Rio Alto Mining Limited (CVE:RIO) booked an impressive price gain over the last week all because of an update on operations.
RIO rallied 22% over the last trading week generating out of the ordinary trrading volumes. The last trading session packed 4.72 million which was 5 times the average 906 thousand. The price is advancing in a strange manner though – a lot of profit taking is occurring, forcing long shadows on the candles. That is not how a healthy rally should look, thus it is technically hard to predict the outcome. The increase in trading volume is rather stable, but the last session had some weird volatility by the end of the day, which could lead to morning panic over the comming session.
The price rally, which was concentrated at the end of the week, was caused by an update of gold production on La Arena Gold Oxide mine. Frst quarter ended August 31 the company had pre-commercial gold production of 9.3 thousand ounces. An average 0.55 g/t ore, which is 125% of the ore reserve grade.
Rio Alto sold 6.9 thousand ounces during the quarter averaging $1,554 per ounce.
Their guidance remains optimistic – the company expects gold production to reach 50 to 60 thousand ounces during 2011. By November Rio plans to have production rate of 24 thousand tons per day.
