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It’s not been the best start to our trade on gold miner Avesoro Resources (ASO:AIM) thanks to downgraded full year production guidance weighing on the share price.
However, we originally said investors must be patient and that near-term results wouldn’t be outstanding as the company was still making improvements to its New Liberty mine in Liberia.
We’re now at a turning point. First, a new mine plan increases forecast production to an average of 149,000 ounces per year over the next four years, driving better cash flow.
Second, Avesoro has firmed up acquisition plans for two mines in Burkina Faso. The Youga and Balogo mines are forecast to produce 110,000 ounces of gold in 2017. Those mines plus New Liberty are expected to produce 230,000 ounces of gold in 2018.
Youga and Balogo are being acquired from 73.5% shareholder Avesoro Holdings, a Turkish business which used to be called MNG Gold. The latter bailed out Avesoro (previously called Aureus Mining) when it encountered financial and operational problems in New Liberty’s early days as a producing mine.
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