Mako Gold

TSX/AIM-listed Avesoro Resources has released its audited annual Financial analysis for the quarter and full year ended December 31, 2018.

Serhan Umurhan, CEO of Avesoro, comments:

“2018 was a transformational year for Avesoro in which we achieved our 2018 annual production guidance of 220,458 oz of gold and increased group gold production by 179% compared with the prior year.

“I am also pleased to see a strong increase in group revenues to US$282.2 million and robust operational cash flows of US$73.1 million for the year.

“Our focus remains on producing profitable oz from our gold mines and delivering long term value by optimising the efficiency of our operations and increasing the company’s Mineral Reserves base and project pipeline.

“Since the change of management at the company and New Liberty in July 2016, we have transformed a troubled, loss making mine by driving down costs and increasing production into a solid cash flow generating asset in 2018.

“The Youga Gold Mine and Balogo satellite deposit, which we acquired in December 2017, have also made a substantial contribution to the group’s cash flow during the year.

The cash flow from operations enabled us to undertake an exceptional exploration drilling campaign during 2018 which has already resulted in Mineral Reserves almost doubling at New Liberty to 1,355 koz and developing the underground mining plan for the deposit combined with first reserves from the Ndablama satellite deposit.

“I look forward to delivering on the New Liberty life of mine extension plan during 2019 with the preparations for the transition towards underground operations at New Liberty now underway. We also expect to announce an increase in reserves at Youga during Q2 2019.

“We are consistently delivering on our plan to build a multi-asset gold producer and management is committed to continuing to do so. I would also like to take the opportunity to thank the members of our dedicated team for their contribution to the Company’s multiple successes in 2018.”

Full year 2018 operational highlights:

  • 2018 gold production of 220,458 oz, in line with guidance for the year from the New Liberty Gold Mine in Liberia and Youga Gold Mine in Burkina Faso; and
  • Consolidated operating cash costs of US$774 per oz sold and all-in sustaining costs of US$1,043 per oz sold1;

Full year 2018 financial highlights:

  • Company revenues of US$282.8 million, an increase of 189% year on year, driven by gold sales of 220,998 oz, a 186% increase YoY at an average realised gold price of US$1,275 per oz, a 1% increase YoY
  • Company EBITDA of US$77.5 million, an increase of 348% YoY and EBITDA margin of 27%;
  • Cash flow generated from operations of US$73.1 million in 2018, a 571% increase YoY
  • Total capital expenditure of US$44.7 million, including US$6.5 million exploration expenditure and US$23.2 million on additional heavy mining equipment and US$15 million on capitalised waste stripping; and
  • Gross Debt of US$127.0million, a reduction of 5% YoY

Q4 financial highlights:

  • Company revenues of US$57.7 million, a decrease of 3% quarter on quarter (QoQ), driven by gold sales of 46,186 oz, a 6% decrease QoQ at an average realised gold price of US$1,226 per oz, a 1% increase QoQ
  • Consolidated operating cash costs of US$982 per oz sold, and AISC of US$1,226 per oz sold, an increase of 12% and 6% respectively QoQ
  • Company EBITDA of US$4.7 million, a reduction of 43% QoQ and EBITDA margin of 8%; and
  • Cash flow generated from operations of US$10.7 million, a 26% reduction QoQ

Post period highlights:

  • Pre-Feasibility Study released for New Liberty resulting in a seven year life of mine extension, total forecast gold recovery of 1.26 million oz and a post-tax NPV of US$286 million
  • Consolidated FY 2019 gold production expected to be 210,000 to 230,000 oz, at an operating cash cost of US$850 – US$910 and AISC of US$1,100 – US$1,190 per oz sold; and
  • Full draw down of the US$10 million additional working capital facility announced on March 6, 2019, with Avesoro Jersey for general working capital purposes