News Column

Vatukoula Gold Mines' Production Down, Costs Rise

June 13, 2014

Tom McIvor

LONDON (Alliance News) - Vatukoula Gold Mines PLC Friday said its gold production and shipments fell in its fiscal third quarter, and its average realised gold price declined while production costs rose, as it continued to restrict operations while it seeks long-term funding for its gold mine in Fiji and shareholder approval to go private.

The gold producer said its gold production fell to 8,139 ounces for the three months ended May 31 from 9,005 ounces during the same period a year before, while its gold shipments fell to 7,794 ounces from 8,704 ounces.

The company said its total underground tonnes of ore, waste and capital mined also fell to 85,893 tonnes, from 94,793 tonnes, and the amount of ore it processed in total fell to 76,950 tonnes from 100,182 tonnes.

Vatukoula also said the cash cost it received per ounce shipped increased to USD1,938 from USD1,812 and its average realised gold price dropped to USD1,271 per ounce from USD1,474 per ounce.

However, the average ore head grade it received increased to 4.06 grams per tonne for the quarter, from 3.48 grams per tonne, and its total recovery rates increased to 80.89%, from 79.76%.

"As previously advised this quarter's production remained at a restricted rate, as we continue work to secure long-term financing," Non-Executive Chairman Yingbin Ian He said in a statement. "We have maintained our policy of carrying out only essential development required for current production requirements and limited long-term development when possible."

The company said it has begun discussions with some strategic investors in order to fund the additional USD20 million needed to drive on growth in Fiji.

The news comes after the company announced in May that it plans to seek shareholder approval to cancel trading on AIM and go private after it reviewed its business and has decided that the disadvantages of maintaining a listing outweigh the potential benefits.

Vatukoula has been hit by the continued depression of the price of gold, which has led to a fall in the company's value. The company said in May that its ability to raise funds would be hampered by the "susceptibility" of its share price to wider market conditions.

If passed by shareholders, the company would de-list as of July 1, with the last day of trading June 30.

Vatukoula shares were down 5.3% to 2.25 pence on Friday.

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Source: Alliance News

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