August 26, 2010 / 12:39 PM / 8 years ago

UPDATE 1-Avion Gold breaks even in Q2, misses estimates

* Q2 breakeven/shr vs est EPS $0.02

* Backs 2010 FY production outlook of 75,000-85,000 ounces

* Operating expenses rise about 4-fold

Aug 26 (Reuters) - Canada’s Avion Gold Corp AVR.V broke even on a per-share basis in the second quarter, missing market estimates, hurt by a nearly four-fold increase in operating expenses.

The gold miner — with interests in Tabakoto and Segala projects in Mali, West Africa — backed its 2010 production forecast of 75,000-85,000 ounces, and said it sees cost-per-ounce of $550-$600 for each of the remaining quarters in the year. Net loss for the second quarter narrowed to $208,350 from $580,694 a year ago. But the company broke even on a per share basis in both these periods.

Net loss for the latest second quarter included a stock-based compensation expense of $3.9 million, Avion Gold said in a statement.

Gold revenue rose about five-fold to $25.9 million. It produced 22,222 ounces at $596 per ounce in the second quarter.

Analysts on average expected the company to earn 2 cents on revenue of $26.84 million, according to Thomson Reuters I/B/E/S.

Operating expenses rose to $24.9 million from $6.6 million a year ago, as mining and processing expenses increased almost 300 percent.

Toronto-based Avion Gold shares, which have shed about 7 percent of their value in the first half of the year, closed at 58 Canadian cents Wednesday on the Toronto Venture Exchange. (Reporting by Gowri Jayakumar in Bangalore; Editing by Maju Samuel)

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