Toronto-based Orvana Minerals Corp (TSE:ORV) said that an alternative production schedule at its main El Valle-Boinas/Carles (OTCPK:EVBC) mine in northern Spain as a result of a hoist incident reported last month has allowed it to maintain its output forecast for the year following record production in its fiscal third quarter.
For the three months to June 30, the company reported a record 18,500 ounces of gold production at the Spanish gold-copper mine, as well as more than 1.9 million pounds of copper and 58,800 ounces of silver.
This compares with total production, which includes output from both the EVBC and its UMZ mine in Bolivia, of 18,144 ounces of gold in the previous second quarter, as well as 3.9 milion pounds of copper and 191,374 ounces of silver.
In June alone, the EVBC mine generated 5,890 ounces of gold, over 687,000 pounds of copper and 21,793 ounces of silver, according to Orvana's statement released Monday.
The company said it completed an alternative production schedule at the Spanish property in response to a hoist incident last month, with the new plan including the use of ramp haulage for Boinas skarns -- the methodology used prior to the hoist system becoming operational -- as well as greater oxide mining at the Boinas mine and an increase in overall production at the Carles mine.
The revised schedule will allow the miner to maintain its full year output guidance of 75,000 ounces of gold from its EVBC and UMZ mines.
"We are pleased with the revised production schedule from EVBC using ramp haulage and we fully expect to meet our overall fiscal 2013 production guidance," said interim president and CEO of Orvana, Michael Winship, in the release Monday.
The company said that government authorities have released the hoist site at Boinas, with Orvana tasked with developing a detailed recovery plan. Insurance adjusters have visited the site, and an internal investigation is ongoing.
In late June, Orvana reported that a fully loaded skip overran the safety interlocks in the headframe, and that the hoisting rope broke, with the skip dropping to shaft bottom damaging the loading pocket.
International shaft and hoist expert contractors and consultants have been to the site as part of the internal investigation, Orvana said, who are expected to provide recommendations on the shaft recovery.
The company expects it will take about four to six months to repair the shaft at an estimated cost of $2.5 to $3.5 million. It says it does not have any reason to believe that the costs will not be covered by insurance.
Orvana remains focused on increasing its cash flow and production and is reviewing ways to keep operating and capital costs down given the recent metal price volatility. It also recently secured the Safe Dams permit for its Copperwood copper project in Michigan, with a feasibility study underway at the property.
Shares of the company advanced two pennies in early deals Monday, to 41.5 cents.
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