March 29, 2017





Serhan Umurhan, Chief Executive Officer of Avesoro Resources, commented: “As highlighted in our Q4 production and operations update, 2016 has been a year of transition for Avesoro Resources, with the arrival of the new management team in Q3 2016 marking the beginning of the turnaround process at New Liberty. Whilst the period was challenging for the Company, the new leadership team achieved significant progress during the latter stages of the financial year, with strong improvements in performance across the entire operation and further operational and financial improvements having taken place during Q1 2017. I am pleased that the implementation of these operational changes has translated into Avesoro publishing our maiden production and cost forecasts. The Company now sits in a position of strength, having reduced and renegotiated its debt facilities.

Whilst today’s financial results in the main reflect the historical difficulties of 2016, the operational improvements achieved during Q4 2016 have provided Avesoro with a solid platform for further material improvements throughout 2017. We are now focussed on continuing to sustainably increase our production profile, whilst reducing all-in-sustaining costs. Avesoro is now strongly positioned for further growth and we are confident that New Liberty will create real, sustained value for our shareholders in the coming years”.

Avesoro Resources Inc. (“Avesoro” or the “Company”), the TSX and AIM listed West African gold producer, announces its audited annual financial results for the year ended 31 December, 2016, and provides an update on operations at its New Liberty Gold Mine (“New Liberty”) in Liberia.

Full Year 2016 Operational Performance

  • Total material movement of 9,962 kt including 996 kt of ore at an average grade of 3.0 g/t;
  • Strip ratio of 9:1 (Waste: Ore);
  • 842 kt tonnes of ore milled at an average feed grade of 2.82 g/t;
  • Gold recovery of 83%;
  • Total gold production of 63,556 ounces, including 13,826 ounces produced prior to the start of commercial production on 1 March 2016, representing a 73% increase on 2015;
  • Cash cost of US$1,775 per ounce sold since the start of commercial production; and
  • All-in sustaining costs (“AISC”) of US$1,930 per ounce sold since the start of commercial production.

Full Year 2016 Financial Performance

  • Revenues of US$63.6 million generated from gold sales of 50,264 ounces since the start of commercial production at an average realised sale price of US$1,266 per ounce;
  • Mining cost of US$5.42 per tonne mined;
  • Processing cost US$28.71 per tonne;
  • Underlying EBITDA loss of US$30.4 million adjusted for non-routine transactions for the year;
  • Capital expenditure of US$27.7 million;
  • Net loss after tax of US$113 million, predominantly from a US$42 million impairment charge on New Liberty due to the operational issues experienced throughout 2016;
  • Year-end principal outstanding on the debt was US$97.6 million, net of US$12.4 million of principal repaid during the year; and
  • Year-end cash balance of US$13.4 million.

Outlook for 2017

  • Gold production guidance for 2017 of 90,000 – 100,000 ounces at a cash cost of US$750 – US$800 per ounce and AISC of US$925 – US$975 per ounce of gold produced;
  • Further reductions in the Company’s mining costs due to the establishment of an on-site explosives production facility and an increase in total material movement;
  • Further reductions in the Company’s operating cost base due to on-going operational improvements and additional insourcing of New Liberty’s supply chain;
  • Optimised life of mine (“LOM”) production schedule due H2 2017; and
  • US$5 million near mine exploration programme set to commence in H2 2017.

2016 Financial Performance

Despite the underwhelming financial performance in 2016, the turnaround process at New Liberty, which is being driven by the new management team since their arrival in July 2016, has resulted in positive improvements in operating performance and a corresponding reduction in unit costs in Q4 2016.

Unit costs of mining for 2016 were negatively impacted by the low productivity experienced by the Company prior to the transition to owner operator mining in Q4 2016. Under owner operator mining, the Company achieved a 76% increase in the total material moved during Q4 2016 compared with Q3 2016. As a result of this improved operating performance and more effective cost control, the Company has seen unit mining costs continue to decrease throughout Q1 2017 towards management’s target levels.

Unit costs for processing during 2016 were negatively impacted by the prolonged shutdown of the processing plant during late Q2 2016 and intermittent stoppages during the early part of Q3 2016 whilst plant optimisation activities were undertaken by the new management team. The Company achieved mill utilisation of 91% in Q4 2016, an increase in performance of 25% when compared with Q3 2016. The appointment of additional experienced operators at New Liberty, combined with the increased throughput and improved stability of the process plant achieved during Q4 2016 has resulted in lower unit operating costs being achieved. The average gold recovery increased to 88% in Q4 2016 compared with 83% for the full year 2016.

Throughout 2016, the Company strengthened its balance sheet with principal debt reducing to US$97.6 million as at 31 December 2016, following the Company’s first principal repayment of US$12.4 million in December 2016. Negotiations with Nedbank Limited and FirstRand Bank Limited (collectively the “Lenders”) to reschedule the Company’s future debt repayments and relax a number of covenants of the Company’s Project Finance Facilities in consideration for guarantees being provided by Mr Mehmet Nazif Gűnal, Non-Executive Chairman of the Company, and Avesoro Holdings Limited Group progressed well during Q4 2016 with Lender credit committee approval of the revised term sheet being obtained in January 2017. The new, substantially improved terms will provide financial stability for the Company whilst management continues to build on the operational improvements made thus far.

Q1 2017 Operational Update

Mining Operations

Under the owner-operator mining model, total material movement at New Liberty has continued to increase throughout early 2017, mainly as a consequence of the improvements in mining productivity, fleet availability and utilisation, with approximately 2.7 million tonnes of material moved during the first two months of 2017. These improvements have resulted in the Company achieving a unit mining cost of less than US$2.50 per tonne mined during the period, compared to the US$4.18 per tonne mined achieved during Q4 of 2016.

However, because of mining strategy in H1 2016, which resulted in insufficient waste stripping and grade control drilling in areas of the minable pits, the ore mined thus far in Q1 2017 has been of a lower grade than was scheduled under the current mine plan. As a result, notwithstanding the improved material movement achieved during the year to date, it is anticipated that gold production for Q1 2017 will be lower than that achieved in Q4 2016. Mined ore grades are forecast to return towards the average reserve grade during early Q2 2017 now that these issues have been resolved.

Management remains confident of achieving the 2017 production guidance of 90,000 – 100,000 ounces of gold, with gold production weighted towards the second half of the year, and the forecast cash costs of US$750 – US$800 per ounce and AISC of US$925 – US$975 per ounce.

Management is currently focussed on addressing the issue of insufficient waste stripping undertaken when compared to the LOM schedule. This shortfall in waste stripping adversely impacted on access for grade control drilling and resulted in the inadequate definition of the boundaries between ore and waste zones within certain areas of the Kinjor and Marvoe pits scheduled to be mined during Q4 2016 and Q1 2017.

Work is currently underway to recover the waste stripping shortfall and a large proportion of the material moved during early 2017 has been waste rock and low grade oxide material, which has been stockpiled for processing later in the LOM schedule. As a direct result of these activities, the Company has opened-up access to additional areas of fresh ore that are scheduled to be mined throughout the forthcoming wet season.

Grade control drilling that has been conducted since November 2016 was undertaken on a tighter spaced grid, allowing improved definition between ore and waste zones within the pit. It is anticipated that the mining of the areas within the pit covered by legacy grade control activities will be completed by late March 2017, at which time the reconciliation between estimated and actual ore grade mined will begin to improve.

Management has also reviewed and revised the blasting procedures undertaken at New Liberty and has commissioned a blast movement monitoring programme with aims to better understand blast heave and to reduce the levels of dilution and ore loss that have historically been experienced. In turn, this will improve the definition of the ore and waste zones within the blasted stock in the pit.

The Company has also purchased an additional blast-hole drill rig which is scheduled to become operational during April 2017 and which will be dedicated to waste blast-hole drilling. A new explosives supplier has also established a production facility at New Liberty and is beginning to provide regular deliveries of explosives for blasting, which will help to improve the quality of the explosives supply and reduce blasting costs. Management has further taken the decision to lease two additional Komatsu PC1250 excavators, a Caterpillar 330 excavator and four Caterpillar 777 100-tonne haul trucks, which, when combined with the increase in mining productivity and material movement now being achieved, has allowed the Company to focus on catching up on the previously postponed waste stripping.

Once the last remaining legacy operating issues have been addressed, and New Liberty has demonstrated a sustained period of operations at the lower operating costs that are now being achieved, management intend to optimise the LOM mining schedule for New Liberty. It is expected that the Company will be able to release this plan and further LOM production guidance during H2 2017.

Processing Operations

Following on from the strong plant performance achieved during Q4 2016, processing operations at New Liberty have continued to improve with plant utilisation for the year to date increasing to 94%. Ore processed during the first two months of 2017 has totalled 181,000 tonnes and gold recovery levels have increased to 90%, whilst processing costs have reduced by more than 20% from the levels experienced in 2016.

Optimisation work at New Liberty continues to progress on schedule with the additional two PSA oxygen plants ordered during December 2016 now on site at New Liberty. Work to install and commission these is currently underway and on track for completion by the end of Q1 2017. Following the commissioning of these units, management expects to see a further increase in gold recovery levels from the processing plant.

Additionally, an order has been placed for another HP500 short head cone crusher, which is expected to be delivered to site during Q3 2017. This addition to the process plant will further improve the mill feed grind size and will also enable a future increase in mill throughput.

Design modifications and expansion works at the Tailings Storage Facility (“TSF”) also continue to progress to budget and schedule, with the Stage 1 downstream embankment raise and surface water management upgrade work underway.

Other Matters

Following the successful transition to owner-operator mining during December 2016, management have focussed upon bringing further outsourced activities within the New Liberty supply chain in-house to reduce the Company’s operating cost base and further optimise operations. During Q1 2017 activities including procurement, logistics, civil construction and camp management have been taken under Company control.


Near-mine exploration will have an increased focus in 2017. A near-mine exploration programme of roughly US$5 million is scheduled to commence in H2 2017 with the objective of adding mineable ounces to the New Liberty LOM from proximate high grade satellite deposits within trucking distance of New Liberty. Other identified targets will also be followed up across the Company’s wider exploration portfolio.

Financial Statements and Management’s Discussion and Analysis

The Financial Statements and the accompanying Management’s Discussion and Analysis (“MD&A”) for the year ended 31 December, 2016 are available for review at the Company’s website,, and on, and should be read in conjunction with this press release.

Contact Information

Avesoro Resources Inc.

Geoff Eyre / Nick Smith

Tel: +44(0) 20 7010 7690


Gordon Poole / Nick Hennis

Tel: +44(0) 20 3757 4980

Numis Securities Limited

(Nominated Adviser and Joint Broker)

John Prior / James Black / Paul Gillam

Tel: +44(0) 20 7260 1000

Hannam & Partners (Advisory) LLP

(Joint Broker)

Rupert Fane / Andrew Chubb / Ingo Hofmaier

Tel: +44(0) 20 7907 8500

About Avesoro Resources Inc.

The Company’s assets include the New Liberty Gold Mine in Liberia (the “New Liberty Gold Mine,” “New Liberty” or the “mine”) which has an estimated proven and probable mineral reserve of 8.5 Mt with 924,000 ounces of gold grading 3.4 g/t and an estimated measured and indicated mineral resource of 9,796 Kt with 1,143,000 ounces of gold grading 3.63 g/t and an estimated inferred mineral resource of 5,730 Kt with 593,000 ounces of gold grading 3.2 g/t. A Definitive Feasibility Study (“DFS”) has been completed, the first gold pour has taken place and commercial production has been declared. The foregoing mineral reserve and mineral resource estimates and additional information in connection therewith are set out in the Company’s technical report dated March 25, 2015 and entitled “New Liberty Gold Project, Bea Mountain Mining Licence Southern Block, Liberia, West Africa, Definitive Project Plan.

The New Liberty Gold Mine is located within the Southern Block of the 100% owned Bea Mountain mining licence. This licence covers 478 km² and has a 25 year, renewable, mineral development agreement. The Bea Mountain mining license also hosts additional gold projects of Ndablama, Gondoja, Weaju and Leopard Rock which are the focus of exploration programs during 2016. Ndablama has an indicated mineral resource of 386,000 ounces of gold grading 1.6 g/t and inferred mineral resource of 515,000 ounces of gold grading 1.7 g/t and Weaju has an inferred mineral resource of 178,000 ounces of gold grading 2.1 g/t. The Yambesei (473 km2), Archaen West (56 km2), Mabong (36.6 km2) and Mafa West (15.6 km2) licences will also be subject to preliminary reconnaissance geological work. The foregoing mineral resource estimates and additional information in connection therewith are set out in the Company’s technical report dated December 1, 2014 and entitled “Ndablama and Weaju Gold Projects, Bea Mountain Mining Licence, Northern Block, Technical Report on Mineral Resources” (“Ndablama and Weaju Technical Report 2014”).

The Company also has a gold exploration permit in Cameroon.

Qualified Persons

The Company’s Qualified Person is Mark J. Pryor, who holds a BSc (Hons) in Geology & Mineralogy from Aberdeen University, United Kingdom and is a Fellow of the Geological Society of London, a Fellow of the Society of Economic Geologists and a registered Professional Natural Scientist (Pr.Sci.Nat) of the South African Council for Natural Scientific Professions. Mark Pryor is an independent technical consultant with over 25 years of extensive global experience in exploration, mining and mine development and is a “Qualified Person” as defined in National Instrument 43 -101 “Standards of Disclosure for Mineral Projects” of the Canadian Securities Administrators and has reviewed and approves this press release.

Forward Looking Statements

Certain information contained in this Announcement constitutes forward looking information. This information may relate to future events or the Company’s future performance. All information other than information of historical fact is forward looking information. The use of any of the words “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should”, “believe”, “predict” and “potential” and similar expressions are intended to identify forward looking information. Specific statements that constitute forward looking information include statements regarding the timing and completion of legal documentation required to amend the loan facilities and to document the guarantees. This forward looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking information. No assurance can be given that this information will prove to be correct and such forward looking information included in this Announcement should not be unduly relied upon. This information speaks only as of the date of this Announcement.

Actual results could differ materially from those anticipated in the forward looking information contained in this news release as a result of the risk factors, including: the risk that the waiver and standstill agreement will terminate; the risk that legal documentation may not be completed as anticipated; risks normally incidental to exploration and development of mineral properties; the inability to obtain required waivers and amendments from the Company’s creditors in respect of its debt repayment obligations and consequential risks of default thereon; risks related to operating in West Africa; health risks associated with the mining workforce in West Africa; risks related to the Company’s title to its mineral properties; adverse changes in commodity prices; risks related to current global financial conditions; the inability of the Company to obtain, maintain, renew and/or extend required licences, permits, authorizations and/or approvals from the appropriate regulatory authorities and other risks relating to the legal and regulatory frameworks in Liberia, including adverse changes in applicable laws; competitive conditions in the mineral exploration and mining industry; risks related to obtaining insurance or adequate levels of insurance for the Company’s operations; risks related to environmental regulations; uncertainties in the interpretation of results from drilling; risks related to the legal systems in Liberia; risks related to the tax residency of the Company; changes in exchange and interest rates; risks related to the activities of artisanal miners; actions of third parties that the Company is reliant upon; lack of availability at a reasonable cost or at all, of plants, equipment or labour, including required equipment, explosives and other necessary material not being delivered in the expected time frame, or at all; the inability to attract and retain key management and personnel; political risks; and future unforeseen liabilities and other factors.

The forward looking information included in this Announcement is expressly qualified by this cautionary statement and is made as of the date of this Announcement. The Company does not undertake any obligation to publicly update or revise any forward looking information except as required by applicable securities laws.