Aurora Gold?s shares stumble on downgraded production forecast

Shares in Perth-based gold miner Aurora have slid 13 per cent after the company warned its full year losses would blow out to $24.2 million, Sunday Times reported Thursday.

On Wednesday, Aurora had lost two cents to be trading at 13 cents on turnover of 2.498 million shares.

Production difficulties and a decision to shut its flagship Mt Muro mine in Indonesia early prompted the profit warning, which was issued Tuesday night.

Production performance at Mt Muro deteriorated in the second half of 2001 and the mine will now close in the second quarter of 2002.

Aurora posted a first half after tax loss of $7.98 million and flagged the staged closure of Mt Muro over the next five quarters, with it to wind up in the September quarter of 2002.

It also flagged a stronger operational performance from Mt Muro in the second half of the year as ore throughput and grades improved.

But Aurora said these forecasts had not eventuated.

As a result, the financial forecasts for the whole year have now been downgraded, it said.

Cash on hand at December 31, 2001 was now forecast to be $22 million, down $15.8 million on last year.

Drought-related logistical delays and pit wall failures contributed to the mine's poor performance which is now expected to produce 220,000 gold equivalent ounces for the year, down from 235,485 gold equivalent ounces.

Aurora said it had adopted a shorter mine life projection for the Mt Muro operation in order to help the company generate cash from operations to cover all mine closure costs and in-country overheads.

"However, this decision will result in a significantly higher depreciation charge to the profit and loss statement for both 2001 and 2002," it said.(*)