Avesoro Resources Inc. – FINANCIAL RESULTS

Avesoro Resources Inc., the TSX and AIM listed West African gold producer, is pleased to announce the release and publication of its unaudited Financial Statements and Management’s Discussion and Analysis for the quarter ended March 31, 2019.

Q1 2019 Operational Highlights:

• Gold production of 45,098 ounces from the New Liberty Gold Mine in Liberia (“New Liberty”) and Youga Gold Mine in Burkina Faso (“Youga”); and
• Consolidated operating cash costs of US$911 per ounce sold¹, an improvement of 7% QoQ, and all-in sustaining costs (“AISC”) of US$1,149 per ounce sold¹, an improvement of 6% QoQ and both within the full year guidance range; 

Q1 2019 Financial Highlights:

• Company revenues of US$59.9 million, an increase of 4% quarter on quarter (“QoQ”), driven by gold sales of 45,810 ounces at an average realised gold price of US$1,304 per ounce, a 6% increase QoQ;
• Company EBITDA of US$9.5 million, an increase of 102% QoQ and EBITDA margin of 16%¹;
• Total capital expenditure of US$7.9million;
• Full draw down of US$10 million additional working capital facility (as announced on March 6, 2019), resulting in gross debt of US$138.8million, an increase of 9% QoQ; and
• Closing cash balance of US$9.3 million.

Post Period Highlights:

• Proven and Probable Mineral Reserves increased by 154koz, an increase of 23% at Youga;
• Four year life of mine extension (to 2031), total forecast gold recovery of 734,066 ounces and a post-tax Net Present Value (“NPV”) of US$142.6 million² and Life of Mine (“LOM”) free cash generation of US$186.8 million; and
• Estimated combined project level post tax and debt NPV of New Liberty and Youga increased to US$428.6 million² and estimated combined project level post-debt and post-tax LOM cash flows of US$556.8 million, at US$1,300/oz gold price.

Notes:
¹ See “Non-GAAP Financial Measures”; and
² At a 5% discount rate and US$1,300 gold price, after debt repayment and associated finance charges. 

Serhan Umurhan, Chief Executive Officer of Avesoro, commented: “Although gold production was slightly behind our targeted levels for the Quarter, we remain on track to achieve annual production and cost guidance for 2019, and I am pleased to report that both consolidated operating cash costs and all in sustaining cash costs were reduced during the Quarter. This was primarily driven by a 28% reduction in unit mining costs at New Liberty to US$1.68 per tonne and by 14% to US$1.85 per tonne at Youga.

We have now worked through the unplanned mining dilution at Youga and expect the mined grade to increase throughout Q2 2019. The focus going forward remains firmly on driving efficiencies and continued operational improvements to deliver on our recently released revised life of mine plans at our assets in Liberia and Burkina Faso.” 

Table 1: Key Operational and Financial Highlights

Metric	Q1 2019	Q4 2018	Q1 2019 vs Q4 2018	Q1 2018	Q1 2019 vs Q1 2018
Gold production, oz	45,098	44,962	0%	68,088	-34%
Gold sold, oz	45,810	46,186	-1%	68,553	-33%
Operating cash costs US$/oz sold	911	982	-7%	624	46%
All in sustaining costs US$/oz sold	1,149	1,226	-6%	914	26%
Average realised gold price, US$/oz	1,304	1,226	6%	1,333	-2%
Revenues, US$m	59.9	57.7	4%	91.4	-34%
EBITDA, US$m	9.5	4.7	102%	40.2	-76%
EBITDA margin	16%	8%	98%	44%	-64%
Cash flow from/(used in) operations, US$m	5.1	10.7	-52%	39.4	-87%
Capital expenditure, US$m	7.9	9.8	-19%	13.6	-42%
Cash, US$m	9.3	3.5	166%	23.0	-60%
Gross Debt, US$m	138.8	127.0	9%	137.3	1%

 

Table 2: Asset Level Financial Highlights 

Metric	Q1 2019	Q4 2018	Q1 2019 vs Q4 2018	Q1 2018	Q1 2019 vs Q1 2018
New Liberty
Gold production, oz	25,855	24,573	5%	27,870	-7%
Gold sold, oz	26,323	26,014	1%	28,098	-6%
Mining cost, US$/t	1.68	2.34	-28%	2.51	-33%
Processing cost, US$/t	23.65	24.11	-2%	24.52	-4%
Operating cash costs* US$/oz sold	831	982	-15%	846	-2%
All in sustaining costs US$/oz sold	1,031	1,246	-17%	1,095	-6%
Average realised gold price, US$/oz	1,303	1,224	6%	1,328	-2%
Youga
Gold production, oz	19,243	20,389	-6%	40,218	-52%
Gold sold, oz	19,487	20,172	-3%	40,455	-52%
Mining cost, US$/t	1.85	2.14	-14%	2.40	-23%
Processing cost, US$/t	18.87	17.14	10%	19.63	-4%
Operating cash costs* US$/oz sold	1,017	943	8%	470	116%
All in sustaining costs US$/oz sold	1,156	1,069	8%	750	54%
Average realised gold price, US$/oz	1,305	1,226	6%	1,336	-2%