HomeGoldSimmers Q1 output down by 27%

Simmers Q1 output down by 27%

Tau Lekoa gold
mine “’ now officially
in the Simmers stable
Johannesburg, South Africa — MININGREVIEW.COM — 26 August 2010 – Shares in Simmers & Jack Mines fell more than 3% as the South African gold miner posted a 27%  decline to 556kg in FY 2011 first-quarter gold production in the three months ended 30 June, compared with 763kg in the final quarter of FY2010, ended 31 March 2010.

Simmers attributed the drop in output to the closing of its Buffelsfontein mine for 19 days in May after a mine accident killed three workers.

A statement released here said total cash costs were down 4% to R216.1 million from R225.3 million. Revenue was 21% lower at R161 million from R204 million, and the company reported a cash operating loss of R55.2 million, compared with R21.3 million in Q4 2010.

It added that following the accident the mine had introduced a task team to reduce the number of section 54 notices issued by the DMR for transgressions relating to health and safety issues.

Since the accident, 16 inspections had been conducted by the DMR resulting in only two section 54 notices being issued, neither of which affected production, Simmers said.

The company went on to say that the highlight of the quarter had been the execution of the Tau Lekoa mining rights on 3 June followed, since the end of the quarter, by the registration of the mining rights from AngloGold Ashanti to Buffelsfontein gold mine.

“The conclusion of the acquisition, which has been some 15 months in the pipeline, is the first step in creating a stable platform from which to consolidate and grow the company into a mid-tier gold miner,” said Simmers.

It added that production at Buffelsfontein gold mine was expected to continue to improve over the next three quarters, with Q2 for FY2011 showing an improvement on the 17 879 ounces produced in Q1.

Tau Lekoa would be consolidated into the Buffelsfontein results for two months during the second quarter of 2011 period. Tau Lekoa is expected to contribute some 17 000oz for the two month period at a cash cost substantially lower than that of Buffelsfontein.