Earlier this year, Wishbone inked a 30-year deal with SION Honduras, which has an agreement with the Honduran government to expand the mining industry there.
The venture will provide equipment and expertise to small mines in Honduras to enable them to increase production. In return, the mines will supply Wishbone's trading subsidiary Black Sand FZE with all the output at preferential prices.
However, “the worst hurricane season on record” has forced gold mines in the region to shut down their operations and delayed the final commissioning of the plant.
Wishbone said today that the project will be operational as soon as weather conditions improve but added that this will probably result in a three-month delay in going into production.
Honduran JV to provide higher margins
"It's a promising start for the roll out of Wishbone Gold's strategy and we are looking forward to having the Honduras model operational,” said chief executive Richard Poulden.
“This model will enable smaller miners to provide a long term, stable and profitable source of gold that can be replicated easily both within Honduras and globally.
“The supply agreements produce much higher margins than general trading which will provide higher average margins overall.”
Poulden also revealed that Wishbone is in discussions set up similar programs with two African nations.
For the six months ended 30 June, Wishbone turned over £3.98mln (H1 2016: £0) and generated a gross profit of £0.02mln (H1 2016: £0).
The net loss widened slightly to £0.33mln (H1 2016: £0.19mln) with funds being diverted to help finance its venture in Honduras.
Wishbone ended the half with a net cash position of US$2.6mln compared to US$1.4mln a year earlier.
Shares were down 0.08p or 10.7% to 0.62p.
--Updates for share price--