TSX- and Aim-listed gold miner Avesoro Resources’ subsidiaries, Burkina Mining and Netiana Mining, have entered into an openpit mining contract with Orkun Group, for the Youga gold mine, in Burkina Faso.
The appointment of the contractor will help to reduce the company’s expected capital expenditure requirement for the second half of the year by $4-million, as Orkun will assume responsibility for all future mining fleet overhaul costs, while Avesoro will reduce its direct employee headcount.
This should soften the company’s funding shortfall position, which it announced on June 10.
CEO Serhan Umurhan on Monday said that, should the gold price remain at about $1 400/oz through the second half of the year, the company would generate $11-million more revenue than anticipated.
The second half of the year’s funding gap will reduce to between $10-million and $15-million, compared with a previous shortfall guidance of between $25-million and $30-million.
Umurhan said the funding gap included almost $13-million of debt provided by a lender, which was due for repayment this year; however, Avesoro was in discussions with the lender about the deferral of the debt repayments.
The company is also reviewing other options to further reduce the funding gap for the second half of the year, including potential reductions in capital expenditure requirements that may also be realised at the New Liberty mine, in Liberia, if a similar agreement can be reached with the preferred mining contractor for that mine.
The mining programme under the Orkun contract is based on the excavation of between 800 000 and 900 000 bank cubic metres of material a month, including a minimum of 120 000 t of ore a month delivered to the run-of-mine pad.
To achieve the material movement targets, Orkun will supplement the existing Youga mining fleet with five additional excavators and 15 haul trucks at its own cost.