Avocet Mining cuts full-year production target, shares slump
Aug 5 (Reuters) - Avocet Mining Plc cut its full-year production forecast and reported a 31 percent fall in quarterly gold output as it processed lower-grade ore, sending its shares down as much as 12 percent.
The company, which mines gold in Burkina Faso and Guinea, said it expected to produce 105,000 ounces this year. It had earlier forecast production within a range of 105,000 to 115,000 ounces.
Avocet's shares lost more than 85 percent of their value last year as a tumbling gold price accentuated a hefty reserve downgrade and funding worries at its key mine, Inata in Burkina Faso.
The company said production for the second quarter ended June 30 fell to 21,650 ounces from 31,245 ounces a year earlier.
Avocet, which has a market capitalisation of $28 million, said on Tuesday that funding requirements for the Inata mine had been reduced to a range of $15 million to $20 million through a revised mine plan and additional cost reductions.
"Challenges remain very high," Investec Securities analyst Marc Elliott said. "They have to deliver and they have to refinance."
Avocet reported a pretax loss of $46 million for the first half of the year, compared with a pretax loss of $65.7 million a year earlier.
The company's shares were down 9.2 percent at 7.66 pence at 0942 GMT. (Reporting by Karen Rebelo in Bangalore; Editing by Robin Paxton)