HomeGoldVillage misses production targets for second successive quarter

Village misses production targets for second successive quarter

Village’s top
performer, the
Tau Lekoa mine
Johannesburg, South Africa — 10 April 2012 – Gold producer Village Main Reef has missed its production target for a second quarter in a row, but the strong rand gold price should enable the company to continue delivering sufficient cash flows.

Posting production figures for the quarter to the end of March, Village revealed that its output during the period was around 5% short of guidance, producing 38,508oz of gold (guidance: 40,530oz), reports Miningmx.

Simmer & Jack’s former Buffelsfontein mine was the biggest underperformer, missing target by 18% with figures of 9,433oz, while Cons Murch also under-delivered by 6% (output: 2,219oz).
Tau Lekoa met guidance with figures of 28,773oz; delivering 1% more than what was promised.

“At Tau Lekoa, we have started to witness the rewards of the optimisation project which positively impacted production, notwithstanding the effect of the Christmas break,” read comment by CEO Bernard Swanepoel.

“At Buffelsfontein and Cons Murch, additional challenges were experienced which affected our production volumes. We have taken the necessary steps and anticipate that production at these operations will return to normalised levels during the June quarter.”

When pressed on Buffelsfontein and Cons Murch’s “additional challenges”, Swanepoel told Miningmx the company was still fine-tuning the development of high grade areas in the mine.
“The emphasis remains on grade, but the development (of high grade areas) needs to keep up,” Swanepoel said. “We don’t yet have sufficient flexibility.”

Antimony production at Cons Murch amounted to 837t “’ 24% under guidance. After reporting a strong performance in 2011’s September-quarter – the first period following Village’s takeover of Simmers’ assets – Village has now under-delivered on its own targets for two quarters in a row.

The latest period’s production figures imply a 15% quarter-on-quarter decline. An for the period, compared to the R149 million reported for the December-quarter.

Gold continues to trade above R400,000/kg “’ a long way above Swanepoel’s earlier “profitability benchmark” of R350,000/kg.

He told Miningmx in November: “At a gold price below R350,000/kg at today’s operational levels we would be in the dwang.

“At R350,000/kg you would not buy Blyvoor (the asset Village is acquiring from DRDGold). Tau Lekoa is fine at R300,000/kg but it would not make money. Buffels is fine at R350,000/kg but it also would not make money.”

Village expects to release full financial for the quarter towards mid-March.

Source: Miningmx. For more information, click here.