[miningmx] — THE future of Village Main Reef’s Buffelsfontein mine, near Stilfontein
in North West, is once again up in the air following an announcement that the group
has embarked on a review of the viability of the mine.
Buffels is one of the mines Village acquired when the company took over the asset
portfolio of Simmer & Jack (Simmers) in 2011. The asset has never lived up to
Village’s expectations since it took ownership, suffering a cash-operating loss of
R41m during the June quarter, down from the R20m loss during the previous three-
month period. While gold production was down 5% to 287kg quarter-on-quarter to
9,741 oz, costs were up 16% to R565,080/kg – partly attributed to an increase in
electricity charges due to winter tariffs (R16m).
The announcement of the review comes just over a year after Simmers embarked on
a major cost-cutting exercise at the mine, when its workforce was cut down by a
third to around 2,500. Simmers, for its part, acquired Buffels after DRDGOLD had
liquidated the asset in 2005.
Reporting quarterly figures to end-June, joint CEO Marius Saaiman said the group
has already started with a detailed analysis of the ore body to determine whether
the existing mine plan could be adjusted.
“I don’t want to pre-empt the outcome of the review, but all those options are
available to us,’ Saaiman said when asked whether Village was looking to fix, close
or sell the mine. He said the review would be completed by the middle of September.
BLYVOOR
Village recorded its first income in June from Blyvoor, an asset it acquired from
DRDGOLD earlier this year in a R150m transaction. Producing 216kg of gold during
the month, it generated a profit of R5.6m, of which R1.6m was from mining
operations and R4m from the sale of Rand Refinery shares.
Saaiman said the group would report consolidated annual figures for FY 2012 and
guidance for 2013 during September.
