Avesoro Resources Q2 2019 Production Update

TSX: ASO
AIM: ASO

TORONTO, July 10, 2019 /CNW/ - Avesoro Resources Inc. ("Avesoro" or the "Company"), the TSX and AIM listed West African gold producer announces its preliminary production results for the quarter ended June 30, 2019 ("Q2" or the "Quarter") from its New Liberty Gold Mine ("New Liberty") in Liberia, and Youga Gold Mine ("Youga") in Burkina Faso.

Operational Highlights

• Consolidated gold production of 34,338 ounces in the Quarter, bringing H1 2019 gold production to 79,435 ounces;
• New Liberty gold production of 18,822 ounces in the Quarter, a 27% decrease on Q1 2019;
• Youga gold production of 15,516 ounces in the Quarter, a 19% decrease on Q1 2019;
• Total material movement of 12.3Mt in the Quarter, a 7% decrease on Q1 2019, consisting of 471kt of ore and 11.8Mt of waste material;
• Completed the operational aspects of the transition to contractor open pit mining at both Youga and New Liberty.

Serhan Umurhan, Chief Executive Officer of Avesoro, commented: "With the operational aspects of the transition to contractor mining at both Youga and New Liberty now in place, I am confident that the challenges experienced during Q2 have been overcome and that total material movement and gold production will increase in the second half of the year. As such, I am pleased to reiterate our revised 2019 production guidance of 180,000 to 200,000 ounces of gold.

At Youga, the temporary production stoppage caused by the transition to contractor mining in June, and the on-going lower than expected grade from the Gassore pit resulted in mill feed grade deteriorating 23% to 1.5 g/t Au in the Quarter compared with Q1 2019, leading to gold production of 15.5koz during the Quarter. In order to remedy the grade issue, the Company engaged technical experts CSA Global to undertake an operational review of the mining and grade control practices at Youga. In response to CSA's recommendations, we have employed additional technical staff to manage mining production and grade control at Youga and I am confident we will see a material improvement in the situation as a result.

At New Liberty, Q2 gold production of 18.8koz was temporarily adversely impacted by the transition to contractor mining in April. I am pleased to report that production performance during May and June returned to our budgeted levels and we are now well prepared for the onset of the wet season during the third quarter of 2019."

Table 1: Preliminary Group Production Results

Parameter	Unit	Q2 2019	Q1 2019	Variance	Q2 2018	Variance	H1 2019
Ore Mined	kt	471	609	-23%	596	-21%	1,080
Waste Mined	kt	11,818	12,592	-6%	9,242	28%	24,410
Total Material Movement	kt	12,289	13,201	-7%	9,838	25%	25,490
Ore Processed	kt	600	628	-4%	659	-9%	1,228
Gold Production	Ounces	34,338	45,098	-24%	60,231	-43%	79,435

New Liberty
As previously reported in the Company's June 10, 2019 announcement, during April a number of staff in the mining and heavy mining equipment ("HME") maintenance teams chose to resign rather than accept the alternate employment terms being offered by the new mining contractor, Demir Kose Insaat Turizm Tasimacilik Ithalat Ihracat Sanayi Ticeret AS ("DK"). As a consequence, mining productivity was hampered during April and early May 2019, resulting in total material movement during the Quarter reducing by 7% versus Q1 2019 to 7.85Mt. Despite the reduction in material movement, operations remained focused on waste stripping to ensure access to adequate ore faces throughout the upcoming wet season. The strip ratio increased by 15% to 29.5:1 and total ore volumes mined decreased by 19% to 257kt.

As a consequence of the lower volumes of ore mined during the Quarter combined with a scheduled decrease of mined ore grade to 2.50 g/t Au, low grade stockpile material had to be blended into the mill feed, resulting in a mill feed grade for the Quarter of 2.36 g/t Au. Process plant throughput also reduced by 13% to 268kt, due to a shortfall of ROM ore, resulting in gold production of 18,882 ounces, a 27% decrease on production achieved during Q1 2019.

In June, additional new HME, consisting of 12 dump trucks, six excavators and five loaders were delivered to site by DK; this is expected to increase material movement from Q3 2019 onwards.

During the Quarter, construction continued on Phase 2 of the Tailings Storage Facility ("TSF") development, with the remaining construction expected to be completed during Q3 2019.

Table 2: New Liberty Performance Metrics

Parameter	Unit	Q2 2019	Q1 2019	Variance	Q2 2018	Variance
Ore Mined	kt	257	317	-19%	375	-31%
Mined grade	g/t	2.50	3.26	-23%	2.70	-7%
Waste Mined	kt	7,593	8,120	-6%	5,312	43%
Strip Ratio	Waste:Ore	29.5	25.6	15%	14.2	109%
Total Material Movement	kt	7,850	8,437	-7%	5,688	38%
Feed grade	g/t	2.36	3.00	-21%	2.81	-16%
Ore Processed	kt	268	308	-13%	352	-24%
Recovery	%	92%	90%	2%	87%	5%
Gold Production	Ounces	18,822	25,855	-27%	29,808	-37%

Youga

Due to the previously reported stoppage in mining activities during June 2019 following a transition to contractor mining, total material movement was 4,439kt in Q2, a decrease of 7% on the previous quarter. Waste mined decreased by 6% to 4,225kt whilst ore mined decreased by 27% to 214kt, resulting in a waste to ore stripping ratio of 19.8:1. 

During the period, mining focused predominantly on the Gassore pit adjacent to the Youga process plant, where mined grades continued to be below forecast. Following a review of both grade control and mining practices undertaken by CSA Global the Company made the decision to bolster its on-site technical team by hiring of additional technical staff to manage mining production and grade control.

Due to the temporary stoppage in mining activities some emergency low grade ore stockpiles were blended into the plant feed during June, reducing overall Q2 run of mill grade to 1.59 g/t Au, a reduction of 23% versus Q1 2019. An increase in plant throughout of 4% to 332kt during the Quarter helped to offset the grade impact however gold production reduced by 19% versus Q1 2019 levels to 15,516 ounces.

Table 3: Youga Performance Metrics

Parameter	Unit	Q2 2019	Q1 2019	Variance	Q2 2018	Variance
Ore Mined	kt	214	292	-27%	221	-3%
Mined grade	g/t	2.24	2.67	-16%	3.59	-38%
Waste Mined	kt	4,225	4,472	-6%	3,930	8%
Strip Ratio	Waste:Ore	19.8	15.3	29%	17.8	11%
Total Material Movement	kt	4,439	4,764	-7%	4,150	7%
Feed grade	g/t	1.59	2.07	-23%	3.44	-54%
Ore Processed	kt	332	320	4%	307	8%
Recovery	%	91%	90%	1%	90%	2%
Gold Production	Ounces	15,516	19,243	-19%	30,423	-49%

Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

About Avesoro Resources Inc.

Avesoro Resources is a West Africa focused gold producer and development company that operates two gold mines across West Africa and is listed on the Toronto Stock Exchange ("TSX") and the AIM market operated by the London Stock Exchange ("AIM"). The Company's assets include the New Liberty Gold Mine in Liberia ("New Liberty") and the Youga Gold Mine in Burkina Faso ("Youga").

New Liberty has an estimated Proven and Probable Mineral Reserve of 17Mt with 1,365,000 ounces of gold grading 2.49g/t and an estimated Measured and Indicated Mineral Resource of 20.47Mt with 1,748,200 ounces of gold grading 2.66g/t and an estimated Inferred Mineral Resource of 3.0Mt with 271,000 ounces of gold grading 2.8g/t. A supporting Technical Report summarising the PFS, prepared in accordance with CIM guidelines, is set out in an NI 43-101 compliant Technical Report dated January 31, 2019 and entitled "NI 43-101 Pre-Feasibility Report, Mineral Resource and Mineral Reserve Update for the New Liberty Gold Mine, Liberia" and is available on SEDAR at www.sedar.com. 

Youga has an estimated Proven and Probable Mineral Reserve of 14.7Mt with 814,900 ounces of gold grading 1.72g/t and a combined estimated Measured and Indicated Mineral Resource of 22.16Mt with 1,189,100 ounces of gold grading 1.67g/t and an Inferred Mineral Resource of 7.6Mt with 377,000 ounces of gold grading 1.5g/t. A Technical Report dated 20 June 2019 prepared in accordance with the requirements of National Instrument 43-101 and entitled " NI 43-101 Technical Report Mineral Resource and Mineral Reserve Update for the Youga Gold Mine, Burkina Faso" is available on SEDAR at www.sedar.com and on the Company's corporate website www.avesoro.com. 

For more information, please visit www.avesoro.com

Qualified Persons

The Company's Qualified Person is Mark J. Pryor, who holds a BSc (Hons) in Geology & Mineralogy from Aberdeen University, United Kingdom and is a Fellow of the Geological Society of London, a Fellow of the Society of Economic Geologists and a registered Professional Natural Scientist (Pr. Sci.Nat) of the South African Council for Natural Scientific Professions. Mark Pryor is an independent technical consultant with over 25 years of global experience in exploration, mining and mine development and is a "Qualified Person" as defined in National Instrument 43 -101 "Standards of Disclosure for Mineral Projects" of the Canadian Securities Administrators and has reviewed and approved this press release. Mr. Pryor has verified the underlying technical data disclosed in this press release.

Forward Looking Statements

Certain information contained in this press release constitutes forward looking information or forward-looking statements within the meaning of applicable securities laws. This information or statements may relate to future events, facts, or circumstances or the Company's future financial or operating performance or other future events or circumstances. All information other than historical fact is forward looking information and involves known and unknown risks, uncertainties and other factors which may cause the actual results or performance to be materially different from any future results, performance, events or circumstances expressed or implied by such forward-looking statements or information. Such statements can be identified by the use of words such as "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "would", "project", "should", "believe", "target", "predict" and "potential". No assurance can be given that this information will prove to be correct and such forward looking information included in this press release should not be unduly relied upon. Forward looking information and statements speak only as of the date of this press release.

Forward looking statements or information in this press release include statements regarding the 2019 production guidance of 180,000 to 200,000 ounces of gold.

In making the forward looking information or statements contained in this press release, assumptions have been made regarding, among other things: general business, economic and mining industry conditions; interest rates and foreign exchange rates; the continuing accuracy of Mineral Resource and Reserve estimates; geological and metallurgical conditions (including with respect to the size, grade and recoverability of Mineral Resources and Reserves) and cost estimates on which the Mineral Resource and Reserve estimates are based; the supply and demand for commodities and precious and base metals and the level and volatility of the prices of gold; market competition; the ability of the Company to raise sufficient funds from capital markets and/or debt to meet its future obligations and planned activities and that unforeseen events do not impact the ability of the Company to use existing funds to fund future plans and projects as currently contemplated; the stability and predictability of the political environments and legal and regulatory frameworks including with respect to, among other things, the ability of the Company to obtain, maintain, renew and/or extend required permits, licences, authorizations and/or approvals from the appropriate regulatory authorities; that contractual counterparties perform as agreed; and the ability of the Company to continue to obtain and retain qualified staff (including employees and contractors) and equipment in a timely and cost-efficient manner to meet its demand.

Actual results could differ materially from those anticipated in the forward-looking information or statements contained in this press release as a result of risks and uncertainties (both foreseen and unforeseen) and should not be read as guarantees of future performance or results and will not necessarily be accurate indicators of whether or not such results will be achieved. These risks and uncertainties include the risks normally incidental to exploration and development of mineral projects and the conduct of mining operations (including exploration failure, cost overruns or increases, and operational difficulties resulting from plant or equipment failure, among others); the inability of the Company to obtain required financing when needed and/or on acceptable terms or at all; risks related to operating in West Africa, including potentially more limited infrastructure and/or less developed legal and regulatory regimes; health risks associated with the mining workforce in West Africa; risks related to the Company's title to its mineral properties; the risk of adverse changes in commodity prices; the risk that the Company's exploration for and development of mineral deposits may not be successful; the inability of the Company to obtain, maintain, renew and/or extend required licences, permits, authorizations and/or approvals from the appropriate regulatory authorities and other risks relating to the legal and regulatory frameworks in jurisdictions where the Company operates, including adverse or arbitrary changes in applicable laws or regulations or in their enforcement; competitive conditions in the mineral exploration and mining industry; risks related to obtaining insurance or adequate levels of insurance for the Company's operations; that Mineral Resource and Reserve estimates are only estimates and actual metal produced may be less than estimated in a Mineral Resource or Reserve estimate; the risk that the Company will be unable to delineate additional Mineral Resources; risks related to environmental regulations and cost of compliance, as well as costs associated with possible breaches of such regulations; uncertainties in the interpretation of results from drilling; risks related to the tax residency of the Company; the possibility that future exploration, development or mining results will not be consistent with expectations; the risk of delays in construction resulting from, among others, the failure to obtain materials in a timely manner or on a delayed schedule; inflation pressures which may increase the cost of production or of consumables beyond what is estimated in studies and forecasts; changes in exchange and interest rates; risks related to the activities of artisanal miners, whose activities could delay or hinder exploration or mining operations; the risk that third parties to contracts may not perform as contracted or may breach their agreements; the risk that plant, equipment or labour may not be available at a reasonable cost or at all, or cease to be available or resign, or in the case of labour, may undertake strike or other labour actions; the inability to attract and retain key management and personnel; and the risk of political uncertainty, terrorism, civil strife, or war in the jurisdictions in which the Company operates, or in neighbouring jurisdictions which could impact on the Company's exploration, development and operating activities.

Although the forward-looking statements contained in this press release are based upon what management believes are reasonable assumptions, the Company cannot provide assurance that actual results or performance will be consistent with these forward-looking statements. The forward looking information and statements included in this press release are expressly qualified by this cautionary statement and are made only as of the date of this press release. The Company does not undertake any obligation to publicly update or revise any forward looking information except as required by applicable securities laws.

SOURCE Avesoro Resources Inc.

Contact Information: Avesoro Resources Inc., Geoff Eyre / Nick Smith, Tel: [phone]; Camarco, (IR / Financial PR), Gordon Poole / Nick Hennis, Tel: [phone]; Berenberg, (Joint Broker), Matthew Armitt / Detlir Elezi, Tel: [phone]; finnCap, (Nominated Adviser and Joint Broker), Christopher Raggett / Scott Mathieson / Camille Gochez, Tel: [phone]; Hannam & Partners, (Joint Broker), Rupert Fane / Ingo Hofmaier / Ernest Bell, Tel: [phone]

Related Links

www.avesoro.com