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
Funds

The top funds to invest in

Investors continued to the passive preference throughout May, while high-yields were also sought. We look at the top funds, stocks and trusts that inv…
5 Jun 2023
The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
20 Apr 2023
Best junior stocks and shares ISA platforms
Isas

Best junior stocks and shares ISA platforms

A junior stocks and shares ISA is a great way to save for your child tax-efficiently. But it can be confusing deciding which investment platform to ch…
28 Mar 2023
The outlook for Shell shares is mixed, despite bumper profits
Energy stocks

The outlook for Shell shares is mixed, despite bumper profits

With profits surging, it looks as if Shell is on a roll, but the company’s growth from here is hard to see as Rupert Hargreaves explains.
6 Feb 2023

Most Popular

How much will it cost you to retire early?
Pensions

How much will it cost you to retire early?

The pre-state pension income gap means couples may need an extra £136,000 if they want to retire at 60 – can you afford to retire early?
6 Jun 2023
Best easy access savings accounts – June 2023
Savings

Best easy access savings accounts – June 2023

Rising interest rates have boosted the returns on instant-access savings accounts and we're seeing some of the highest rates seen in years. We look at…
6 Jun 2023
Best debit and credit cards to use while travelling abroad
Personal finance

Best debit and credit cards to use while travelling abroad

If you’re going on holiday or travel abroad regularly, it’s worth knowing what the best card is to avoid hefty fees. We weigh up the charges and any p…
6 Jun 2023