Village Main Reef acknowledges operational, financial challenges
Gold miner Village Main Reef (VMR) has confirmed that, owing to the operating and financial constraints it has experienced, its China-based parent company Heaven Sent Gold has postponed its planned listing on the Hong Kong Stock Exchange.
VMR CEO Jeff Dong said the postponement of the listing was owing to mined volume and recovered grade at both VMR’s Tau Lekoa and Kopanang underground gold mines, in South Africa, being below expectation; the impact of load-shedding on production and operating profit; and four seismicity-related fatalities recorded at Tau Lekoa in December.
To date, Heaven Sent has invested R2.2-billion in VMR.
“Despite the postponed listing and challenging operating environment, we made the decision to continue to invest and support the VMR group.
“Accordingly, we committed to a much more active operational involvement in the business, with new senior appointments during January, both in our underground and surface businesses, and I am pleased to confirm that we have already seen an improved performance at our operations,” Dong said.
He added that all stakeholders, including the Department of Mineral Resources and Energy, representatives of organised labour and employees, had been briefed on the current challenges at VMR and had been engaged on measures taken by the company to address these.
“Provided that these positive results continue, and with the cooperation of all stakeholders in delivering the envisaged improvements in safety, production and costs – and thus in revenue and a return to profit – restructuring of the company’s operations, and possible job reductions, may be avoided.
“We plan to build from the successful turnaround of the VMR group and expand our business, and to revisit a future listing,” Dong noted.
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