West African gold exploration and mining company Avocet saw production dive in the first quarter due to availability issues with two of the excavators at its Inata mine.
As a result, revenues in the first quarter of the year fell from $87.8m last year to $60.3m, while sales costs came in at $36m compared to $63.7m the previous year.
Pre-tax profit of $20.8m was up slightly from $20.3m in the first quarter of last year. Earnings before interest, tax, depreciation and amortisation (EBITDA) edged up to $28.1m from $27.2m a year earlier.
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Quarter-on-quarter, gold production fell from 46,102 ounces to 38,296 ounces, while the cash cost of production per ounce, including royalties, rose from $773 to $850. The average realised gold price was unchanged from the preceding quarter at $1,543 an ounce, but was up sharply from the $1,172 an ounce seen in the first quarter of 2011.
Production and cash costs are in line with expectations and full year guidance of 160,000 ounces of production at a cash cost of between $800 - 850 per ounce remains in place, the firm said.
"Concerns about European financial instability, slower than expected US and Chinese economic growth, and higher than expected US unemployment continue to support the current gold price. However, economic data continues to generate mixed views on the gold price in the short to medium term. Furthermore investors appear more cautious about taking long positions in gold due to acute political or financial events which could trigger significant movements in the spot gold price," said Brett Richards, the Chief Executive Officer of Avocet.
The expansion study at Avocet's Inata mine is poodling along nicely, with the company expecting to call the builders in late this year, with production of first gold from the new facilities expected in late 2013.
During the period Avocet's cash fell from $105.2m to $100.5m following a debt repayment of $6.0m, reducing debt levels to $23m.
The share price fell 1.47% to 167p by 13:11.
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