Village Main Reeef CEO Ferdi Dippenaar
Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – Despite losing four production days as a result of an earthquake on August 5, JSE-listed Village Main Reef’s Tau Lekoa mine, in the North West, exceeded production expectations for the quarter ended September 30, producing 28 742 oz (894 kg) of gold in the three months.
The gold miner said in a quarterly statement on Wednesday that the seismic event led to 45 kg of lost production, but that no significant damage was incurred to the underground and surface infrastructure.
Gold sold at Tau Lekoa decreased by 10% , from 27 938 oz (869 kg) in the June 2014 quarter, to 25 270 oz (786 kg) in the period under review, mainly owing to gold lock-up in the metallurgical plant at quarter end.
The lower gold sales resulted in an 8% drop in gold revenue to R349-million, compared with R378-million in the prior quarter.
Average gold price realised amounted to R443 599/kg – up 2% from R435 314/kg in the previous three months.
Despite higher electricity tariffs during the winter months, as well as yearly labour increases, cash costs for Tau Lekoa decreased to R280-million, compared with R292-million in the previous quarter, while, on a per unit basis, cash costs increased to R358 775/kg, or $991/oz, owing to lower gold sales.
Village added on Wednesday that the mine’s exploration project had progressed well thus far and had provided it with good geological information of the two targeted areas.
“This has resulted in an extension to the scope of the project, which will include the drilling of an additional two holes. Two holes have been completed towards the north and one is in progress,” it noted.
CONS MURCH DISPOSAL
Meanwhile, as a result of previously reported capital constraints and a fatal accident, the Consolidated Murchison (Cons Murch) antimony and gold mine, in Limpopo, lost available production shifts, specifically from the high-grade antimony Athens shaft, which had a negative impact on production volumes.
The operation produced 270 t of antimony and 1 224 oz (38 kg) of gold for the September quarter, a decrease of 36% in antimony and an increase of 12% in gold compared with the June 2014 quarter.
“The recapitalisation programme started with the delivery of critical items expected in the second quarter, which will see a focus on increasing development rates and an increase IN the number of stopes available for mining, which should lead to an improvement in production rates,” the company outlined.
In September, shareholders voted in favour of the disposal of Cons Murch and progress was being made to finalise the last conditions precedent to the transaction, with the first phase of the transaction expected to close in the latter half of this month.
BUFFELSFONTEIN
Meanwhile, in the September quarter, Village’s Buffelsfontein (Buffels) mine, in the Free State, realised a cash operating loss of R6-million, compared with a cash operating profit of R9-million in the previous quarter.
Included in the previous quarter’s results, however, was a R24-million payment received as a refund for pumping charges paid on behalf of third parties.
The operation continued to treat surface material, which contributed to offsetting the carrying cost of the operation while rehabilitation activities were under way.
A total of 59 kg of gold was produced in the current quarter and plans were under way to increase the surface throughput to produce between 70 kg and
80 kg a quarter.
“Rehabilitation continues, with good progress being made with the demolition of the low-grade plant, the 4 and 6 shafts and the old main office buildings. Rehabilitation costs of about R12-million were incurred in the past quarter and will be recovered from the rehabilitation trust fund.
“In addition, an amended environmental management plan was submitted to the Department of Mineral Resources and approval thereof should reconfirm that Buffels is adequately funded to rehabilitate the mining affected area,” the group stated.
DENTED PROFITS
Group profit before taxation from continuing operations decreased from R69-million to R45-million, while profit after taxation decreased from R22-million in the prior three months to a loss of R12-million for the current quarter, mainly as a result of a loss of R51-million incurred at the Cons Murch operations.
Owing to a “significant” decrease in the treatment of surface sources, Buffels reported a loss or carrying cost of R6-million for the quarter.
“It is planned to increase the treatment of surface sources to previous levels in the December quarter,” said the miner.
Post quarter-end, the company completed the consolidation of its authorised and issued share capital on a basis of 1-for-20 shares, which saw every 20 shares held consolidated into 1 share.
Headline earnings a share from continuing operations decreased from 174.84c in the previous quarter to 99.71c in the period under review.