Village Main Reef on the path of recovery

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The mining and resources investment company,[DATA VIL:Village Main Reef Limited], reported an increase in in its total cash operating profit from 49.5 million rand for the three months ended 31 March 2014 to 111.9 million rand for the June quarter due to a production hike at its Tau Lekoa operation, its Buffelsfontein (Buffels) mine closure and progress in rehabilitation activities.

(READ MORE: Village Main Reef takes a knock due to weak gold price)

Profit from continuing operations before interest and tax improved significantly to 76.6 million rand from a loss of 14.8 million rand previously.

Tau Lekoa in South Africa’s North West Province posted a production increase of 34 per cent from 674 kilograms to 869 kilograms (kgs), with underground tonnage 47 per cent higher at 237,253 tonnes.

Despite lower gold prices, the operation’s revenue increased by 30 per cent to 378 million rand, indicating that Tau achieved its annual target of 3,437 kgs for the 2014 financial year.

(WATCH VIDEO: Discussing Village Main Reef’s positive gold production)

The group’s Buffels operation in the Witwatersrand Basin generated 46 million rand in revenue, up from eight million rand in its March quarter with a cash operating profit of 10 million rand compared to a loss of 14 million rand before due to increased profits from gold sales.

On the other hand, Village’s Cons Murch antimony and gold mine in Limpopo continues to struggle to meet its previous operating levels.

Total revenue decreased from 43 million rand to 31 million rand due to lower prices and volumes with antimony output dropping 38 per cent from 671 tonnes to 419 tonnes and gold production lowering by 30 per cent from 49 kgs to 34 kgs.

(WATCH VIDEO: Village Main Reef to shut non-profitable operations)

“It is anticipated that the [Cons Murch} mine will see an improvement in operational performance in the September 2014 quarter following the delivery of new mechanised equipment during the June 2014 quarter. Good progress is being made in dealing with the conditions precedent with regard to the disposal of Cons Murch,” said the group in a statement.