Avesoro Resources posts earnings loss in year of transition

Avesoro Resources posted its results for the year to 31 December on Wednesday, with revenues of $63.6m generated from gold sales of 50,264 ounces since the start of commercial production at an average realised sale price of $1,266 per ounce.

The AIM-traded firm reported a mining cost of $5.42 per tonne mined, and a processing cost of $28.71 per tonne.

Its underlying EBITDA loss was $30.4m, adjusted for non-routine transactions for the year, and it had capital expenditure of $27.7m.

Avesoro’s net loss after tax stood at $113m, predominantly from a $42m impairment charge on New Liberty due to the operational issues experienced throughout 2016.

The year-end principal outstanding on the debt was $97.6m, net of $12.4m of principal repaid during the year, year-end cash stood at $13.4m.

“As highlighted in our Q4 production and operations update, 2016 has been a year of transition for Avesoro Resources, with the arrival of the new management team in Q3 2016 marking the beginning of the turnaround process at New Liberty,” said chief executive officer Serhan Umurhan.

“Whilst the period was challenging for the company, the new leadership team achieved significant progress during the latter stages of the financial year, with strong improvements in performance across the entire operation and further operational and financial improvements having taken place during Q1 2017.

“I am pleased that the implementation of these operational changes has translated into Avesoro publishing our maiden production and cost forecasts.”

Umurhan said the company now sat in a position of strength, having reduced and renegotiated its debt facilities.

“Whilst today's financial results in the main reflect the historical difficulties of 2016, the operational improvements achieved during Q4 2016 have provided Avesoro with a solid platform for further material improvements throughout 2017.

“We are now focussed on continuing to sustainably increase our production profile, whilst reducing all-in-sustaining costs.

“Avesoro is now strongly positioned for further growth and we are confident that New Liberty will create real, sustained value for our shareholders in the coming years.”