Johannesburg, South Africa — 25 September 2012 – Village Main Reef’s Buffelsfontein (Buffels) mine has been spared the axe following a review of the asset’s viability, with the higher gold price and improved production offering the mine lifeline for now.
Village Main’s joint CEO Marius Saaiman told Miningmx the group was happy to give Buffels another chance, saying the mine was close to break-even after it posted a cash-operating loss of R41 million in the June-quarter, during which it produced gold at a cash cost of R565,080/kg.
This was preceded by a R20 million operating loss during the three months to end-March.
The company said in August that it was reviewing the viability of the mine following these successive unprofitable quarters.
“We’ve decided to continue operating the Buffelsfontein mine,” Saaiman said. “We are already seeing a much better production rate and it is also bringing costs down substantially.”
Saaiman said normalised electricity tariffs, following hikes during winter, would for now contribute to a lower cost base for Buffels. The company was also experiencing fewer safety-related stoppages.
Another positive for Buffels is the improved rand gold price. The metal is now trading close to R470,000/kg as a result of continued pressure on the rand and a hike in the gold price, following the Federal Reserve’s introduction of a third round of “quantitative easing”. Gold was trading at around R405,000/kg at the beginning of May.
Source: Miningmx. For more information, click here.