Euronext-listed gold producer Akobo Minerals’ gold production for March and April amounted to 1 kg at an average grade of about 3 g/t, which is below the company’s expectations, the company said on May 5.

In an operational update for April, Akobo said these underwhelming production results have caused near-term liquidity issues for the company, putting it on shaky ground as a going concern.

To address this, Akobo said it was preparing to engage with existing shareholders to secure short-term funding. The evaluation of available alternatives towards securing appropriate financial solutions long-term was continuing, it explained.

The company’s Segele mine, in Ethiopia, is currently operating with three active headings for ore extraction, most of which are expected to access high-grade zones. However, increasing daily tonnage has proven more challenging than expected owing to constraints within the current tunnel infrastructure.

In the short term, Akobo said it was working to improve production levels from existing tunnels through the introduction of additional blasting shifts and by optimising underground cycle times.

It said that these tonnage constraints were expected to be resolved through the planned commissioning of a vertical shaft, which would improve access and provide greater operational flexibility.

Akobo’s total cumulative gold production has now reached 19.6 kg, with an average grade across all mined material remaining at nearly 20 g/t, which places Segele among the highest-grade underground gold operations globally.

The Segele deposit is characterised by a “nuggety nature”, the company said, resulting in significant grade variability, which remains a key factor affecting the short-term predictability of gold output.

In parallel with operational improvements, and as part of evaluating available alternatives, Akobo said it had initiated discussions with providers of non-equity financial instruments.

These efforts are focused on securing nondilutive financing, such as offtake and streaming agreements, which provide upfront payments in exchange for future gold deliveries at a discount to prevailing market prices.

These initiatives are being pursued in close collaboration with management and business consulting conglomerate Sutton Global and the company’s lender Monetary Metals.

Other funding alternatives, such as a standard equity raise or potential strategic partnership, will also be evaluated depending on the attractiveness of available solutions.