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Aureus Mining confident of fixing last minute issues at New Liberty

Revenue generated from future gold production should ensure that suppliers continue to be paid and operations can continue
Aureus Mining confident of fixing last minute issues at New Liberty
Aureus is finalising the appointment of a financial advisor to conduct a strategic review

Aureus Mining (LON:AUE, TSE:AUE) has held off declaring commercial production status at its New Liberty project after running into some last minute problems.

The criteria for the declaration of commercial production, as previously communicated to the market, have been reached; however, Aureus has experienced issues during the final phase of commissioning in the gravity and carbon in leach (CIL) circuits of the plant, affecting plant recoveries and resulting in an impact on cash flow.

In view of this, the company has prudently opted not to officially declare commercial production at this point.

Various options are being looked at and systematically implemented in order to improve overall plant performance, and Aureus expects plant performance will improve to design levels by the end of the first quarter.

On the plus side, the comminution circuit, consisting of the primary and secondary crushers and ball mill, is now operating at design throughput capacity.

Gold production achieved during 2015 was 17,172 ounces, against a target of 27,000 ounces, and 3,663 ounces of gold have been produced to date in 2016, Aureus revealed.

Mining operations at New Liberty are progressing, with fresh ore run of mine (ROM) stockpiles currently standing at 83,509 tonnes at a grade of 2.78 grams per tonne (g/t) and oxide and transitional stockpiles of 75,248 tonnes at a grade of 1.35 g/t. 

To date, the New Liberty process plant has processed 386,262 tonnes of ROM fresh sulphide ore and lower grade oxide material resulting in 19 shipments of gold doré from New Liberty for smelting and refining at the MKS PAMP refinery in Switzerland, totaling 20,835 ounces of gold.

The average achieved price for gold sold is US$1,113 per ounce.

Given the impact on cash flow mentioned above, the company is in talks with its bankers about a deferral of the first debt repayment, which is scheduled for the end of this month.

It is anticipated that revenue generated from future gold production should ensure that suppliers continue to be paid and operations can continue at New Liberty, the company said.

"The commissioning phase of New Liberty has brought some unexpected challenges; however, the recent progress being made and improved performance of the process plant are encouraging,” said David Reading, president and chief executive officer of Aureus Mining.  

“I am confident that the various process improvements that our experienced operations team are systematically implementing will continue to improve the overall plant performance towards design specifications,” he added.

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