File image: Reuters

Village Main Reef (VIL) has reported an 11% rise in gold production‚ excluding Blyvooruitzicht‚ to 43‚925 ounces in the quarter ended September from 39‚480 ounces in the previous quarter.

R108 million cash generated for Q1 2013 compared to R116 million for Q4 2012.

Antimony production increased 3% quarter on quarter to 1‚473 tons from 1‚436 tons produced in Q4.

It said it generated R108 million cash in the quarter‚ compared with R116 million in the previous quarter.

Earnings per share were lower at 2.14 cents compared to 9.81 cents for Q4 2012.

The miner reported an improved realised average gold price of R440‚000/kg in Q1 compared with R423‚872/kg‚ Q4‚ 2012.

Joint CEO Marius Saaiman said the company was pleased with the free cash flow of R108 million generated by its operations‚ some 11 cents per share‚ during a quarter which is typically adversely impacted by higher costs associated with increased winter electricity tariffs.

Tau‚ which benefited from a 15% surge in production‚ was the main contributor to the cash generated.

“Our immediate challenge lies with our Buffels and Blyvoor operations which recorded cash operating losses of R48 million and R46 million respectively. Management focus is on increasing production and reducing costs at both these operations and plans to achieve this are well underway‚” he said.

Revenue was positively impacted by the higher realised gold price‚ however‚ the impact of winter electricity tariffs added some R36 million to the cost of all operations during the September quarter.

Towards the latter part of September‚ 1‚700 employee members of the National Union of Mineworkers (NUM) embarked on an illegal strike at the Blyvoor operations. The strike was settled some three weeks later on 18 October 2012‚ when parties agreed to implement the wage settlement as negotiated between the NUM and the Chamber of Mines.

During this same period‚ a seismic event at Blyvoor´s underground operations resulted in a material number of underground panels collapsing. After reviewing the damage the Management at Blyvoor believe that these panels can be re-opened over a period of six months. Production from underground operations will however be lower during the December quarter‚ the company said.

Looking ahead‚ Village said production volumes are traditionally similar in the December quarter to those achieved in the September quarter‚ and it should also see the benefits of the absence of winter tariffs.

“As indicated previously‚ we expect production at Blyvoor underground operations to be lower as a result of the strike action and the unavailability of mining panels associated with the seismic event‚” it added. - I-Net Bridge