[miningmx.com] – VILLAGE Main Reef (VMR) intended to draw up a short-list of asset or company level bidders by the end of November, said CEO Ferdi Dippenaar who added that it was still testing several bidder credentials.
“A number of parties have registered interest,” said Dippenaar following presentation of the firm’s September quarter figures in which the company posted a R12.5m loss compared to a R21.7m profit in the corresponding quarter of the previous financial year.
“By the end of November, we will have established a shortlist. It’s a bit early to say what will be delivered to shareholders,” he said. He added that “… depending on the value combination that would be the obvious recommendation to shareholders”.
Provided VMR completes the $15m sale of gold and antimony producer, Consolidated Murchison (Cons Murch), to an Australian private investment company, Stibium Mining, VMR will consist of the Tau Lekoa gold mine, shares in Continental Coal, and the Lesego platinum project.
The quarter’s performance was heavily affected by Cons Murch which posted a R51m loss, an outcome that Dippenaar said was typical of an asset that was going through a disposal process.
“We will get some form of conclusion for Cons Murch,” he said. “It has been an erosion of shareholder value in the past few months.”
However, none of VMR’s assets came to the party in the quarter with a lock-up of gold in the metallurgical plant affecting Tau Lekoa’s contribution to the company.
An earthquake in the region, which also heavily affected AngloGold Ashanti, contributed to a 10% decline in VMR’s quarterly gold production to 25,270 ounces, but it was the lock-up of gold which had the biggest negative effect.
“We burned R60m in cash in the quarter owing to the gold lock-up, but the gold has been delivered to Rand Refinery so that has been dealt with,” said Clinton Halsey, CFO of VMR. VMR’s cash balance was R94.3m, a 39% quarter-on-quarter decline.
Shares in the company slid 8.7% following publication of the results and were last trading at R5.10. On November 3, plans for a one in 20 share consolidation were implemented such that shares in issued were reduced to 50.2 million shares from just over one billion shares.
Dippenaar said Tau Lekoa was on course for a vastly improved performance, akin to the June quarter in which it produced a R70m cash operating profit.
“We wanted to see more consistency at Tau instead of violent quarterly peaks,” said Dippenaar. “If we can find consistency we can look forward to increase in gold production from Tau by the end of the year,” he said.
