Avion misses its Q3 gold production target

Avion Gold (AVR-T) has missed its third quarter gold production by 17% due to heavy rains and delays for equipment parts.

During the dismal period, the company produced 21,687 oz. gold from its Tabakoto and Segala projects in Mali, instead of the expected 26,100 oz.

The West Africa-focused miner points its finger to the delays in receiving parts and supplies from the port of Dakar, Senegal, causing the company to reduce its mining fleet and process more lower-grade ore.

“Closure of the main shipping port in the Ivory Coast for several months meant that most shipments to West Africa were diverted to the port of Dakar, Senegal, which is where Avion transports all of its sea containers,” explained the company’s COO, Andrew Bradfield, in a press release. “This caused substantial delays in moving supplies through the port of Dakar due to congestion. As a result, many spare parts for Avion’s fleet of mining equipment did not arrive as planned, and equipment availabilities were lower than anticipated.”

Avion also adds its access to the higher-grade ore from the Dioulafoundou pit was restricted due to the heavy rains in August.

Amid the dreary results, the company says it experienced a record number of tonnes milled for a quarter. It churned through 227,900 tonnes grading 3.12 grams gold per tonne, with a mill recovery of 95.4%.

It also notes it is on track to reach and possibly exceed the targeted production for the last quarter of the year. However, due to the underperforming third quarter, the company has slightly lowered its yearly guidance of 100,000 oz. to between 95, 000 and 100,000 oz.

But a ray of light during the bleak news released on Oct. 7 was that the company is ahead of plan at building the underground mine at Tabakoto and expects production stoping early next year. It also says the underground portal at Segala is nearly complete, and that the plant expansion should be done by the first quarter of 2012.

The expansion will add another 2,000 to 4,000 tonnes a day to the operation.

Avion expects production for next year to total 160,000 oz. gold.

Following the production news, investors pushed the company’s shares down 5% to $1.97, with 3.2 million shares changing hands.