Avesoro Resources (LSE:ASO) revealed that it met its 2018 full-year gold production guidance on Thursday, helping shares to bounce 2.6pc to 166.8p. The West African-focused business produced 220,458oz over the period, a 15pc increase on its output in 2017.

Avesoro also provided a break down of this production down on an asset-by-asset basis. It produced 109,707oz from its New Liberty gold mine over the period, a robust 44pc increase on FY 2017. However, this fell just short of the firm’s annual production forecast of 110,000-120,000.

New Liberty is Liberia's first and largest commercial gold mine. The project has an estimated proven and probable mineral reserve of 7.4Mt with 717,000oz of gold grading 3.03g/t. It also offers an estimated measured and indicated mineral resource of 11.5Mt with 1,105,000oz of gold grading 3.0g/t and an estimated inferred mineral resource of 3.7Mt with 424,000 ounces of gold grading 3.6g/t.

Meanwhile, the company produced 110,751oz from its Youga gold mine in 2018. Although this represents a 4pc drop on the mine's output in 2017, it falls within Avesoro’s 110,000-120,000 production forecasts for the year. This helped to take total 2018 output into its forecast 220,000-240,000oz range.

Youga is based in Burkina Faso and acquired by Avesoro from Avesoro Jersey in December 2017. It hosts combined proven and probable mineral reserves of 11.2Mt with 660.1Koz of gold grading 1.84g/t. It also offers a combined measured and indicated mineral resource of 16.64Mt with 924.2Koz of gold grading 1.73g/t and a combined inferred mineral resource of 13Mt with 685Koz of gold grading 1.7g/t.

Avesoro’s chief executive Serhan Umurhan said 2018 represented a ‘significant year’ for the business, adding: ‘I am very pleased to announce that we have achieved our full year production guidance for 2018, which remained unchanged throughout the year.

‘2018 annual production of 220,458 ounces also represents a 15% increase compared with 2017 pro-forma production from the two mines. The substantial increase in gold production at New Liberty of 44% versus the prior year also underlines the strong performance of our team as we continue to optimise operational performance and add value at our mines.’

Avesoro now intends to provide 2019 production guidance in March 2019. It will also provide an updated mineral reserve and resource estimate for New Liberty, including its Ndablama satellite deposit.

On this, Umurhan said: ‘Moving into 2019, I look forward to updating the market on the results of the ongoing pre-feasibility study at the New Liberty underground project which is also expected to include the first open pit reserves from the Ndablama satellite deposit towards the end of the first quarter of 2019. The focus for this coming year will be on the delivery of strong cash flow and further debt reduction following the substantial reinvestment of cash generated by operations that characterised 2018.’

Author: Daniel Flynn

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