Patagonia Gold (LON:PGD) says the performance of its Lomada mine in Argentina has improved significantly after a challenging twelve months in 2015.
In what the Argentina- based miner says was a year of transition for the company, turnover was US$26.1mln (US$35.9mln) as production from the Lomada operation fell to 21,521 ounces (29,347).
Net losses for the year were US$14.4mln (US$6.8mln).
Patagonia intends to close Lomada by the end of May and switch production to a new mine at Cap-Oeste subject to financing.
The plan is to develop a open pit and heap leach pad operation with a 24 month mine life during which time it will assess the potential for underground expansion.
The miner said 2015 had been a poor year at Lomada with equipment delays causing substantial downtime but 2016 had been much better so far.
Production was ahead of target at 9,000 ounces in the first quarter at a cash cost of US$625 per ounce.
The new government in Argentina had also seen the mood improve and the country now offers an excellent opportunity to grow the business in the region added new chief executive Christopher van Tienhoven.
House broker Cantor Fitzgerald expects 2016 also to be a challenge with a new mine build planned and the scheduled closure of Lomada.
But production in 2016 has gone well so far it said and the company has already begun to benefit from the policy changes introduced by the new central government in Argentina.
Chairman and major shareholder, Carlos Miguens, has also reaffirmed his commitment to continue to support the company said Cantor.
“With significant news flow expected around ongoing production, the development of new, lower cost production and ongoing exploration we retain our buy recommendation.”
Shares were down 5% to 1.67p.
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