Photo by: Bloomberg
PERTH (miningweekly.com) – Gold miner Besra on Friday downwardly revised its full-year production expectations at its Vietnam operations.
The ASX-, TSX- and Frankfurt-listed company now expected to produce between 31 000 oz and 34 000 oz of gold during the full year, instead of the previous estimate of between 40 000 oz and 45 000 oz.
The company’s Vietnam operations have faced significant challenges, including a disputed export tax assessment at its Phuoc Son plant, and suspended operations at its Bong Mieu mine owing to severe weather conditions.
CEO John Seton said on Friday that the third quarter, which ended in March, was also affected by two weeks of lost production, owing to the Vietnamese New Year.
“On more than one occasion, we have been asked whether it would not have been better to close up shop in Vietnam until the situation improved, but we made the decision that it was better to maintain a production base, albeit a small one,” Seton said.
“Not producing gold and maintaining assets would have had its own costs, which we would have had difficulty funding and would inevitably have led to the loss of those assets,” he added.
During the three months to March, Besra produced 3 943 oz of gold, compared with the 13 589 oz produced in the previous corresponding period.
The company on Friday warned shareholders that if it did not resume profitable operations, dispose of its assets, or gain access to public debt or equity, the company could likely go under as its current liabilities exceeded its assets by more than A$43-million.
During the three months to March, the group incurred a net loss of more than A$8.5-million, while this widened to A$47.3-million for the nine months ending March.
Seton said, however, that the quarter had not been without its highlights, pointing to a formal notification from the Vietnamese Finance Ministry that export tax assessments totalling $12-million against Bong Mieu Gold Mining Company and Phuoc Son Gold Company had been repealed in April.
“We’ve been able to raise some funds to maintain operations, had our export licence renewed, and of course secured the repeal of the export tax assessment. We are also progressing with our insurance and tax relief claims at Bong Mieu and Phuoc Son damage and business interruption,” he added.
Seton also noted that the company was in advanced negotiations on a range of capital raising options, both to ease the current liquidity issues and to fund its Bau project, in Malaysia.
“Bau continues to be the shining light at the end of the tunnel, and we are very hopeful of making an announcement soon on the start of development there, once project funding is complete.”
Bau would require a capital investment of $134.8-million, and would produce some 116 000 oz/y of gold.