Gold and uranium producer Simmers & Jack (Simmers) has announced plans for the creation of a diversified mining company and has reported increased revenue in the quarter to December, compared with the previous quarter.
Simmers and gold miner Village Main Reef yesterday requested shareholders to consider a merger between the companies that would create a diversified mining company with exciting asset growth potential and new business development capabilities.
Simmers yesterday announced that revenue for the quarter to December rose by 42 percent to R463 million, compared with R327m in the previous quarter. In the quarter to June revenues were at R158m as production from its gold mine Tau Lekoa in North West was not included.
The majority of the increase was due to accounting for Tau Lekoa production and sales for three months, while R17.9m was due to a 5 percent increase in the rand/gold price per kilogram.
Marius Saaiman, the chief financial officer and interim chief executive, said: “Simmers delivered a solid set of results this quarter with gold production increasing by 34 percent.
“This was largely as a result of accounting for Tau Lekoa for the full quarter, our focus on operating efficiencies and sharing operational benefits between our two operations combined with good cost control”.
The company’s average underground grade increased from 3.21g per ton (g/t) to 3.54g/t. Cash operating profit increased to R86m, compared with R7.9m last quarter and a loss of R55m in June.
Gold production increased 34 percent to 1 529kg from 1 139kg last quarter and 17 599kg at June 30, as the company focused on its objective of reducing general costs and completing the restructuring of the Tau Lekoa and another North West mine, Buffelsfontein Gold Mines (BGM) through increased production at sustainable grades.
Operational free cashflow after capital of R31.8m was generated during the quarter, with Tau Lekoa contributing a profit of R34.5m, while BGM incurred a loss of R2.7m.
Fourth-quarter cashflow dropped as a result of a slow start-up of production at both BGM and Tau Lekoa last month.
Simmers shares rose 2c on the JSE yesterday to end the session at 94c. - Business Report
