Etruscan gold production falls short

Vancouver – Beset by electrification delays and diminished blasting capacity Etruscan Resources‘ (EET-T, ETRUF-O) gold production is falling well below expectations for 2009.

Etruscan had set its sights on churning out between 80,000 and 90,000 oz. gold in 2009; but so far in the first two quarters of the year it has only managed to produce 28,205 oz. gold at its Youga gold mine in Burkina Faso.

Etruscan blamed lackluster production on delayed electrification of the Youga mine, which has forced it to rely on its on-site power generators, and reduced availability of its contractor’s drill rigs for blasting.

Etruscan is connecting Youga to grid-power from neighbouring Ghana and now expects to plug it in sometime in June. While Etruscan has been waiting for construction to finish it has relied on six diesel generators – what were to be backups to electrification.

Unexpected demand on the generators has meant that a number of them have had to go offline for maintenance and in turn that led to diminished production at Youga.

In response Etruscan has boosted generator capacity by adding three new 1 megawatt generators to its six existing 1.3 megawatt generators.

As for slower than expected blasting, that has impinged on Etruscan’s access to higher grade ore blocks at Youga. That combined with what Etruscan calls poor blasting quality led to gold grades short of forecasts.

In the first six months of fiscal 2009 Etruscan saw throughput of 415,050 grading 2.48 grams gold per tonne.

Etruscan says while blasting capacity improved in the second quarter it was still 32% below scheduled levels.

To address poor production performance Etruscan has appointed Stephen Stine, a veteran mine engineer and co-founder of Alamos Gold where he helped oversee development of the Mulatos gold mine in Mexico, as its Burkina Faso-based chief operating officer.

Stine’s task is to bring gold production up to 7,000 oz. per month.

News of disappointing gold production, however, did not greatly affect Etruscan’s share price. It shed 1¢ to close at 25¢.

Etruscan has 159.4 million shares outstanding.