Oct. 30 (Bloomberg) -- Village Main Reef Ltd. rose the most in seven weeks after the South African gold company reported record production at its Tau Lekoa mine and restructuring at other operations.
The stock rose 13 percent, the most since Sept. 11, to close at 0.45 rand in Johannesburg on volumes 3 1/2 times its three-month daily average.
“Village is pleased with the production achieved at our flagship Tau Lekoa mine, which showed further improvements on the June quarter,” Chief Executive Officer Ferdie Dippenaar said in a statement. “Our challenge will be to maintain the momentum going into what is normally a difficult time of the year.”
Tau Lekoa’s production was 1,090 kilograms for the period ended Sept. 30, up 33 percent quarter on quarter, Village said. Total production was 1,133 kilograms, a gain of 27 percent.
The losses incurred from putting its Buffels operations on care and maintenance are expected to drop to 7 million rand ($708,000) a month in the current quarter. It halted Blyvoor output after the granting of a provisional liquidation order on Aug. 6.
Cash generated by Tau Lekoa, 156 million rand, was reduced by losses sustained at Blyvoor and Buffels and operating losses at Consolidated Murchison, leaving the company cash neutral, Village said. “Management is confident that this will not be the case going forward as losses from both Blyvoor and Buffels have been addressed and Cons Murch is returning to normalized operational levels.”
Workers held a strike at the Cons Murch gold and antimony mine in Limpopo province in July.
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