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Power crisis strikes Simmers at a critical time Posted: Tue, 19 Feb 2008 [miningmx.com] -- SIMMER & Jack will raise gold output slightly in the final quarter of its 2008 financial year at its flagship Buffelsfontein mine, but overall company output will be offset by reduced ounces from its Mpumalanga mines and curtailed production from its First Uranium subsidiary. “Production targets cannot, however, be considered certain until the company has more clarification from Eskom about the availability of electrical power supply to mining operations in South Africa,” CEO Gordon Miller said in a statement accompanying the results. "The power constraints come at a time when the group is finally beginning to see results at all its operations, after an intense period of investment in development and construction," he added. Simmers is running studies into installing and using its own power-generating capacity to keep its operations running and to ensure production. Simmers turned in a difficult third quarter where December quarter production of 938.7kg or 30,179 oz from Buffelsfontein was 85kg lower year-on-year and 103kg smaller quarter-on-quarter. The key reasons were a six-day shutdown after an underground fatality, while a storm that damaged infrastructure and cut power to the mine, trapping workers underground at 5 Shaft, which lost a 28 working days. There were also underground seismic events, which put some panels out of commission temporarily and permanently. There was also a “lock-up” of 151kg of gold in the new carbon-in-pulp (CIP). Cash costs at the mine vaulted to R161,919/kg from R152,708 in the previous quarter and R133,298/kg in the same period a year ago. Buffelsfontein’s gold output forecast for the March quarter, which marks the end of Simmer’s financial year, is 35,000 oz, slightly ahead of the September quarter, but the current power crisis in South Africa made this bit of a moving target. The other wholly owned Simmers gold operation is the Transvaal Gold Mining Estate (TGME), where gold output was 81% higher at 97.3kg or 3,127 oz from the Frankfort section. Cash costs were still staggeringly high at R219,389/kg despite coming down from R362,202/kg in the previous quarter. Click Here to subscribe to our daily newsletter
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