- Compass Group 887.00 0.00
- Croda Intl. 2,529.00 0.00
- Eurasian 254.80 0.00
- Hsbc Hldgs.uk 726.00 0.00
- Next 4,580.00 0.00
- Woburn Energy 1.50 0.00
- Xtract 0.13 0.00
Mining Sector: Avocet Mining shares plunge after profits warning and lower output
Friday, 29th June 2012
Avocet Mining's (LON:AVM) shares plunged by more than 35% after it issued a profits warning ahead of its results for the half year on 1 August.The company now expects its gold production for this year to be reduced from 160,000 ounces to between 135,000 and 140,000 ounces following lower-than-expected output for the year to date and a reassessment of mining for the remainder of the year.
Avocet says this reduction reflects the following challenges at the Inata mine in the first half of the year:
* Lower than planned availabilities among the company's own excavators, and among the rented excavators introduced in late 2011/early 2012 to increase waste stripping capacity
* Lower than expected plant head grades in the second quarter, with inadequate waste movement in the first half of 2012 limiting access to areas of higher grade ore
* Slightly lower recoveries, reflecting preg-robbing from carbon-rich ore and lower grades processed in the second quarter
* Processing rates slightly lower than planned due to treatment of a higher proportion of harder transitional and fresh ore
Chief executive Brett Richards said: "We have had a difficult second quarter in 2012, with issues related to equipment availability continuing to affect mining rates and capacity.
"We continue to aggressively address the issues impacting production and envisage production of between 150,000 and 160,000 ounces for our revised 2013 production target.
"The Inata resource remains very robust and will continue to increase as we focus on exploration drilling in the Bélahouro region.
"Ongoing work to increase our understanding of the resource will leave us better placed to optimise the production at the mine, and I am confident that this will allow us to maximise the value from Inata."
One of the top risers was Ariana Resources (LON:AAU) - up by more than 11% in late afternoon trading.
Its annual general meeting heard that it had been a exciting year for Ariana, and one which has been punctuated with key advancements towards bringing its Red Rabbit gold project into production, in addition to highly significant new discoveries and exploration results.
Chairman Michael Spriggs said: "After ten years of growth and development, I am confident that Ariana has successfully transformed into a dynamic exploration and mine development company, now on the threshold of becoming a profitable gold producer targeting 20,000 ounces of gold equivalent per annum from late 2013.
"Our focus remains squarely on Turkey, which has increasingly demonstrated itself to be a premier investment destination with robust mining legislation adopted in 2004 and updated again in 2010.
"As a rapidly growing new global power, which is targeted to be the world's tenth largest economy by 2023, the government of Turkey recognises that monetising its strategic national resources is a crucial aspect in achieving its growth objectives.
"Already Europe's largest gold producer, Turkey has an outstanding pedigree as a gold and precious metals province, and the Ariana team is centred on maximising our exploration and development expertise to rapidly advance our current assets and delineate additional new multi-million ounce deposits.
"Our long term commitment in Turkey has provided us with not only a comprehensive understanding of the exploration potential of the area, but also a strong network of relationships with key partners and the relevant authorities, enabling us to deliver on our operational objectives."
The sector's biggest riser was Oxus Gold (LON:OXS) - up by nearly 26%
At 4:06pm:
(LON:AAU) share price was +0.25p at 2.5p
(LON:AMI) American Investment Trust share price was +17.38p at 319.88p
(LON:AQP) Aquarius Platinum share price was +1.3p at 45.8p
(LON:AVM) Avocet Mining share price was -53.22p at 97.58p
(LON:BEM) share price was +0.01p at 11.63p
(LON:BKY) share price was -0.25p at 24.25p
(LON:CEY) Centamin Egypt Ld share price was +2.68p at 69.33p
(LON:CHL) share price was +0.38p at 10.88p
(LON:CZA) share price was +0.5p at 38p
(LON:FDI) Firestone Diamonds share price was +0.13p at 6.25p
(LON:FRES) share price was +48p at 1463p
(LON:GEMD) share price was +2.1p at 196.6p
(LON:HOC) share price was +12.9p at 477.3p
(LON:KMR) Kenmare Resources share price was +0.96p at 40.88p
(LON:OXS) Oxus Gold share price was +0.45p at 2.2p
(LON:VED) Vedanta Resources share price was +48p at 919.5p
Story provided by StockMarketWire.com
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