TIDMVGM
RNS Number : 3822P
Vatukoula Gold Mines PLC
01 October 2013
1 October 2013
Vatukoula Gold Mines plc
("Vatukoula" or "the Company")
Operational Update for the Fourth Quarter and Twelve Months
ended 31(st) August 2013
Vatukoula Gold Mines Plc. (AIM:VGM), the AIM-listed gold
producer, is pleased to announce its unaudited preliminary
operational results from its 100% owned Vatukoula Gold Mine in Fiji
for the fourth quarter ended 31(st) August 2013 ("Q4") and twelve
months ended 31(st) August 2013.
-- 18% reduction in cash costs per tonne to US$148 per tonne in
the twelve months ended August 2013 from US$180 per tonne during
the same period last year
-- 29% increase in grade (5.85 g/t) delivered from underground
compared to the previous quarter (Q3: 4.53 g/t)
3 months 3 months 3 months 12 months 12 months
ended Aug ended May ended Feb ended Aug ended Aug
2013 (Q4) 2013 (Q3) 2013 (Q2) 2013 2012
------------------------------- ----------- ----------- ----------- ----------- -----------
Total underground tonnes
mined (ore, waste & capital) 96,701 94,793 89,341 467,942 477,089
Strike drive development
(metres) 395 405 342 1,682 4,034
Capital development (metres) 1,131 976 765 4,498 4,975
Ore processed (tonnes) 111,936 100,182 103,916 428,978 479,524
Average ore head grade
(grams/tonne) 3.96 3.48 3.70 3.79 4.24
Total recovery 79.44% 79.76% 74.82% 75.55% 78.34%
Gold produced 11,442 9,005 8,861 39,858 53,152
Gold shipped 11,219 8,704 9,113 39,517 52,616
------------------------------- ----------- ----------- ----------- ----------- -----------
Unaudited Financial Highlights: 12 months 12 months
ended August ended August
2013 2012
--------------------------------------------------- -------------- --------------
Revenue (GBP'000) 39,080 54,925
EBITDA (GBP'000) (5,486) (1,548)
Cash (used) / generated from operating activities
(GBP'000) 193 6,257
Underlying operating (loss) (GBP'000) (12,304) (6,598)
Cash cost per ounce shipped (US$/ounce) 1,606 1,643
Average realised gold price (US$/ounce) 1,533 1,644
Basic loss per share (pence) (10.45) (7.81)
Capital Investment (GBP'000) 13,884 16,063
Cash and Cash equivalents (GBP'000) 635 2,437
--------------------------------------------------- -------------- --------------
David Paxton, CEO of Vatukoula Gold Mines, commented:
"During the last twelve months we have embarked on controlling
costs and setting the foundation for future growth. While we
finalised the long-term financing announced on 12 August, Q4
production remained at a restricted rate. Nonetheless our continued
cost controls and higher grades delivered from underground lowered
our cash costs per ounce by some 23% over Q3
Once the Zhongrun agreement has completed we will be able to
deliver our Company strategy to grow our production to sustainable
and profitable level and we expect to see the effect of this
investment filter through to increases in production in the six
months following the completion of the investment with our long
term production target being achieved in the 12 months after"
Operating Results
3 months 3 months 3 months 12 months 12 months
ended Aug ended May ended Feb ended Aug ended Aug
2013 (Q4) 2013 (Q3) 2013 (Q2) 2013 2012
----------------------------------- ----------- ----------- ----------- ----------- -----------
Underground Mining
Total underground tonnes
mined (ore, waste & capital) 96,701 94,793 89,341 397,995 477,089
Operating development (metres) 3,199 3,666 3,419 13,644 15,513
Strike drive development
(metres) 395 405 342 1,682 4,034
Capital development (metres) 1,131 976 765 4,498 4,975
Total development (metres) 4,725 5,047 4,526 19,823 24,521
Sulphide Plant
Sulphide ore delivered
(tonnes) 54,637 59,456 64,023 240,156 304,042
Sulphide head grade (grams/tonne) 5.85 4.53 4.55 5.00 5.12
Oxide Plant
Oxide ore delivered (tonnes) 57,076 40,424 41,017 189,047 176,357
Oxide head grade (grams/tonne) 2.15 2.36 2.36 2.27 1.90
Total (sulphide + oxide)
Ore processed (tonnes) 111,936 100,182 103,916 428,978 479,524
Average ore head grade
(grams/tonne) 3.96 3.48 3.70 3.79 4.24
Total recovery 79.44% 79.76% 74.82% 75.55% 78.34%
Gold produced 11,442 9,005 8,861 39,858 53,152
Gold shipped 11,219 8,704 9,113 39,517 52,616
----------------------------------- ----------- ----------- ----------- ----------- -----------
Cash Costs
----------------------------------- ----------- ----------- ----------- ----------- -----------
Cash cost per ounce shipped
(US$) 1,393 1,812 1,688 1,606 1,643
Cash cost per tonne mined
and milled (US$/tonne) 140 157 148 148 180
Average realised gold price
(US$/ounce) 1,317 1,474 1,636 1,533 1,644
----------------------------------- ----------- ----------- ----------- ----------- -----------
Underground Production and Development
Mining operations at the Vatukoula Gold Mine have been
maintained at a reduced rate while we wait for the agreed financing
to complete. We have continued our priority on ore production and
undertaken development when we have had equipment available.
We have started remedial work on the Smith shaft below 19 level.
This section of the shaft had been unused since 2006 when the mine
was closed by the previous owners. We have accessed the lower
levels and are cleaning out the shaft from these levels. Pumping in
this area has been maintained and we are lowering the water toward
the 23 level. Spillage removal continues in the Philip shaft as and
when we have equipment availability.
Total tonnes of ore, waste and capital mined for the twelve
months ended 31(st) August 2013 decreased by 17% to 397,995 tonnes
compared to the twelve months ended 31(st) August 2012. The lower
tonnages were directly driven by the lowered availability of mining
equipment as a result of the financial constraints faced by the
mine over the last three quarters. For Q4, the total tonnage of
ore, waste and capital mined was 2% higher than Q3. Capital
development metres decreased 10% for the twelve months ending
31(st) August 2012 from 4,975 metres in 2012 to 4,498 metres in
2013.
The ore delivered from underground for the twelve months ended
31(st) August 2012 was 240,156 tonnes, a 21% decrease compared to
the same period last year. This reduction in ore delivered was due
in part to the reduction of strike drive development during the
year, which is typically delivered as ore. For Q4 the ore delivered
increased by 41% to 54,637 tonnes compared to the previous
quarter.
The average underground grade for the twelve months was 5.00
grams per tonne, which was lower than the same period last year
(5.12 grams per tonne). For Q4 the average underground grade was
5.85 grams per tonne which was higher than Q3 (4.53 grams per
tonne).
Surface Production
Production from surface oxides and sulphide waste piles for the
twelve months delivered 189,047 tonnes at a grade of 2.39 grams per
tonne. For Q4, surface production was 57,076 tonnes at an average
grade of 2.15 grams per tonne. Ore was delivered from both sulphide
waste dumps and surface oxide production. Sulphide waste is being
processed through the sulphide circuit. The process plant
management team have determined that surface sulphide material can
be processed in the sulphide process, which results in higher
recovery rates.
Vatukoula Treatment Plant ("VTP")
During the twelve months, the VTP processed 428,978 tonnes of
ore which was an 11% reduction compared to the same period last
year (479,524 tonnes). For Q4 the VTP processed 111,936 tonnes of
ore which was 12% higher than Q3 (100,182 tonnes).
The average grade decreased from 4.24 grams of gold per tonne in
the twelve months ending August 2012, to 3.79 grams of gold per
tonne in the twelve months ending August 2013. This was driven by
lower grades delivered from underground. For Q4 the grade increased
to 3.96 grams per tonne from 3.48 grams per tonne in Q3, as a
result of the higher grades delivered from underground and
surface.
Recoveries for the twelve-month period and Q4 ran at 75.5% and
79.4% respectively. For the twelve months the recovery was lower
than the comparable period last year as a result of the sulphide
nature of the material delivered from the waste dumps. On a
quarterly basis the increase in recoveries can be attributed to the
increase in grade delivered from underground and surface.
As previously detailed, surface oxide and sulphide production is
being maintained while the underground ore production is limited.
In the long-run surface mining will be phased out and we expect
that recoveries will return to between 81% and 85% depending on
grades delivered to the mill.
Unaudited Financial Highlights
Revenue for the twelve months ending 31 August 2013 of GBP39.1
million was lower than the same period last year (GBP54.9 million).
This decrease was driven by a reduction in VGM's year-on-year sales
volume and the lower gold price. The average realised gold price
was US$1,533 in the twelve months ended August 2013 compared to
US$1,644 per ounce in the same period in 2012.
The net cash generated in operating activities decreased from
GBP6.2 million generated in the twelve months ended August 2012 to
GBP0.2 million generated in the twelve months ended August 2013.
Prior to movements in working capital these figures are GBP0.1
million used and GBP1.9 million used respectively. The movements in
working capital are for the majority composed of a decrease in
receivables of GBP2.9 million as we accelerated the recovery of
value added tax over the period and a decrease in our accounts
payable by GBP1.3 million.
Capital investment decreased from GBP16.1 million in the twelve
months ended August 2012 to GBP13.9 million in the twelve months
ended August 2013. This decrease is mainly attributable to
substantial decreases in resource drilling activities and the
purchase of plant property and equipment, both being driven by the
lack of capital available..
Cash costs for Q4 were US$1,393 per ounce shipped (Q3: US$1,812
per ounce shipped). The main reasons for the decrease in the cash
costs per ounce is the increase in grade delivered to the mill and
the decrease in cash costs per tonne mined and milled from US$157
in Q3 to US$140 in Q4.
Cash costs for the twelve months ending 31 August 2013 were
US$1,606 per ounce shipped (US$1,643 per ounce shipped for the same
period last year.). Cash costs per tonne reduced significantly from
US$180 in twelve months ending 31 August 2012 to US$148 in twelve
months ending 31 August 2013, and bodes well for our future cost
profile.
Qualified Person
Qualified Person Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed
and approved the information contained in this announcement. Kiran
holds a Bachelor of Engineering (Industrial Geology) from the
Camborne School of Mines and an MBA (Finance) from CASS Business
School. Kiran is the Chief Financial Officer of VGM.
-Ends-
Enquiries:
Vatukoula Gold Mines plc
+ 44 (0)20 7440
David Paxton 0643
Kiran Morzaria
W.H. Ireland Limited Bell Pottinger Pelham
James Joyce + 44 (0)20 7220 + 44 (0)20 7861
James Bavister 1666 Marcin Zydowicz 3232
This information is provided by RNS
The company news service from the London Stock Exchange
END
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