Village Main Reef stocks reach highest in seven weeks
Village Main Reef shares rose the most in seven weeks after the South African gold company reported record production at its Tau Lekoa mine and restructuring at other operations.
The stock rose 18%, the most on an intraday basis since September 11, to R0.47 at 9.49am in Johannesburg on volumes 2.3 times its three-month daily average.
"Village is pleased with the production achieved at our flagship Tau Lekoa mine, which showed further improvements on the June quarter," chief executive Ferdie Dippenaar said in a statement. "Our challenge will be to maintain the momentum going into what is normally a difficult time of the year."
Tau Lekoa’s production was 1 090kg for the period ended September 30, up 33% quarter on quarter, Village said. Total production was 1 133 kg, a gain of 27%.
The losses incurred from putting its Buffels operations on care and maintenance are expected to drop to R7-million a month in the current quarter. It halted Blyvoor output after the granting of a provisional liquidation order on August 6.
Cash generated by Tau Lekoa, R156-million, was reduced by losses sustained at Blyvoor and Buffels and operating losses at Consolidated Murchison, leaving the company cash neutral, Village said. "Management is confident that this will not be the case going forward as losses from both Blyvoor and Buffels have been addressed and Cons Murch is returning to normalised operational levels."
Workers held a strike at the Cons Murch gold and antimony mine in Limpopo province in July. – Bloomberg