Orosur Mining dives after warning on profits and job losses

Orosur Mining shares plunged by almost a third on Monday after the South American focused gold producer and explorer warned that for the 2013/14 financial year both production levels and revenue will be lower as a result of a reduced gold price and the deferral of production at the San Gregorio Deeps.

Orosur Mining shares plunged by almost a third on Monday after the South American focused gold producer and explorer warned that for the 2013/14 financial year both production levels and revenue will be lower as a result of a reduced gold price and the deferral of production at the San Gregorio Deeps.

It also said the cost-cutting would result in a 'significant reduction' to the company's workforce.

The deferral comes after the firm said it was reviewing its operations and as such it is not planning to start the pre-strip and development at San Gregorio Deeps.

The firm said that pre-stripping would incur 'significant' costs for an initial period of around nine months before the pit starts to generate net positive cashflow over a six month period, and will wait to review the decision once there is more certainty about the gold price and the group's capital expenditure capacity.

Chairman Tony Shearer said: "Like many gold producers, Orosur is reacting to reduced long term gold price expectations. We are focussing on lowering costs to ensure we maintain an operating margin.

"The decision not to proceed with the San Gregorio Deeps pre-stripping will be reviewed as and when we have greater certainty. Implementing the results of the operational review will be challenging, and we will keep the market informed of progress."

As of April 26th, the group had a cash balance of $3.6m, debt of $9.4m, and $6.5m in undrawn and committed debt facilities.

The share price fell 32.26% to 21p by 16:30 on Monday.

NR

Recommended

The top funds to invest in now
Funds

The top funds to invest in now

As market volatility continues, here are the top funds, stocks and investment trusts investors are putting their money into, according to one investme…
2 Dec 2022
7 sin stocks to buy yielding up to 8%!
Share tips

7 sin stocks to buy yielding up to 8%!

Sin stocks don’t have the best reputation, but when it comes to investment returns, they’re certainly worth a closer look.
2 Dec 2022
Share tips of the week – 2 December
Share tips

Share tips of the week – 2 December

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
2 Dec 2022
3 emerging-market stocks to watch
Share tips

3 emerging-market stocks to watch

The top emerging-market stocks to keep an eye on, according to Union Bancaire Privée’s Eli Koen.
1 Dec 2022

Most Popular

Is it cheaper to leave the heating on low all day?
Personal finance

Is it cheaper to leave the heating on low all day?

The weather is getting colder and energy bills are rising, but is it really cheaper to leave the heating on low all day or should you only turn it on …
1 Dec 2022
Fan heater vs oil heater – which is cheaper?
Personal finance

Fan heater vs oil heater – which is cheaper?

Sales of portable heaters have soared, as households look to cut their energy costs. But which is better: a fan heater or an oil heater? We put them t…
21 Nov 2022
UK house prices fall at their fastest pace since 2020
House prices

UK house prices fall at their fastest pace since 2020

UK house prices fell 1.4% in November, their biggest fall since June 2020.
1 Dec 2022