JOHANNESBURG (miningweekly.com) – After culling the unsustainable Blyvooruitzicht (Blyvoor) mine and idling its Buffelsfontein (Buffels) operation, embattled diversified miner Village Main Reef has reported that headline profit from continuing operations has slumped from 51.59c a share in the 2012 fiscal year to 37.83c apiece for the twelve months ended June 30.

The losses from Buffels, including the impairment of assets disclosed as discontinued operations, resulted in a loss of 64.2c apiece, while the Blyvoor operations, which were placed in provisional liquidation post financial year-end, required Village to impair the assets, resulting in a loss of 48.87c a share.

However, CEO Ferdi Dippenaar emphasised in a statement on Monday that the company’s current share price did not reflect its true value.

“We are disappointed that declaring a special dividend of 30c and buying back 6% of shares during the year under review did not create positive momentum in our share price, but we remain of the opinion that regular dividends are just reward to capital providers.

“It also needs to be remembered that, over the past year, most junior mining companies have experienced large devaluations of their share prices,” he commented.

Amid a depressed share price, the miner also swung from a full-year operating profit of R409-million in 2012 to a loss of R373-million in 2013, while gross profit shrunk from R510-million to R265-million over the same period.

Village had recently looked to diversify its portfolio of assets and had, over the period, acquired a 16.24% stake in Continental Coal, having announced its confidence in the fundamentals of thermal coal, as well as South Africa’s role in the international thermal coal market.

Dippenaar added that the challenges experienced at Buffels and Blyvoor had further underscored the merits of converting Village into a resources and investment company with a diversified portfolio and justified its move away from pure exposure to gold.

“We believe a diversified portfolio in the form of a resources investment company can deliver everything we have been advocating. We begin the new financial year with renewed vigour and conviction that our rejuvenated strategy will bear fruit for all stakeholders,” he said.

The company said its remaining Tau Lekoa operation continued to generate positive cash flows and announced a strategy to “harvest” the mine’s remaining gold resource.

“Given that losses at both Buffels and Blyvoor have been addressed, Village expects Tau Lekoa and Consolidated Murchison to generate healthy earnings over the next 12 months at current rand gold prices,” he said.