Beadell Resources has missed even its lowered gold production target for 2018, but shareholders didn’t seem to mind.

The junior producer was hoping to achieve at least 125,000 to 135,000 ounces, but came in 1.3 per cent below the low end of its guidance with 123,336 ounces from the Tucano mine in Brazil.

Beadell, which is in the process of being swallowed up by Canadian miner Great Panther Silver, set an initial target of 145,000 to 155,000 ounces in January.

Despite the misfire, the company’s share price climbed 9.4 per cent to 5.8c on Wednesday morning. By 11.30am AEDT, nearly 1.7 million shares had changed hands.

“2018 was a challenging year for Beadell and our shareholders,” chief Nicole Adshead-Bell said.

Ms Adshead-Bell, who took the reins in July last year, said Beadell’s initial production guidance was reliant on the company switching from an Australian mining services contractor to a Brazilian one and finishing the Tucano plant upgrade by mid-2018.

Beadell Resources (ASX:BDR) shares over the past year.
Beadell Resources (ASX:BDR) shares over the past year.

“I stepped-up into an executive role at Beadell in July 2018 to stabilise a troubled corporate situation as it became clear to the Beadell board that the company would not achieve either of these objectives,” she explained.

“Our guidance was reduced to 125,000-135,000 ounces in August 2018 as we fully comprehended the magnitude of the Tucano plant upgrade delay after taking control from the external contractor managing the project.

“Our material movement was less than planned as we elected to terminate our previous mining contractor rather than accept their unfavourable terms for a cross-over period as our new mining contractor mobilised to site.”

Both milestones have now been achieved, with the plant upgrade completed in November and Beadell signing on a new Brazilian contractor — a move that is expected to deliver $US100m in savings over the life of the operation.

But Ms Adshead-Bell says the deferral of an estimated $US24 to $US36m in revenue in 2018, due to the reduced guidance, has considerably decreased Beadell’s balance sheet health and increased its risk in the first half of 2019.

“Weak precious metals sector sentiment, and a soft capital-raising environment, restricted our ability to source capital other than on unacceptably punitive terms, particularly as we have justifiably been in the penalty box due to operational underperformance,” she said.

“Ironically, our valuation declined as we systematically de-risked Tucano.”

Hence why Beadell decided a tie-up with Great Panther was its best option.

After the September announcement of the deal, which values Beadell shares at 8.6c – a 51 per cent premium at the time it was announced – the company’s share price jumped 25 per cent.