Austral Gold Sells Off Investments To Cover Production Shortfall

Austral Gold (TSXV: AGLD) is reporting this morning that it was forced to sell a portion of its minority equity investments in public companies as a means of covering a cash shortfall related to production issues.

The sale is a result of the failure of high-pressure grinding roll equipment at Austral’s Heap Reprocessing Project at the Guanaco/Amancaya mine complex in Chile. While repairs were expected to be completed in May, delays have now pushed the estimated completion date to near the end of June.

As a result of the delay, estimated production is now expected to be between 18,000 to 20,000 gold equivalent ounces, down from the previously guided 24,000 to 28,000 ounces.

It is unclear specifically what minority interests Austral sold in an effort to fund the shortfall, although it is known that a portion involved Unico Silver and Pampa Metals. As of the end of the first quarter, the company held equity interests in four entities, including Unico Silver and Pampa Metals.

Post quarter end, the company also obtained interests in Revival Gold following a transaction involving Ensign Minerals, and obtained a further interest in Unico Silver following the sale of Sierra Blanca S.A.

Austral is said to also be considering the sale of non-core assets to cover the funding shortfall.

Austral Gold last traded at $0.02 on the TSX Venture.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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