“The highlight of the past 12 months has been the restructuring and strengthening of our balance sheet which culminated in the NAV (net asset value) per share increasing by 50 per cent from 80 cents to 120 cents per share and positions Village to transform itself into a resources investment holding company,” said [DATA VIL:Village Main Reef Limited] in a statement.
For the 12 months ended 30 June 2014 however the group reported significant costs associated with the restructuring of Buffels Mine as well losses from its Cons Murch operations.
This resulted in earnings per share dropping from 34.46 cents to 22.4 cents with headline earnings per share declining by 34.7 per cent to 26.12 cents.
Operating profit also fell by 19.6 per cent from 293 million rand to 236 million rand.
(READ MORE: Village Main Reef takes a knock due to weak gold price )
The group said that a further restructure of its asset portfolio will take place and will include acquiring value-enhancing assets.
“Furthermore, should it result in the disposal of Tau Lekoa or even of Village itself as a going concern, so be it. As we move into the future Village's asset portfolio will be different from its present one,” continued the statement.
Tau Lekoa Gold Mine posted a four per cent increase in production to 3,436 kilograms with mineral resources increasing by 25 per cent to 4.78 million ounces (Moz).
Mineral reserves however decreased by two per cent to 1.17Moz due to depletion.
“As part of our current strategy, drilling is underway that could confirm our confidence to increase our estimate of the life of mine to seven or eight years.”
(READ MORE: Village Main Reef on the path of recovery)
At Buffels, Village said that the closure of the mine was inescapable following the extraction of the last remaining economically mineable reserves. Buffels had been producing gold since 1954.
“We have made progress with the rehabilitation of this vast surface mining area and believe that we have sufficient cash resources in the rehabilitation trust fund to complete closure activities.”
Village’s gold and antimony producer, Cons Murch is set to be sold to Australian based Stibium Mining for 15 million US dollars.
“In the interim, Village remains responsible for the necessary working and capital expenditure to sustain [Cons Murch’s] operations, once the sale has been completed, Stibium is committed to a capital spend of 10 million US dollars to recapitalise the mine so as to refurbish or replace ageing infrastructure, undertake the necessary underground development and gain access to extensions to the Gravelotte ore body,” said the group.
Village added that they will not be undertaking anymore deep level mining ventures but do intend to carry on operating at Tau Lekoa.
Also, an evaluation of the Village’s Lesego platinum project indicated that it does not have the technical skills or financial capacity to manage the project without partners.
“Our present intention, then, is either to dispose of the (Lesego) asset or to find a development partner for this comparatively shallow and therefore, attractive quality deposit.”
(WATCH VIDEO: Village Main Reef to shut non-profitable Operations )