Patagonia Gold ups full-year guidance to reflect improved monthly production

South America-focused mining company Patagonia Gold told investors on Wednesday that total output for its most recent trading year hit 26,005 ounces of gold equivalent, helped by a continued monthly production ramp-up at its Cap Oeste project.

Monthly production from Cap Oeste topped 3,646 ounces of gold equivalent throughout January, with the firm expecting to record more than 4,200 ounces in February, leading management to set a full-year output target of 59,000 ounces.

Patagonia said that although production for 2017 was below expectations, due to a series of issues including importation delays, equipment downtime and industrial action, it was still confident its circuit was running well and that 2018 production guidance will be achieved.

A recently completed JORC compliant resource model of measured and indicated resources showed that Cap Oeste contained 10,555,741 tonnes at an average grade of 2.07 grams of gold and 62.85 grams of silver per tonne, a portion of which was made up of high-grade COSE style non-refractory mineralisation.

Separately, at Patagonia's Calcatreu project, purchased on 1 February, the firm engaged the services of CUBE Consulting to update the asset's resource model at current metal prices before exploration work kicked off later in the month when a geophysics crew was set to start an induced polarisation programme on the extension of mineralisation where historic anomalies already existed.

Commenting on the outfit´s update, analysts at SP Angel said: "It is good to see new gold and silver production coming from Cap Oeste. The company now needs to get a grip on its administrative expenses which include an element of local taxes to enable returns to shareholder."

As of 1120 GMT, shares were flat on 1.25p.