[miningmx.com] — VILLAGE Main Reef’s Buffelsfontein (Buffels) 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 on Friday the group
was happy to give Buffels another chance, saying that the mine was close to break-
even after it posted a cash-operating loss of R41m during the June-quarter, during
which it produced gold at a cash cost of R565,080/kg.
This was preceded by a R20m 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 on
Friday. “We are already seeing a much better production rate and it is also bringing
costs substantially down.’
Saaiman said normalised electricity tariffs, following hikes during winter, would for
now contribute to a lower cost base for Buffels. The company is also experiencing less
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.
