Delays hit Troy's gold production

Gold miner Troy Resources has warned of a big hit to its production guidance for 2016 after facing a number of delays at its Karouni operation in Guyana.

Perth-based Troy announced today that drilling activity at the Smarts pit had been slower than anticipated due to a longer-than-expected severe wet season in Guyana, which has required the miner to cordon off sections of the pit.

Troy also faced disruptions to its mill lubrication system in May and June, as well as difficulties with the processing characteristics of clay material, which won’t be resolved until drilling at the Smarts pit hits fresh rock.

This reduced the plant throughput rate during the June quarter, with just 14,553 ounces of gold produced.

“New made-to-order pumps and parts for the worn components in the lubrication unit are currently on track to be delivered in July and preparations have been made by the on-site maintenance team to ensure that the work to refurbish the lubrication system will not result in any significant downtime for the mill,” Troy said.

The company’s June quarter production result contributed to 34,748oz of gold produced in the six months to June.

That places it well below Troy’s target gold production of 100,000oz-120,000oz for CY16; a guidance in which the miner recently flagged it was likely to just make the lower end.

“Whilst every effort will be made to make up for this situation in the second half of the year, the increase in production that had been expected over the course of the June quarter, prior to these disruptions, will now only take effect in the September quarter,” Troy said.

“This is expected to have an impact on guidance for CY16, the extent of which is currently being established through the preparation of revised schedules.”

Troy also announced that following the recent divestment of its stake in the Casposo project in Argentina, its South American chief operating officer, Andrew Storrie, has announced his resignation.

“Andrew joined Troy in 2009 and played a key role in achieving reliable and consistent performance at both of these challenging operations and the board wishes him well in his future endeavours,” it said.

Troy shares closed 0.8 per cent lower at 59.5 cents each.