May 9 (Reuters) - Shares of Avion Gold Corp fell to a more than one-and-half-year low after the company halted mill expansion plans at its Tabakoto mine in Mali due to a military coup and said the suspension would affect planned production growth.
The news prompted at least two brokerages to cut their price targets on the stock.
West Africa-focused Avion said if the 4,000-tonne-per-day mill expansion project remains on hold for the rest of the year, production could be cut to 90,000 to 100,000 ounces of gold from 140,000 to 150,000 ounces.
“We believe the ongoing coup in Mali and the potential for a significant reduction in guidance will result in Avion Gold’s valuation gap with peers lingering,” said analyst Tara Hassan of National Bank Financial (NBF).
Avion holds 80 percent of the Tabakoto and Segala gold projects in the West African country.
Miners with significant operations or exploration projects in Mali include Iamgold Corp, Cluff Gold Plc, Randgold Resources Ltd, AngloGold Ashanti Ltd and Gold Fields Ltd.
NBF’s Hassan lowered her price target on the stock to C$2.10 from C$2.50.
BMO Capital Markets also cut its price target to C$1 from C$1.25.
Avion Gold shares, which have fallen nearly 64 percent in the past six months, were down 57 Canadian cents on Wednesday morning on the Toronto Stock Exchange. The stock touched a low of 54 Canadian cents, making it one of the top losers on the exchange. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Sriraj Kalluvila)