The new CEO of VMR Group, Jeff Dong, confirms that the company, experienced operating and financial constraints brought about primarily by circumstances leading to the postponement in December 2019 of the Hong Kong Stock Exchange (HKEx) listing of its parent company in Hong Kong, Heaven Sent Gold.
The postponement of the listing, Dong said, is attributable primarily to a combination of:
- mined volume and recovered grade below expectation at both VMR’s Tau Lekoa and Kopanang underground gold mines, resulting in lower than expected gold production;
- the negative impact on production, revenue and operating profit of unprecedented and unexpected Stage 6 load-shedding by power utility Eskom early in December; and
- four seismicity-related fatalities at Tau Lekoa, also in December 2019.
Dong confirmed that to date an investment of R2.2 billion has been made in the Group by the Heaven Sent Capital Group from China.
“Despite the postponed listing and challenging operating environment, we made the decision to continue to invest and support the VMR Group.
“Accordingly, we committed to a much more active operational involvement in the business, with new senior appointments, both in our Underground and Surface businesses during January 2020, and I am pleased to confirm that we have already seen improved performance in our operations,” Dong said.
All stakeholders, including the Department of Mineral Resources, representatives of organised labour and employees, Dong says, have been briefed on the current challenges and have been engaged on the company’s measures addressing these.
“Provided that these positive results continue, and with the co-operation of all stakeholders in delivering the envisaged improvements in safety, production and costs – and thus in revenue and a return to profit – restructuring of the company’s operations, and possible job reductions, may be avoided.
“We plan to build from the successful turnaround of the VMR Group and expand our business, and to revisit a future listing,” Dong said.