Village Main Reef takes a knock due to weak gold price

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Village Main Reef’s assets comprise of Lesego Platinum, Cons Murch mine, Buffelsfontein gold mines, Tau Lekoa gold mining company and the South Plant.

“Revenue was negatively affected by the lower realised average gold price of 421,701 rand per kilogram for the six months ended 31 December 2013, compared to 452,188 rand per kilogram for the 2012 period, a decrease of 7 percent,” said the company in a statement

Antimony production also declined dramatically by 53 percent from 2,728 tonnes in 2012 to 1,289 tonnes in 2013, which was a direct result of an unprotected strike that took place at their Cons Murch antimony and gold mine in July 2013.

This also resulted in the group’s cash operating profit to be reduced to 198 million rand for the period, compared to 324 million rand in 2012.

Basic and headline earnings per share from continuing operations declined 53 percent to 12.07 cents and 43 percent to 14.55 cents respectively.  

On a positive note, gold production from continuing operations increased 2 percent from 1,987 kilograms to 2,030 kilograms for the period.

The group’s net asset value also increased 49 percent from 79.85 cents to 118.8 cents per share, which is attributed to the restructuring of their Buffelsfontein gold mine and the deconsolidation of their Blyvooruitzicht gold mine.

Operations were ceased at Buffelsfontein as well as Blyvooruitzicht during the period, as the company lost control of Blyvooruitzicht.

“A profit amounting to 421.4 million rand was recognised in the statement of comprehensive income as a result of the deconsolidation,” said the company in a statement.