Gold production at JSE-listed Village Main Reef’s Tau Lekoa gold mine, in the North West decreased marginally to 28 646 oz in the quarter ended December 31, compared to 28 742 oz in the quarter ended September 30.
Meanwhile, the amount of gold sold at Tau Lekoa increased by 23% to 31 025 oz in the same period. This was mainly owing to the previously reported gold lock-up in the metallurgical plant being released.
The higher volume gold sales resulted in 19% higher gold revenue amounting to R414-million compared with R349-million reported in the previous quarter.
The average gold price dropped to R429 518/kg, down 3% from R443 599/kg, while headline earnings per share from continuing operations increased from 99.71c in the previous quarter to 113.62c in the current quarter.
Village’s cash operating profit increased by 15% quarter-on-quarter, up from R83.6-million to R96.5-million, while the pre-tax profit also increased by 15% quarter-on-quarter, up from R44.9-million to R51.5-million.
Meanwhile, Village received a firm intention by Chinese firm Heaven-Sent Capital Group to acquire all the issued share capital of Village at an all-cash offer of R12.25 per share.
A shareholder meeting has provisionally been scheduled for on April 2 to consider the offer.
Village’s Buffelsfontein (Buffels) gold mine, near Stilfontein, realised a cash operating loss of R3-million in the December quarter, compared with a cash operating loss of R6-million in the previous quarter.
Buffels continues to treat surface material which contributes to offsetting the carrying cost of the operation whilst rehabilitation activities are under way.
In line with its plan to increase throughput of surface sources, a total of 76 kg of gold was produced in the current quarter compared to 59 kg in the previous quarter.
An amount of R8-million was also recovered from the sale of scrap items as part of the rehabilitation activities underway.
Village reports that after continually informing all stakeholders of the deterioration in security in the operating environment at Buffels, mainly due to the increase in activities of illegal miners, and the potential impact thereof on the safety of its employees, pumping at 2 shaft was stopped post quarter end, in early January this year.
The company further reports that a significant amount of rehabilitation has already been completed. Buffels has R147-million in its rehabilitation trust fund and, based on contractual agreements entered into; it has sufficient funds to complete the rehabilitation activities under way.
Village’s financially distressed Consolidated Murchison (Cons Murch) antimony and gold mine, in Limpopo, was voluntarily placed in business rescue on December 12, 2014 and has been deconsolidated from Village following the failure of Australia-based Stibium Mining to raise the funding to acquire it.
However, earlier this month, the business rescue practitioner of Cons Murch applied to discontinue the business rescue proceedings and instead place the mine in provisional liquidation.
Village has committed a maximum amount of R22-million as post commencement finance to Cons Murch to fund certain business rescue and liquidation expenses.