Clouds rain red for Akrokeri-Ashanti

Unable to mine waterlogged, higher-grade material at its Bonte alluvial gold mine in Ghana, Akrokeri-Ashanti Gold Mines (YAG-V) more than doubled its third-quarter loss to US$1.6 million during the three months ended Sept. 30.

The loss translates into US4 per share, and compares with a year-ago net loss of US$697,027 (or 1.7 per share) Revenues between the two periods slipped to US$3.2 million from US$4.4 million. Cash consumed by operations was S$$738,371.

For the first nine months of year, Akrokeri-Ashanti’s net loss came to US$3.4 million (8.4 a share) on revenue of US$10.8 million, compared with year-ago net income US$183,274 (0.4 per share) on US$14.3 million. Operations ate through US$331,785.

During the third quarter, Bonte poured 10,127 oz. of gold, down 36% from the previous year. The drop is attributed to the processing of lower-grade terrace ores. Production also suffered as the processing plant went through commissioning. The lower production levels sent average mine cash costs soaring to US$321 per oz., up from US$206 per oz. a year earlier.

The company realized an average of US$315 for its quarterly production, up from US$278 per oz. during the corresponding period of 2001.

During the quarter, Akrokeri-Ashanti completed installation and optimization of Bonte’s process plant upgrades. The plant is currently running at a recovery rate of more than 90%. The new Knelson recovery system is trapping the fine-grained, flat gold particles the old system was unable to capture.

In early November, a new reinforced primary screen deck was installed bringing the process rate back to 350 cubic metres per hour.

Akrokeri-Ashanti expects production to improve as it resumes mining the higher-grade ores in the lower floodplain once the dry season begins in December.

At the end of September, the company’s accounts payable and accrued liabilities rose to US$5.45 million from US$3.5 million at the end of 2001.

In late September, the company announced that it replaced an expired option deal for the 18-sq.-km Antonieta gold properties in the Puno region of southeastern Peru.

Under the new deal, Akrokeri-Ashanti can acquire a 100% interest in the properties after a phased exploration and mine development program. The company would then grant the vendor, Compania Minera de Sandia, a 4% to 9% gross production royalty that varies with the price of gold.

The property is home to a large gold bearing, unlithified conglomeratic paleoplacer deposit.

The old option agreement expired in January.