Unable to maintain the record production level attained in the first quarter at its 85%-owned Bonte alluvial gold mine in Ghana, Akrokeri-Ashanti Gold Mines (YAG-V) posted a US$-747,941 loss for the recent third quarter.
The loss, which translates to US2 per share, compares with year-ago net profit of US$300,712 (or 1 per share). Revenue between the two periods slipped to US$4.4 million from US$4.9 million. Cash flow from operations before working capital changes was US$599,524, about a third of the US$1.8 million generated the previous year.
Third-quarter production from Bonte amounted to just 15,926 oz., compared with 17,698 oz. a year earlier. Expected production for the recent quarter was 19,000 oz. So far this year, production is 3,704 oz. below expectations. The shortfall is owing to recovery problems. High-grade alluvial zones mined during the period contained much finer gold grains than expected, and the main sluice recovery system failed to trap them. Mining subsequently moved to coarser but lower-grade terrace zones.
Lower gold production is expected to continue through the fourth quarter. Akrokeri hopes the installation of larger Knelson concentrators, slated to begin in December, will significantly increase recovery rates at the Jeni plant.
The third-quarter troubles took a bite out of the company’s results for the first nine months of the year. Net profit was US$121,415 (nil per share), well off year-ago net profit of US$1.1 million (3 per share). Revenue fell US$213,408 to about US$14.3 million. Similarly cash flow fell to US$3.5 million from US$4.2 million.
Akrokeri’s woes began in the second quarter after heavy rainfalls hampered production and sent earnings lower. The year had begun on a promising note with Akrokeri posting record production of 19,858 oz. from Bonte, along with record revenue, cash flow, and net income.
At the end of September, Akrokeri had US$507,766 in cash and some 40.8 million common shares outstanding.
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