GMA Resources PLC (AIM: GMA) said it is taking significant measures to tackle problems that continue to affect operations at the Amesmessa gold mine in Algeria.
The mine produced 2,503 ounces of gold and 520 ounces of silver in June, which was below the monthly target due to a mechanical failure of tertiary crushers and inadequate supply of spare parts, particularly for the tertiary crushers.
GMA holds significant contingency stocks of mining consumables, however, it is not feasible for these stocks to include every piece of equipment critical to mining operations, it said in a statement.
Due to the increasingly high volumes of activity in Algerian ports and bureaucratic obstacles for international shipments, the company has experienced delays in receiving critical supplies.
To resolve these structural problems, GMA is taking significant measures, including a move to roll-on/roll-off shipping, where a truck originating in Algeria will collect goods from Europe and then return to Algeria by daily ferry from Marseilles. GMA has also recently appointed a senior executive as country manager, with specific responsibilities to improve the efficiency of supply operations.
Regarding Amesmessa output, the mine produced a total of 18,637 ounces of gold in the first half of 2009 compared with 10,620 ounces in the second half of 2008. Approximately 58,000 ounces of gold remained on the pads as of June 30. Gold sales for the first half of the year averaged US$914.29 per ounce, against a budgeted price of US$802 per ounce.
Douglas Perkins, Chief Executive of GMA, commented: “As previously announced, we will continue to report production on a monthly basis during Q3 2009 to keep shareholders informed of production levels on a timely basis. We are disappointed that June production falls short of our 2009 plan, particularly after record production in May. We are taking significant steps to improve efficiencies within our supply chain.”www.proactiveinvestors.com
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