Sino Gold Ltd on Monday cut its 2008 production forecast for China's second-largest gold mine by about 20,000 ounces because of power supply disruptions earlier this year and the mining of less rich ores.

Sino Gold's Australian shares dropped 10.8 percent to A$5.80 after it said the Jinfeng mine in Guizhou province should yield between 150,000 and 160,000 ounces, a reduction of 20,000 ounces on its previous estimate.

The power supply issues and lower than forecast ore gradings at the mine also resulted in a drop in production to 30,976 ounces during the three months to March 31, it said.

This compares to 32,186 ounces in the previous quarter. Sino has forecast gold output from Jinfeng at between 34,000 to 38,000 ounces during the three months to June 30.

Severe winter ice storms curtailed coal deliveries to power stations across southern China in January and February, forcing metals producers across China to cut output.

Sino Gold reported a A$24.9 million loss in 2007, following A$14.5 million in finance costs, but expects to show a profit in 2008, its first year of full production from Jinfeng.