoro" or the "Company"), the TSX and AIM listed West African gold producer announces the release of its unaudited Financial Statements ("FS") and Management's Discussion and Analysis ("MD&A") for the quarter (the "Quarter" or "Q3") and nine months ("YTD") ended September 30, 2019.

Serhan Umurhan, Chief Executive Officer of Avesoro, commented: "Avesoro's financial performance in Q3 was affected by the operational issues and lower production levels as announced on October 10, 2019 in the Q3 Production Update. The Company's majority shareholder, Mr Murathan Gunal, has reconfirmed his commitment to continue to provide such financial support as the Company requires for its continued operation as the effects of the transition to contractor mining and other cost saving initiatives settle down.

Mining operations continue at both our New Liberty and Youga gold mines with operational performance having improved since the end of Q3. However, gold production remains lower than budgeted with provisional Group production in October of 5.5koz.

My revised expectations of full year gold production for the Group is between 140,000 – 145,000 oz split 70koz at New Liberty and 75koz Youga."

Financial & Operational Highlights:

YTD 2019

  • Gold production of 102,114 ounces from the New Liberty Gold Mine in Liberia ("New Liberty") and Youga Gold Mine in Burkina Faso ("Youga");
  • Company revenues of US$139.1 million from gold sales of 103,523 ounces at an average realised gold price of US$1,340 per ounce;
  • Consolidated operating cash costs1 of US$1,069 per ounce sold in 9 months to September;
  • Consolidated all in sustaining costs1 ("AISC") of US$1,431 per ounce in 9 months to September;
  • Company EBITDA margin of 5% with EBITDA1 of US$7.0 million;
  • Net operating cash flows of US$15.8 million; and
  • Cash of US$6.3 million and gross debt of US$144.8 million at September 30, 2019.

Q3 2019

  • Gold production of 22,678 ounces in the Quarter, a decrease of 34% on the previous quarter, as a result of production interruptions at both the New Liberty and Youga gold mines;
  • Company revenues of US$31.2 million from gold sales of 21,246 ounces at an average realised gold price of US$1,464 per ounce;
  • Consolidated operating cash costs1 of US$1,315 per ounce sold in Q3;
  • Consolidated AISC1 of US$1,971 per ounce sold in Q3;
  • Company EBITDA margin of -15%, with EBITDA1 of -US$4.7 million in the Quarter; and
  • Net operating cash flows of US$5.7 million in the Quarter.

 Notes:

1

See "Non-GAAP Financial Measures";

Table 1: Consolidated Financial Highlights

 Metric

Q3 2019

Q2 2019

Q3 2019
vs Q2
2019

YTD 2019

YTD 2018

YTD 2019
vs YTD
2018

Group

           

Gold production, oz

22,678

34,338

-34%

102,114

175,496

-42%

Gold sold, oz

21,246

36,467

-42%

103,523

174,812

-41%

Operating cash costs* US$/oz sold

1,315

1,125

17%

1,069

719

49%

All in sustaining costs US$/oz sold

1,971

1,469

34%

1,431

995

44%

Average realised gold price, US$/oz

1,464

1,313

12%

1,340

1,288

4%

Revenues, US$m

31.2

48.0

-35%

139.1

225.1

-38%

EBITDA, US$m

(4.7)

2.1

-321%

7.0

72.8

-90%

EBITDA margin

-15%

4%

-444%

5%

32%

-84%

Cash flow from/ (used in) operations, US$m

5.7

5.0

14%

15.8

62.4

-75%

Capital expenditure, US$m

7.9

5.6

41%

21.4

34.9

-39%

Cash, US$m

6.3

4.4

43%

6.3

8.6

-27%

Gross Debt, US$m

144.8

138.3

5%

144.8

128.8

12%

Table 2: Key Operations Financial Highlights

Metric

Q3 2019

Q2 2019

Q3 2019
vs Q2
2019

YTD 2019

YTD 2018

YTD 2019
vs YTD
2018

New Liberty

           

Gold production, oz

8,059

18,822

-57%

52,736

85,134

-38%

Gold sold, oz

7,235

19,637

-63%

53,195

84,658

-37%

Mining cost, US$/t

1.74

1.84

-5%

1.82

2.47

-26%

Processing cost, US$/t

39.76

20.27

96%

24.82

24.11

3%

Operating cash costs* US$/oz sold

1,284

1,116

15%

998

825

21%

All in sustaining costs US$/oz sold

2,677

1,577

70%

1,456

1,082

35%

Average realised gold price, US$/oz

1,447

1,321

10%

1,329

1,281

4%

             

Youga

           

Gold production, oz

14,619

15,516

-6%

49,378

90,362

-45%

Gold sold, oz

14,011

16,830

-17%

50,328

90,154

-44%

Mining cost, US$/t

1.79

1.64

9%

1.76

1.99

-12%

Processing cost, US$/t

17.61

16.45

7%

17.62

19.63

-10%

Operating cash costs* US$/oz sold

1,335

1,149

16%

1,149

630

82%

All in sustaining costs US$/oz sold

1,475

1,234

20%

1,271

848

50%

Average realised gold price, US$/oz

1,473

1,304

13%

1,352

1,295

4%

Outlook

At Youga, additional mining and auxiliary equipment brought by the mining contractor arrived in October and is expected to improve mining productivity during Q4 2019. However, gold production and unit cost performance will continue to be impacted by low grade ore from the Zergore pit.

In October 2019, New Liberty experienced a pit wall and ramp failure on the north side of the Kinjor-east pit.  Mining operations continue at the Marvoe and Kinjor-south pits, but ore production will be reduced, and unit cost underperformance is expected in Q4 2019 as a result.

Higher waste stripping is expected in the short-term as access to the Kinjor pit remains restricted and to complete the final open pit pushback. The Company continues to work on the New Liberty underground Definitive Feasibility Study and the start of underground development remains targeted for H1 2020.

Take-over Bid

On October 17, 2019 the Company's major shareholder Avesoro Jersey Limited ("AJL") formally commenced an insider bid to acquire all of the issued and outstanding shares of the Company, other than shares owned by AJL, at a price of £1.00 per share. A take-over circular containing additional information about the Offer is available at www.sedar.com.

On October 21, 2019 the board of directors of the Company filed a directors' circular that recommends the minority shareholders accept the Offer and deposit their common shares in the Company to the Offer. A copy of the directors' circular is available at www.sedar.com and on the Company's website. 

Financial Statements and MD&A

The financial statements are appended to this announcement. The financial statements and the accompanying MD&A are available to review at the Company's website, www.avesoro.com and on www.sedar.com.

Non-GAAP Financial Measures

The Company has included certain non-GAAP financial measures in this press release, including operating cash costs, all-in sustaining costs ("AISC") per ounce of gold sold and EBITDA. 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 AISC 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.

AISC include operating cash costs, net-smelter royalty, corporate costs, sustaining capital expenditure, sustaining exploration expenditure and capitalised stripping costs. The Company reports cash costs on an ounce of gold sold basis.

The Company calculates EBITDA as net profit or loss for the period excluding finance costs, income tax expense and depreciation. EBITDA does not have a standardised meaning prescribed by IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.  EBITDA excludes the impact of cash costs of financing activities and taxes and the effects of changes in working capital balances and therefore is not necessarily indicative of operating profit or cash flow from operations as determined under IFRS.  Other companies may calculate EBITDA differently.

Other companies may calculate these measures differently and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

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.

About Avesoro Resources Inc.

Avesoro Resources is a West Africa focused gold producer and development company that operates two 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 ("New Liberty") and the Youga Gold Mine in Burkina Faso ("Youga").

New Liberty has an estimated Proven and Probable Mineral Reserve of 17Mt with 1,365,000 ounces of gold grading 2.49g/t and an estimated Measured and Indicated Mineral Resource of 20.47Mt with 1,748,200 ounces of gold grading 2.66g/t and an estimated Inferred Mineral Resource of 3.0Mt with 271,000 ounces of gold grading 2.8g/t. A supporting Technical Report summarising the PFS, prepared in accordance with CIM guidelines, is set out in an NI 43-101 compliant Technical Report dated January 31, 2019 and entitled "NI 43-101 Pre-Feasibility Report, Mineral Resource and Mineral Reserve Update for the New Liberty Gold Mine, Liberia" and is available on SEDAR at www.sedar.com

Youga has an estimated Proven and Probable Mineral Reserve of 14.7Mt with 814,900 ounces of gold grading 1.72g/t and a combined estimated Measured and Indicated Mineral Resource of 22.16Mt with 1,189,100 ounces of gold grading 1.67g/t and an Inferred Mineral Resource of 7.6Mt with 377,000 ounces of gold grading 1.5g/t. A Technical Report dated 20 June 2019 prepared in accordance with the requirements of National Instrument 43-101 and entitled " NI 43-101 Technical Report Mineral Resource and Mineral Reserve Update for the Youga Gold Mine, Burkina Faso" is available on SEDAR at www.sedar.com and on the Company's corporate website www.avesoro.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 this press release. Mr. Pryor has verified the underlying technical data disclosed in this press release.

Forward Looking Statements

Certain information contained in this press release constitutes forward looking information or forward-looking statements within the meaning of applicable securities laws. This information or statements may relate to future events, facts, or circumstances or the Company's future financial or operating performance or other future events or circumstances. All information other than historical fact is forward looking information and involves known and unknown risks, uncertainties and other factors which may cause the actual results or performance to be materially different from any future results, performance, events or circumstances expressed or implied by such forward-looking statements or information. Such statements can be identified by the use of words such as "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "would", "project", "should", "believe", "target", "predict" and "potential". No assurance can be given that this information will prove to be correct and such forward looking information included in this press release should not be unduly relied upon. Forward looking information and statements speak only as of the date of this press release.

Forward looking statements or information in this press release include the Company meeting its annual production guidance for 2019 of 140,000 – 145,000 ounces of gold, statements regarding the Company's expectation that mining productivity will improve at Youga during Q4 2019 and statements regarding underground development at the New Liberty Gold Mine expected to commence in H1 2020.

In making the forward looking information or statements contained in this press release, assumptions have been made regarding, among other things: general business, economic and mining industry conditions; interest rates and foreign exchange rates; the continuing accuracy of Mineral Resource and Reserve estimates; geological and metallurgical conditions (including with respect to the size, grade and recoverability of Mineral Resources and Reserves) and cost estimates on which the Mineral Resource and Reserve estimates are based; the supply and demand for commodities and precious and base metals and the level and volatility of the prices of gold; market competition; the ability of the Company to raise sufficient funds from capital markets and/or debt to meet its future obligations and planned activities and that unforeseen events do not impact the ability of the Company to use existing funds to fund future plans and projects as currently contemplated; the stability and predictability of the political environments and legal and regulatory frameworks including with respect to, among other things, the ability of the Company to obtain, maintain, renew and/or extend required permits, licences, authorizations and/or approvals from the appropriate regulatory authorities; that contractual counterparties perform as agreed; and the ability of the Company to continue to obtain and retain qualified staff (including employees and contractors) and equipment in a timely and cost-efficient manner to meet its demand.

Actual results could differ materially from those anticipated in the forward-looking information or statements contained in this press release as a result of risks and uncertainties (both foreseen and unforeseen) and should not be read as guarantees of future performance or results and will not necessarily be accurate indicators of whether or not such results will be achieved. These risks and uncertainties include the risks normally incidental to exploration and development of mineral projects and the conduct of mining operations (including exploration failure, cost overruns or increases, and operational difficulties resulting from plant or equipment failure, among others); the inability of the Company to obtain required financing when needed and/or on acceptable terms or at all; risks related to operating in West Africa, including potentially more limited infrastructure and/or less developed legal and regulatory regimes; health risks associated with the mining workforce in West Africa; risks related to the Company's title to its mineral properties; the risk of adverse changes in commodity prices; the risk that the Company's exploration for and development of mineral deposits may not be successful; the inability of the Company to obtain, maintain, renew and/or extend required licences, permits, authorizations and/or approvals from the appropriate regulatory authorities and other risks relating to the legal and regulatory frameworks in jurisdictions where the Company operates, including adverse or arbitrary changes in applicable laws or regulations or in their enforcement; competitive conditions in the mineral exploration and mining industry; risks related to obtaining insurance or adequate levels of insurance for the Company's operations; that Mineral Resource and Reserve estimates are only estimates and actual metal produced may be less than estimated in a Mineral Resource or Reserve estimate; the risk that the Company will be unable to delineate additional Mineral Resources; risks related to environmental regulations and cost of compliance, as well as costs associated with possible breaches of such regulations; uncertainties in the interpretation of results from drilling; risks related to the tax residency of the Company; the possibility that future exploration, development or mining results will not be consistent with expectations; the risk of delays in construction resulting from, among others, the failure to obtain materials in a timely manner or on a delayed schedule; inflation pressures which may increase the cost of production or of consumables beyond what is estimated in studies and forecasts; changes in exchange and interest rates; risks related to the activities of artisanal miners, whose activities could delay or hinder exploration or mining operations; the risk that third parties to contracts may not perform as contracted or may breach their agreements; the risk that plant, equipment or labour may not be available at a reasonable cost or at all, or cease to be available or resign, or in the case of labour, may undertake strike or other labour actions; the inability to attract and retain key management and personnel; and the risk of political uncertainty, terrorism, civil strife, or war in the jurisdictions in which the Company operates, or in neighbouring jurisdictions which could impact on the Company's exploration, development and operating activities.

Although the forward-looking statements contained in this press release are based upon what management believes are reasonable assumptions, the Company cannot provide assurance that actual results or performance will be consistent with these forward-looking statements. The forward-looking information and statements included in this press release are expressly qualified by this cautionary statement and are made only as of the date of this press release. The Company does not undertake any obligation to publicly update or revise any forward-looking information except as required by applicable securities laws.

Condensed Interim Consolidated Financial Statements (Unaudited)

Avesoro Resources Inc.

For the Three and Nine Months Ended September 30, 2019 and 2018
(stated in thousands of US dollars)

Registered office:

199 Bay Street

 

Suite 5300

 

Commerce West Street

 

Toronto

 

Ontario, M5L 1B9

 

Canada

   

Company registration number:

 776831-1 

   

Company incorporated on:   

1 February 2011

Avesoro Resources Inc.
Interim Consolidated Statements of Income and Comprehensive Income
(stated in thousands of US dollars)
Unaudited

 

Three months
ended

September 30,
2019

Three months
ended

September 30,

 2018

Nine months
ended

September 30,

 2019

Nine months
ended

September 30,

2018

                $'000

                $'000

                $'000

                $'000

         

Revenues (Note 2)

31,240

59,247

139,124

225,147

         

Cost of sales

       

- Production costs (Note 2)

(29,588)

(45,646)

(117,001)

(137,827)

- Depreciation (Note 2)

(8,667)

(21,930)

(43,885)

(58,931)

Gross (loss)/profit

(7,015)

(8,329)

(21,762)

28,389

         

Expenses

       

Administrative and other expenses (Note 3)

(1,918)

(2,988)

(6,989)

(6,999)

Exploration and evaluation costs (Note 8)

(881)

(2,494)

(4,895)

(9,018)

Write-off of mining equipment (Note 9)

(3,885)

-

(3,885)

-

Loss on lease termination

-

-

-

(566)

(Loss)/Profit from operations

(13,699)

(13,811)

(37,531)

11,806

         

Finance costs

(3,251)

(3,177)

(10,347)

(10,350)

Finance income

49

6

218

181

Foreign exchange gain/(loss)

268

644

934

(1,267)

Gain on modification of loans (Note 10)

275

-

275

-

Other income

69

-

69

-

Derivative liability gain

-

-

-

105

         

(Loss)/Profit before tax

(16,289)

(16,338)

(46,382)

475

         

Tax credit/(charge) for the period (Note 4)

(46)

219

(590)

(9,636)

         

Net loss after tax

(16,335)

(16,119)

(46,972)

(9,161)

Attributable to:

       

- Owners of the Company

(16,614)

(15,807)

(47,064)

(11,960)

- Non-controlling interest (Note 13)

279

(312)

92

2,799

         

Other comprehensive income

Items that may be reclassified subsequently to profit or loss:

       

Fair value gains on investments

-

-

-

22

Currency translation differences

28

(36)

90

(76)

         

Total comprehensive loss

(16,307)

(16,155)

(46,882)

(9,215)

Attributable to:

       

- Owners of the Company

(16,586)

(15,843)

(46,974)

(12,014)

- Non-controlling interest

279

(312)

92

2,799

         

Basic loss per share, (US$) (Note 5)

(0.204)

(0.194)

(0.577)

(0.147)

The accompanying notes are an integral part of these condensed interim consolidated financial statements.    

Avesoro Resources Inc.
Interim Consolidated Statements of Financial Position
(stated in thousands of US dollars)
Unaudited

 

September 30,

2019

$'000

December 31,

2018

$'000

Assets

   

Current assets

   

Cash and cash equivalents

6,321

3,522

Trade and other receivables (Note 6)

16,014

23,759

Inventories (Note 7)

38,450

45,850

Other assets

1,748

1,731

 

62,533

74,862

Non-current assets

   

Intangible assets - Exploration and evaluation assets (Note 8)

8,317

6,452

Property, plant and equipment (Note 9)

200,017

224,953

Deferred tax asset

2,826

2,585

Other assets

1,410

1,236

 

212,570

235,226

Total assets

275,103

310,088

     

Liabilities

   

Current liabilities

   

Borrowings (Note 10)

14,419

17,663

Trade and other payables

63,452

65,909

Income tax payable

127

4,333

Lease liabilities (Note 11)

897

975

Provisions

3,050

3,276

 

81,945

92,156

Non-current liabilities

   

Borrowings (Note 10)

128,102

106,137

Lease liabilities (Note 11)

1,394

2,259

Provisions

10,678

10,939

 

140,174

119,335

Total liabilities

222,119

211,491

     

Equity

   

Share capital (Note 12)

353,686

353,686

Capital contribution

55,830

55,434

Share based payment reserve

9,860

8,987

Acquisition reserve

(33,060)

(33,060)

Cumulative translation reserve

(366)

(456)

Deficit

(336,695)

(289,631)

Equity attributable to owners

49,255

94,960

Non-controlling interest (Note 13)

3,729

3,637

Total equity

52,984

98,597

Total liabilities and equity

275,103

310,088

The accompanying notes are an integral part of these condensed interim consolidated financial statements.                                      

Avesoro Resources Inc.
Interim Consolidated Statements of Cash Flows
(stated in thousands of US dollars)
Unaudited

 

Nine months ended

September 30,

2019

Nine months ended

September 30,

2018

 

$'000

$'000

Operating activities

   

Net loss after tax  

(46,972)

(9,161)

Tax for the period

590

9,636

(Loss)/Profit before tax

(46,382)

475

Items not affecting cash:

   

Share-based payments (Note 3)

873

854

Depreciation (Note 9)

43,968

59,146

Write-off of assets (Note 9)

3,885

-

Unrealized foreign exchange (gain)/loss

(394)

390

Interest expense

10,347

10,350

Legal and other provisions

(487)

-

Gain on modification of loans

(275)

-

Loss on lease termination

-

566

Derivative liability gain

-

(105)

Changes in non-cash working capital

   

Decrease/(increase) in trade and other receivables

7,741

(3,114)

(Decrease)/increase in trade and other payables

(5,823)

22,909

Decrease/(increase) in inventories

7,400

(15,477)

Income taxes paid

(5,069)

(13,597)

Cash flows from operating activities

15,784

62,397

     

Investing activities

   

Payments to acquire property, plant and equipment

(19,554)

(29,280)

Payments to acquire intangible assets

(1,865)

(5,659)

(Increase)/decrease in other assets

(191)

66

Proceeds from sale of available for sale investment

-

44

Cash flows used in investing activities

(21,610)

(34,829)

     

Financing activities

   

Proceeds from borrowings (Note 10b)

15,250

6,150

Repayments of borrowings (Note 10)

-

(31,717)

Finance charges

(5,667)

(8,149)

Payment of finance leases

(945)

(1,317)

Dividend payment to non-controlling interest

-

(1,480)

Proceeds from exercise of stock options (Note 12)

-

33

Cash flows from (used in) financing activities

8,638

(36,480)

     

Impact of foreign exchange on cash balance

(13)

(279)

Net increase/(decrease) in cash and cash equivalents

2,799

(9,191)

Cash and cash equivalents at beginning of period

3,522

17,787

Cash and cash equivalents at end of period

6,321

8,596


The accompanying notes are an integral part of these condensed interim consolidated financial statements.

Avesoro Resources Inc.
Interim Consolidated Statements of Changes in Equity
(stated in thousands of US dollars)
Unaudited

 

Total Equity Attributable to Owners

   
 

Share
capital

Capital
contribution

Share-
based
payment
reserve

Acquisition

reserve

Fair value

reserve

Cumulative
translation
reserve

Deficit

Total

Non-
controlling
Interest

Total Equity

                     
 

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

Balance at January 1, 2018

353,653

54,022

7,840

(33,060)

(487)

(466)

(260,156)

121,346

3,714

125,060

(Loss)/Profit for the period

-

-

-

-

-

-

(11,960)

(11,960)

2,799

(9,161)

Other comprehensive income/(loss) for period

-

-

-

-

22

(76)

-

(54)

-

(54)

Total comprehensive income/(loss) for period

-

-

-

-

22

(76)

(11,960)

(12,014)

2,799

(9,215)

Exercise of stock options (Note 12)

33

-

-

-

-

-

-

33

-

33

Share-based payments (Note 3)

-

-

854

-

-

-

-

854

-

854

Dividends paid to non-controlling interest

-

-

-

-

-

-

-

-

(3,075)

(3,075)

Related party loans (Note 10)

-

1,698

-

-

-

-

-

1,698

-

1,698

Payment of related party loans (Note 10b)

-

(2,978)

-

-

-

-

-

(2,978)

-

(2,978)

Reserve transfer on sale of investment

-

-

-

-

465

-

(465)

-

-

-

Balance at September 30, 2018

353,686

52,742

8,694

(33,060)

-

(542)

(272,581)

108,939

3,438

112,377

                     

Balance at January 1, 2019

353,686

55,434

8,987

(33,060)

-

(456)

(289,631)

94,960

3,637

98,597

(Loss)/Profit for the period

-

-

-

-

-

-

(47,064)

(47,064)

92

(46,972)

Other comprehensive income for period

-

-

-

-

-

90

-

90

-

90

Total comprehensive income/(loss) for period

-

-

-

-

-

90

(47,064)

(46,974)

92

(46,882)

Share-based payments (Note 3)

-

-

873

-

-

-

-

873

-

873

Drawdown on Working Capital Facility (Note 10b)

-

396

-

-

-

-

-

396

-

396

Balance at September 30, 2019

353,686

55,830

9,860

(33,060)

-

(366)

(336,695)

49,255

3,729

52,984

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

Avesoro Resources Inc.
Notes to Condensed Interim Consolidated Financial Statements (Unaudited)
For the three and nine months ended September 30, 2019 and 2018
(in thousands of US dollars unless otherwise stated)

1  Nature of operations and basis of preparation

Avesoro Resources Inc. ("Avesoro" or the "Company"), was incorporated under the Canada Business Corporations Act on February 1, 2011. The focus of Avesoro's business is the exploration, development and operation of gold assets in West Africa, specifically the New Liberty Gold Mine ("New Liberty") in Liberia and the Youga Gold Mine ("Youga") in Burkina Faso. 

The Company's parent company is Avesoro Jersey Limited ("AJL"), a company incorporated in Jersey and Mr. Murathan Doruk Gűnal is the ultimate beneficial owner.

These condensed interim consolidated financial statements ("interim financial statements") have been prepared in accordance with International Accounting Standard ("IAS") 34, "Interim Financial Reporting".  They do not include all disclosures that would otherwise be required in a complete set of financial statements.  They follow accounting policies and methods of their application consistent with the audited consolidated financial statements for the year ended December 31, 2018 except for the adoption of new accounting policies as discussed below.  Accordingly, they should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2018.

These interim financial statements were authorised by the Board of Directors on November 13, 2019.

New accounting policies

The Company has initially adopted IFRS 16 from January 1, 2019. IFRS 16 introduced a single, on-balance sheet accounting model for lessees. As a result, the Company as a lessee, has recognised right-of-use assets representing its rights to use the underlying assets and lease liabilities representing its obligation to make lease payments. Lessor accounting remains the same. On transition to IFRS 16, the Company elected to apply the practical expedient to grandfather the assessment of which transactions are leases. It applied IFRS 16 only to contracts that were previously assessed as leases. Accordingly, the comparative information presented for 2018 has not been restated. Contracts that were not identified as lease under IAS 17 and IFRC 4 were not reassessed. Therefore, the definition of lease under IFRS 16 has been applied to contracts entered into or changed on or after January 1, 2019 and no new leases were identified.

The Company leases drill rigs and the fuel storage facility at New Liberty, which were previously classified as finance leases under IAS 17. For the finance leases, the carrying amount of the right-of-use asset and lease liability at January 1, 2019 were determined as the carrying amount of the lease asset and lease liability under IAS 17 immediately before date of IFRS 16 adoption.

In July 2019, the Company entered into an open pit mining contract with Orkun Group Sarl (the "Mining Contractor") at Youga.  The mining programme under the contract is based on the excavation of between 800,000 to 900,000 bank cubic metres ("BCM") of material per month, including a minimum of 120,000 tonnes of ore delivered to the ROM pad, per month. Over the life of mine, the contract is based on the excavation of a minimum of 42 million BCM ("Minimum TMM") of material over the life of mine which can be increased, at the Company's option, to 60 million BCM on the same terms.

The contract price of excavation during the Minimum TMM period is US$4.26 per BCM reducing to US$3.75 per BCM thereafter for the remainder of the Contract.  The Mining Contractor will pay an earn-in fee of US$0.51 per BCM to acquire the Company's existing heavy mining equipment fleet ("Existing Fleet") in Youga which will be off-set against the contract price during the Minimum TMM period.  Legal title and control of the Existing Fleet passes at the end of the Minimum TMM period.

The Mining Contractor also committed to supplement the Existing Fleet with additional equipment ("Supplemental Fleet") at its own cost.  This Supplemental Fleet has been determined as an identified asset under IFRS 16.  Although the Company obtains substantially all the economic benefits of the identified asset, Management have determined that the right to direct the identified asset lies with the Mining Contractor based on the following critical factors:

  • the Mining Contractor makes the decisions on where and when to deploy the identified asset;
  • the Mining Contractor has the right to change how to mine the excavation output; and
  • the Mining Contractor manages the day-to-day mining operations and employs the personnel required to fulfil the mining contract.

Accordingly, whilst judgmental Management concluded that this mining contract does not contain a lease.  Management is aware of a draft IFRS Interpretations Committee tentative agenda decision (included in the September 2019 IFRIC Update) assessing the judgement in determining who has the right to direct the assets in the context of a shipping contract. Based on the tentative agenda decision, principles in relation to the shipping contract may also be relevant in considering the Company's mining contract.  Management will revisit the accounting treatment detailed above following finalisation of the Committee's agenda decision.   

A number of other new standards are effective from January 1, 2019 but these do not have a material effect on the Company's financial statements.

Going concern

In July 2019, Avesoro Holdings Limited ("AHL") which is the Company's ultimate parent company and controlled by Mr. Murathan Doruk Günal, the eldest son of the Company's Chairman, reported that it had breached two undertakings contained in the parent company guarantee that AHL has provided to the Company's lenders Nedbank Limited and FirstRand Bank Limited (collectively the "Lenders") in respect of the Company's bank borrowings.

The technical breaches for the late submission of audited accounts of AHL to the Lenders and AHL's total equity financial covenant at December 31, 2018 being lower than the required level represent events of default by the Company under the cross-default provisions of the loan documents and allow the Lenders to accelerate repayment of the bank borrowings before their final maturity date.

In September 2019, the Lenders agreed to waive the events of default.

The operational transition to contractor mining at both mines earlier in the year, the security incident at Youga in August 2019 and heavy rainfall at New Liberty leading to the flooding of the Kinjor pit have resulted in disruption to mining activities and reduced gold production year to date.

AJL, the Company's major shareholder, has reiterated its commitment to continue to support the financial needs of the Company whilst the production guidance is under review and the offer to take the Company private as discussed in Note 15 remains open for acceptance by minority shareholders.  AJL and Mapa, a company controlled by the Company's Chairman, have deferred all principal repayments and associated interest payments on the AJL Working Capital Facility and Mapa equipment loans that are overdue and would have fallen due for payment before October 31, 2020 to October 31, 2020.  AJL provided $15 million of additional loans up to September 30, 2019 and a further $5 million loan was agreed in October 2019 of which $3.5 million has been drawn to date to satisfy the Company's near-term cash flow needs and working capital shortfall. 

The Company has received confirmation that Mr. Murathan Doruk Günal intends to support the Group for at least one year from the date of these interim financial statements.  On this basis, the Directors and Management continue to adopt the going concern basis of accounting in preparing the interim financial statements.

2  Segment information

The Company is engaged in the exploration, development and operation of gold projects in the West African countries of Liberia and Burkina Faso. Information presented to the Chief Executive Officer for the purposes of resource allocation and assessment of segment performance is focused on the geographical location of mining operations.  The reportable segments under IFRS 8 are as follows:

  • New Liberty operations;
  • Burkina operations which include the Youga Gold Mine and the Balogo satellite deposit;
  • Exploration; and
  • Corporate.

Following is an analysis of the Group's results, assets and liabilities by reportable segment for the three months ended September 30, 2019:

 

New Liberty
operations

Burkina
operations

Exploration

Corporate

Total

 

$'000

$'000

$'000

$'000

$'000

Profit/(Loss) for the period

(11,454)

(4,289)

(1,152)

560

(16,335)

Revenues

10,466

20,644

-

130

31,240

Production costs

         

- Mine operating costs

(11,062)

(19,657)

-

21

(30,698)

- Change in inventories

1,400

(290)

-

-

1,110

 

(9,662)

(19,947)

-

21

(29,588)

Depreciation

(7,181)

(1,486)

-

(28)

(8,695)

Capital additions

-property, plant and equipment

8,599

2,361

-

-

10,960

Following is an analysis of the Group's results, assets and liabilities by reportable segment for the nine months ended September 30, 2019:

 

New Liberty
operations

Burkina
operations

Exploration

Corporate

Total

 

$'000

$'000

$'000

$'000

$'000

Loss for the period

(34,294)

(2,084)

(5,243)

(5,351)

(46,972)

Revenues

70,699

68,024

-

401

139,124

Production costs

         

- Mine operating costs

(55,369)

(59,900)

-

193

(115,076)

- Change in inventories

(127)

(1,798)

-

-

(1,925)

 

(55,496)

(61,698)

-

193

(117,001)

Depreciation

(38,721)

(5,164)

-

(83)

(43,968)

Segment assets

193,558

63,159

12,828

5,558

275,103

Segment liabilities

(136,403)

(35,026)

(1,097)

(49,593)

(222,119)

Capital additions

- property, plant and equipment

19,763

4,188

-

-

23,951

- intangible assets

-

-

1,865

-

1,865

Following is an analysis of the Group's results, assets and liabilities by reportable segment for the three months ended September 30, 2018:

 

New Liberty
operations

Burkina
operations

Exploration

Corporate

Total

 

$'000

$'000

$'000

$'000

$'000

Profit/(Loss) for the period

(13,768)

3,047

(2,552)

(2,846)

(16,119)

Revenues

33,925

25,322

-

-

59,247

Production costs

         

- Mine operating costs

(26,532)

(20,433)

-

904

(46,061)

- Change in inventories

1,589

(1,174)

-

-

415

 

(24,943)

(21,607)

-

904

(45,646)

Depreciation

(19,942)

(1,988)

(110)

(17)

(21,976)

Segment assets

230,441

84,630

7,803

7,071

329,945

Segment liabilities

(163,997)

(41,017)

(5,679)

(6,875)

(217,568)

Capital additions

- property, plant and equipment

- intangible assets

5,181

-

2,788

-

-

2,300

-

-

7,969

2,300

Following is an analysis of the Group's results, assets and liabilities by reportable segment for the nine months ended September 30, 2018:

 

New Liberty
operations

Burkina
operations

Exploration

Corporate

Total

 

$'000

$'000

$'000

$'000

$'000

Profit/(Loss) for the period

(27,505)

33,803

(8,903)

(6,556)

(9,161)

Revenues

108,442

116,705

-

-

225,147

Production costs

         

- Mine operating costs

(73,228)

(62,342)

-

904

(134,666)

- Change in inventories

(298)

(2,863)

-

-

(3,161)

 

(73,526)

(65,205)

-

904

(137,827)

Depreciation

(51,142)

(7,706)

(227)

(71)

(59,146)

Capital additions

- property, plant and equipment

- intangible assets

28,902

-

15,522

-

40

5,659

-

-

44,464

5,659

3  Administrative and other expenses

 

Three months ended

Nine months ended

 

September 30,
2019

September 30,
2018

September 30,
2019

September 30,
2018

 

$'000

$'000

$'000

$'000

Wages and salaries

734

599

2,098

1,726

Legal and professional

466

563

1,335

1,522

Royalty payable to AJL (Note 14)

338

-

1,724

-

Depreciation

28

46

83

215

Share based payments

225

288

873

854

Tax on subsidiary dividends

-

957

-

1,758

Other expenses

127

535

876

924

 

1,918

2,988

6,989

6,999

4  Income taxes

Tax for the period comprises of:

 

Three months ended

Nine months ended

 

September 30,
2019

September 30,
2018

September 30,
2019

September 30,
2018

 

$'000

$'000

$'000

$'000

Current tax

(53)

219

(834)

(7,664)

Deferred tax

7

-

244

(1,972)

 

(46)

219

(590)

(9,636)

5  Earnings per share ("EPS")

 

Three months ended

Nine months ended

 

September 30,
2019

September 30,
2018

September 30,
2019

September 30,
2018

 

$'000

$'000

$'000

$'000

Net loss after tax attributable to Owners of the Company

(16,614)

(15,807)

(47,064)

(11,960)

         

Weighted average number of outstanding shares for basic EPS

81,575,260

81,575,260

81,575,260

81,565,260

Dilutive share options

-

-

-

-

Weighted average number of outstanding shares for diluted EPS

81,575,260

81,575,260

81,575,260

81,565,260

         

Basic EPS (US$)

(0.204)

(0.194)

(0.577)

(0.147)

Diluted EPS (US$)

(0.204)

(0.194)

(0.577)

(0.147)


6  Trade and other receivables

 

September 30,
2019

December 31,
2018

 

$'000

$'000

Trade receivable

94

165

Other receivable

7,400

11,557

Due from related parties (Note 14)

2,869

3,350

Pre-payments

5,651

8,687

 

16,014

23,759

Other receivables as at September 30, 2019 include VAT receivable from the Burkina Faso Government of $6.8 million (December 31, 2018: $3.1 million) and a financial asset with respect to factored VAT receivable from the Burkina Faso Government of $nil (December 31, 2018: $6.4 million).

7  Inventories

 

September 30,
2019

December 31,
2018

 

$'000

$'000

Gold doré

2,110

2,299

Gold in circuit

2,721

3,969

Ore stockpiles

3,621

3,849

Consumables

29,998

35,733

 

38,450

45,850

Ore stockpiles as at September 30, 2019 are stated at their net realisable values after cumulative write-down at New Liberty of $0.8 million (December 31, 2018: $1.6 million) and a provision for obsolescence of consumables at Youga of $0.6 million (December 31, 2018: $0.7 million).

8  Intangible assets - Exploration and evaluation assets

 

Nine months

ended

September 30,

2019

Year

ended

December 31,

2018

 

$'000

$'000

Beginning of the period

6,452

-

Additions in the period

1,865

8,234

Transfer to property, plant and equipment (Note 9)

-

(1,782)

End of the period

8,317

6,452

Intangible assets as at September 30, 2019 are in respect of capitalised exploration and evaluation assets at Ndablama and Ouaré, located 44 kilometres east of the Youga processing plant. Ouare is the subject of an infill drilling campaign to upgrade the confidence level and classification of the existing mineral resources.  Resource modelling and pit design shows that this satellite deposit will add further mine life to Youga.

Exploration and evaluation costs charged to profit and loss arose from the following licence areas:

 

Three months ended

Nine months ended

 

  September 30,
2019

  September 30,
2018

  September 30,
2019

  September 30,
2018

 

$'000

$'000

$'000

$'000

New Liberty MDA licence

23

635

1,114

2,794

Youga exploitation permit

478

354

1,859

2,322

Balogo exploitation permit

325

1,050

1,451

2,703

Zerbogo/Songo

12

391

296

1,000

Others

43

64

175

199

 

881

2,494

4,895

9,018

9  Property, plant and equipment

 

Mining assets

Stripping asset

Mine closure
and
rehabilitation

Right-of-use
assets

Machinery and 
equipment

Vehicles

Leasehold
improvement

Total

 

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

Cost

               

At January 1, 2018

208,507

16,229

6,212

11,758

74,793

3,092

86

320,677

Additions

6,736

14,957

756

1,232

29,707

516

-

53,904

Transfer from intangible assets

1,782

-

-

-

-

-

-

1,782

Disposals

-

-

-

(7,000)

(1,034)

(335)

-

(8,369)

At December 31, 2018

217,025

31,186

6,968

5,990

103,466

3,273

86

367,994

Additions

3,266

19,763

30

-

892

-

-

23,951

Disposals

(1,034)

-

-

-

-

-

-

(1,034)

Write-off of mining equipment

-

-

-

-

(5,778)

-

-

(5,778)

At September 30, 2019

219,257

50,949

6,998

5,990

98,580

3,273

86

385,133

                 

Accumulated depreciation

               

At January 1, 2018

52,105

1,838

2,290

2,564

10,880

1,362

86

71,125

Charge for the year

37,618

17,017

1,026

1,265

17,343

544

-

74,813

Disposals

-

-

-

(1,528)

(1,034)

(335)

-

(2,897)

At December 31, 2018

89,723

18,855

3,316

2,301

27,189

1,571

86

143,041

Charge for the year

27,364

2,102

579

833

12,541

549

-

43,968

Write-off of mining equipment

-

-

-

-

(1,893)

-

-

(1,893)

At September 30, 2019

117,087

20,957

3,895

3,134

37,837

2,120

86

185,116

                 

Net book value

               

At December 31, 2018

127,302

12,331

3,652

3,689

76,277

1,702

-

224,953

At September 30, 2019

102,170

29,992

3,103

2,856

60,743

1,153

-

200,017

Mining equipment with carrying value of $3.9 million had been written off after being damaged beyond repair during a security breach at Youga in August 2019.

10  Borrowings

 

September 30,

2019

December 31,

2018

 

$'000

$'000

Current

   

Bank loan - Senior Facility

9,652

6,676

Related party loan

-

10,987

Working Capital Facility

4,767

-

 

14,419

17,663

Non-current

   

Bank loan - Senior Facility

49,893

51,801

Bank loan - Subordinated Facility

10,598

10,528

Working Capital Facility

35,500

23,142

Shareholder loan

3,984

3,985

Related party loan

28,127

16,681

 

128,102

106,137

(a)  Bank loans

On December 17, 2013 the Company entered into an agreement for an $88 million project finance loan facility with Nedbank Limited and FirstRand Bank Limited (collectively the "Lenders"), (the "Senior Facility"), and also entered into a subordinated loan facility agreement for $12 million with RMB Resources (the "Subordinated Facility"). On December 9, 2015 the Company entered into an agreement for an additional $10 million Tranche B Senior Facility (together with the Senior Facility and the Subordinated Facility the "Loan Facilities") provided by the Lenders.  These Loan Facilities, which have been fully drawn, financed the development of the Company's New Liberty Gold Mine.  $38.4 million of the Senior Facility principal has been repaid to date.

(b)  Working Capital Facility with AJL

 

  Nine months
ended

September 30,

2019

  Year

ended

December 31,
2018

 

$'000

$'000

Beginning of the period

23,142

14,938

Fair value of new tranches of loans

14,854

17,947

Repayments

-

(10,801)

Loan modification

169

-

Interest charged

2,102

1,058

End of the period

40,267

23,142

Gross proceeds of new tranches during the period ended September 30, 2019 was $15.3 million (year ended December 31, 2018: $21.9 million) of which $0.4 million (year ended December 31, 2018: $3.9 million) has been credited to capital contribution. Gross repayments during the period ended September 30, 2019 amounted to $nil (year ended December 31, 2018: $13.7 million) of which $nil (year ended December 31, 2018: $2.9 million) has been charged to capital contribution.

In August 2019, principal repayments and associated interest payments on the loans payable to AJL, which were overdue and would have fallen due for payment before October 31, 2020, have been deferred to October 31, 2020.

(c)  Related party loans payable to Mapa İnşaat ve Ticaret A.Ş. ("Mapa")

 

 Nine months
ended

 September 30,

2019

  Year

ended

December 31,
2018

 

$'000

$'000

Beginning of the period

27,668

22,263

Fair value of new loans

-

9,916

Repayments (including interest)

(448)

(6,466)

Loan modification

(444)

-

Interest charged

1,847

2,439

Unrealised foreign exchange gain

(496)

(484)

End of the period

28,127

27,668

Gross proceeds of new loans during the period ended September 30, 2019 was $nil (year ended December 31, 2018: $10.3 million) of which $nil (year ended December 31, 2018: $0.4 million) has been credited to capital contribution.  Principal repayments during the period ended September 30, 2019 amounted to $nil (year ended December 31, 2018: $4.8 million) and interest repayments during the period ended September 30, 2019 amounted to $0.4 million (year ended December 31, 2018: $1.7 million). 

In August 2019, principal repayments and associated interest on the equipment finance loans to Mapa, which were overdue and would have fallen due for payment before October 31, 2020, have been deferred to October 31, 2020.

11  Lease liabilities

Lease liabilities as at September 30, 2019 relate to drill rigs and the fuel storage facility at New Liberty.  Lease liability is measured at the present value of the leased payments.  Lease payments are apportioned between the finance charges and reduction of lease liability using the incremental borrowing rate implicit in the lease to achieve a constant rate of interest on the remaining balance of the liability.

 

September 30,

2019

December 31,

2018

 

$'000

$'000

Gross finance lease liability

   

-  Within one year

1,099

1,266

-  Between two and five years

1,522

2,539

 

2,621

3,805

Future finance cost

(330)

(571)

Present value of lease liability

2,291

3,234

     

Current portion

897

975

Non-current portion

1,394

2,259

12  Equity

(a)      Authorised

Unlimited number of common shares without par value.                                                              

(b)      Issued

 

 Shares

 $'000

Balance at January 1, 2018

8,156,075,823

353,653

Effect of 100:1 share consolidation

(8,074,515,563)

-

Exercise of stock options

15,000

33

Balance at December 31, 2018 and September 30, 2019

81,575,260

353,686

(c)       Stock options

Information relating to stock options outstanding at September 30, 2019 is as follows:

   

Nine months
ended

September 30,
2019

 

Year ended

December 31,

2018

 

Number of

options

  Weighted
average

exercise price
per share

Number of
options

  Weighted
average

exercise price
per share

   

         Cdn$

 

      Cdn$

Beginning of the period

4,209,233

3.94

2,829,428

4.96

Options granted

-

-

1,681,000

2.68

Options exercised

-

-

(15,000)

2.66

Options expired

(20,062)

50.73

(13,362)

70.32

Options forfeited

(208,500)

2.77

(272,828)

3.55

Share consolidation adjustment

-

-

(5)

4.96

End of the period

3,978,671

3.74

4,209,233

3.94

13  Non-controlling interest

The composition of the non-controlling interests held by the Government of Burkina Faso is as follows:

 

Netiana Mining

Company

$'000

Burkina Mining
Company

$'000

 

Total

$'000

At January 1, 2018

2,202

1,512

3,714

Share in net income

1,140

1,858

2,998

Dividend distribution

(1,673)

(1,402)

(3,075)

At December 31, 2018

1,669

1,968

3,637

Share in net loss

43

49

92

At September 30, 2019

1,712

2,017

3,729

14  Related party transactions

(a) Borrowings

The Company's related party loans payable to Mapa, Working Capital Facility with AJL and loan payable to AJL are disclosed in Note 10.

(b) Royalty payable to AJL

Pursuant to the share purchase agreement between the Company and AJL on the acquisition of the Youga Gold Mine in December 2017, the Company accrued a royalty payable to AJL of $1.7 million for the nine months ended September 30, 2019 in respect of a net smelter return on the Youga Gold Mine.

(c) Provision/(purchases) of goods and services

The Company also provided/(purchased) the following services from related parties:

 

Three months ended

Nine months ended

 

September 30,

2019

September 30,

2018

September 30,

2019

September 30,

2018

 

$'000

$'000

$'000

$'000

Technical and support staff services provided by the Company to:

MNG Gold Liberia Inc., a subsidiary of Company's parent company

-

170

304

316

         

Sale of consumables* by the Company to:
MNG Gold Liberia Inc., a subsidiary of Company's parent company

140

1,068

304

1,606

         

Sale of consumables and catering services by the Company to:

Faso Drilling Inc., a subsidiary of Company's parent company

-

336

-

336

         

Drilling services provided to the Company by:

Zwedru Mining Inc., a subsidiary of Company's parent company

(10)

(357)

(709)

(2,211)

         

Drilling services provided to the Company by:

Faso Drilling Company SA., a subsidiary of Company's parent company

(423)

(1,761)

(1,378)

(5,608)

         

Charter plane services provided to the Company by:

MNG Gold Liberia Inc., a subsidiary of Company's parent company

(90)

(90)

(270)

(270)

         

Travel services provided to the Company by:

MNG Turizm ve Ticaret A.S., an entity controlled by the Company's Chairman

-

(14)

-

(20)

*

Company's gross billings as agents in the procurement, shipping and handling of consumables


Included in trade and other receivables is a receivable from related parties of $2.9 million as at September 30, 2019 (December 31, 2018: $3.4 million). 

Included in trade and other payables is $4.5 million payable to related parties as at September 30, 2019 (December 31, 2018: $3.3 million).

15  Subsequent events

On October 1, 2019 a pit wall and ramp failure occurred in the north side of the Kinjor-east pit at New Liberty.  There were no injuries or equipment damage, however, mining activities within the Kinjor-East pit have been suspended. Mining is continuing at the Marvoe and Kinjor-South pits at New Liberty.

On October 17, 2019 AJL formally commenced an insider bid to acquire all of the issued and outstanding shares of the Company, other than shares owned by AJL, at a price of £1.00 per share (the "Offer").  A take-over circular containing additional information about the Offer is available at www.sedar.com.

On October 21, 2019 the board of directors of the Company filed a directors' circular that recommends that minority shareholders of the Company accept the Offer and deposit their common shares in the Company to the Offer.  A copy of the directors' circular is available at www.sedar.com and on the Company's website. 

On October 21, 2019 the Company entered into a loan agreement in connection with an additional working capital facility of up to $5 million with AJL ("New Facility") to assist with satisfying the Company's near term cashflow needs.  The Company has drawn a first tranche of $3.5 million with the second tranche of up to $1.5 million drawable until December 31, 2019, at the mutual agreement of both parties. This New Facility is unsecured and is subordinated to the Company's existing facilities. Interest is charged on the drawn amount at a fixed rate of 3.0 per cent per annum. The tranches of the New Facility are due to be repaid in full no later than 12 months following drawdown of the relevant tranche.

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Inca One Gold

Inca One Gold

Inca One Gold is a TSXV listed gold producer operating two fully permitted ore processing facilities in Peru. Peru is the world's sixth-largest producer of gold and its small-scale mining sector is growing rapidly due to industry formalization. Inca One, now in its sixth year of commercial production, is led by an experienced and capable management team that has delivered three consecutive years of growing gold production and in 2019 produced more than 25,000 ounces of gold... LEARN MORE