your initial deposit *subject to change and depends on individual circumstances.
Orosur Mining Inc. is a gold producer and exploration company focused on identifying and developing gold projects in Latin America. The Company is a fully integrated mining company, possessing the skills necessary to explore and develop its discoveries. The Company operates the only producing gold mine in Uruguay (San Gregorio), and...Read more
UPDATE: Orosur Mining forecasts production of up to 68,000 ounces gold for 2013 yearJune 14 2012, 11:32am
---Adds broker comment and share price---
It comes after the firm produced 55,458 ounces in the year to May 31 this year - in line with management's guidance of 55,000 to 57,500 ounces.
In today's production update, chief executive of the firm, David Fowler, told investors: "In accordance with our objective of increasing production we plan to produce 63,000 to 68,000 ounces in fiscal 2013 and 70,000 to 75,000 ounces in fiscal 2014”.
Orosur operates the only producing gold mine in Uruguay at San Gregorio.
In the fourth quarter to May 31 this year, it produced 17,387 ounces of the yellow metal - 27 per cent higher than 13,688 ounces the previous quarter, the company said.
Production in the three months benefited from the planned output from the Arenal Deeps stopes and the start of mining from the relatively high grade ore produced from the Crucera pit - 400km south of San Gregorio.
In the year as a whole, 1.61 million tonnes of ore were processed at a gold grade of 1.15 grams per tonne (g/t) with recovery averaging 92.8 per cent, the firm revealed.
But the firm said during the second half, productivity on development metres has been less than planned, with 3,729 metres completed to May against a plan of 4,161 metres.
This, along with increased costs by the contractor of around US$3 mln increased the cost per metre developed during the 2012 fiscal year, which has increased capex and operating costs, Orosur said.
"This performance is also expected to have an impact on the fiscal year to 31 May 2013 as it will reduce ounces produced from Arenal Deeps and increase costs. As a result Orosur has entered into discussions with the contractor to plan for a transition to owner mining," it said.
In a note, broker Canaccord Genuity said it was "encouraged" by the operational performance of the San Gregorio mine but noted the underground mining costs overruns.
Analyst Dmitry Kalachev said the plan to transition to owner mining should, longer term, help the firm have better cost control at the mine level, but is likely to require additional capital spending in the short term.
However, he believes that the additional capital can be funded from operating cash flow due to the growing production base.
The broker maintains its 'buy' recommendation on the stock and 84 pence a share target price.
"A successful underground ramp up at Arenal Deeps should support the share price today," added the analyst.
"We expect a rerating on the guided production growth, San Gregorio mine life extension and the potential for exploration success at Mahoma, Talca and Pantanillo."
In a separate statement today, the company announced two new appointments at the San Gregorio mine.
Juan Lacerda has been hired as general manager and Alfredo Elizondo as the new mining manager.
As at 11.30 am, Orosur shares stood up 1.23 per cent, at 41 pence each.