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Speaking to miningne.ws’ Reggie Sikhakhane, Village Main Reef‘s joint CEO Marius Saaiman confirmed that the company is looking to sell its Palaborwa-based antimony and gold operation, Consolidated Murchison in an effort to capitalise on its profits thus far.

“We have consistently said to the market that our strategy is to acquire assets through smart transactions, return them to profit-making operations. Once we have created value, our strategy has always been to -sell them on again. We acquired Consolidated Murchison through a smart transaction, we have positively impacted on it and made it profitable and believe that now is a good time to sell the asset and lock in the value that we have created for our shareholders.”

miningne.ws recently reported that the company expected to make an announcement in June this year regarding the possible nature of the transaction.

With regards to its struggling Buffelsfontein mine, Saaiman admitted that the option to shut its operations is at an advanced stage, pointing out that the asset had failed to make expected profit. Buffels has made losses in eight consecutive quarters and as the manager and owner of the asset one cannot continue to invest in an operation that continues to make losses.

The Buffelsfontein mine has been hit by a number of operational challenges and continued to run at a loss with the cost of producing a kilogram of gold falling to R502.182/kg from R602.376/kg. Safety related stoppages and unprotected strikes have significantly hampered recovery at the mine as well.

Regarding the rest of Village Main Reef’s asset portfolio, Saaiman cemented the company’s current standing. “Looking at our portfolio, we have consistently made it clear to the market that we are not big enough to develop our Lesego platinum project and would need a strategic investor to buy into the asset and financially contribute towards it. Selling that asset in the current environment however makes very little sense given that it is unlikely we would attract the desired interest or pricing that would make us look smart,” he explains.

Looking at the remainder of its assets, Saaiman noted that it was unlikely that the company would sell its Tau Lekoa gold mine which it acquired from AngloGold Ashanti last year, while its Blyvooruitzicht operation (acquired from DRDGold) remained part of its future plans. We are still very confident with the Blyvooruitzicht acquisition and will most likely continue to operate these two mines.

He says that amid current events at Village Main Reef, they are looking at other ways of extracting value for its shareholders. We have indicated that we would like to diversify and divert exposure away from gold assets. We have identified the coal industry as a strong target and are currently looking at a number of opportunities in the junior coal sector, Saaiman concludes.

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