RE: Hind sight is 20/20 :o) !!JOHANNESBURG (miningJOHANNESBURG (miningweekly.com) – JSE-listed Simmer & JackMines’ (Simmers’) gold output fell by 13% to 29 040 oz in the thirdquarter of the financial year, compared with 33 301 oz in the secondquarter of the year.
The gold-miner noted that the drop inoutput in the three months ended December 31, 2009, was as a result ofthe shaft rationalisation process at its Buffelsfontein mine, as wellas a shift in focus to more profitable ounces.
Revenues fell by 3% to R238-million, compared with R247-million in the second quarter.
“Despitea challenging period there were some positive developments. Costs aregoing in the right direction and the focus at operational level isfinally beginning to shift from tonnage to grade in our bid to mineprofitable ounces, even if it means producing less gold.Buffelsfontein, which currently produces around 92% of Simmers’ gold,will see a return to profitability in March 2010, barring unforeseenglitches,” CEO Deon van der Mescht commented in a statement.
Outputat the Buffelfontein mine fell by 13% to 26 947 oz, compared with 30961 oz in the previous quarter, while output at the Transvaal GoldMining Estates fell by 255 oz quarter-on-quarter.
Simmersexpected gold output at Buffelsfontein to amount to between 23 800 ozand 25 700 oz in the fourth quarter of the year, assuming that theintegration of the Tau Lekoa mine did not occur in the fourth quarter.
Thejunior gold-miner noted that it had reached an agreement with AngloGoldAshanti to extend the interim contract period for the Tau Lekoa mine toSeptember in order to accommodate further delays in the permittingprocess.
Simmers had submitted an application to the Departmentof Mineral Resources for the transfer of the mine during the secondquarter of the year, but now only expected this to be approved during2010.
Meanwhile, the gold-junior noted that an updatedlife-of-mine plan for Tau Lekoa had been completed and was undergoingindependent verification.
The acquisition also included theWeltevreden resource, which would significantly extend the life of theTau Lekoa operation to 2024.
Simmers expected a prefeasibilitystudy on the 2,3-million ounce project to be completed by the firstquarter of the 2011 financial year.
FIRST URANIUM
Meanwhile,van der Mescht said that Simmers was willing and able to participate inthe recapitalisation of its subsidiary First Uranium, subject to thevalue proposition being proven.
Earlier this month, FirstUranium CEO Gordon Miller reported that the uranium-miner was facing“significant challenges” in terms of its funding requirements forcurrent and future financial commitments.
At the time, Millersaid that First Uranium was in the process of trying to securealternative funding to meets its needs, noting that it could require upto $100-million in cash.
First Uranium’s need to raise capitalto fund the operating losses at its Ezulwini operation and to fund thecapital expenditure programme at Mine Waste Solutions had become“critical” during the third quarter of the 2010 financial year.
Whilethe company had prepared to commit itself to one financing option inJanuary, the North West Department of Agriculture, Conservation,Environment and Rural Development’s decision to withdraw theenvironmental authorisation (EA) for a new tailings storage facility(TSF) at MWS had interrupted these plans.
“The withdrawal of theEA not only caused a delay in the construction of the TSF, it has alsodisrupted the advanced financing options, and along with the muchslower-than-expected production build-up at the Ezulwini Mine, hasseverely compromised First Uranium’s financial position,” the companysaid.
Edited by: Mariaan Webb