Johannesburg, South Africa — MININGREVIEW.COM — 14 November 2008 – Simmer & Jack Mines, Limited (Simmers) – an emerging South African resources company with significant gold and uranium assets – reported a R14 million profit from mining activities in the quarter to 30 September 2008 – a 207% improvement on the operating loss of R13 million in the previous quarter.
Another highlight was the narrowing of net loss after taxation by 10%, from R95 million in Q1 to R85 million in Q2.
During this quarter – which is Q2 of the Simmer & Jack 2009 financial year – the group recorded total production of 44 936 oz which was sold at an average price of R216 349 per kg. This was a 9% increase on the 38 410 ounces produced in Q1, and translated to gold revenue of R304 million – a 17% increase on the previous quarter.
Speaking at Simmers’ interim results presentation, CEO Gordon Miller confirmed that the company’s gold operations had been slowed down in an effort to adapt to the crisis in the capital markets. He was confident, however that the company was financially flexible enough to ensure capital for its projects, which were at different stages of construction or rehabilitation.
However, in common with other South African gold miners, the impact of rising costs and increased down-time as a consequence of safety issues had impacted on Simmers’ performance in the second quarter. Total cash costs increased 6% from R266 million to R283 million.
At Buffelsfontein gold mine (BGM) – in addition to a 17% increase in total cash costs – two fatal accidents curtailed production from the high grade No. 2 shaft during Q2. At Transvaal Gold Mining Estates (TGME) – which is operating as a trial mining and pilot plant project until Biox technology is installed – the relatively low production levels carry a disproportionately large burden of the cash operating costs.
In further developments since the end of the second quarter, TGME’s first heap leach pad at Elandsdrift had been commissioned in October 2008, following the granting of a water use licence earlier that month; a two-year wage agreement between TGME and the bargaining unit of the National Union of Mineworkers (NUM) had been successfully concluded; and technical reports for BGM, TGME, Ezulwini Mine, and MWS had been updated.