Vatukoula holds strategies held until debt financing in September done

By RACHNA LAL

Vatukoula Gold Mines expects the completion of its debt financing around September-end after which it will fully implement strategies to achieve sustainable gold production targets.
Chief executive, David Paxton, highlighted this as the company released its third quarter update for nine months ended May 31, 2013.
“While we continue to source the financing required to achieve our long-term targets, we do not expect any material changes in our production figures,” Mr Paxton said.
“We anticipate the completion of the debt financing near the end of September, after which we will be able to fully implement our strategy of achieving our long-term, cost effective sustainable gold production targets.”
The revenue for the nine months ending May 31 of £29.3 million (FJ$83.8 million) was lower than the same period last year which was £43.2 million (FJ$123.7 million).

Gold production
and operations
In the three months to May 31 (Quarter 3), the group produced 9005 ounces of gold and shipped 8704 ounces compared to 8861 ounces and 9113 ounces respectively in the second quarter (to end Feb).
For the nine months to May 31, Vatukoula reported lower cash costs at US$151 (FJ$284) per tonne compared to US$185 (FJ$348) per tonne for the same period in 2012.
Mining operations at Vatukoula continue to be limited by capital and cash flow constraints.
Mr Paxton said they have prioritised mining operations on production stoping followed by essential development.
“The programme to open new areas has been maintained, but on a limited basis,” he said.
“Ore production can be maintained in the short term, but development to open new areas must be initiated before our long term production targets can be achieved.”

Long-term debt financing
As previously indicated, Vatukoula has secured £4.5 million (FJ$12.88 million) of working capital finance through an equity placing with oilfield services group DRK Energy Company Limited, at an 88 per cent premium to market.
DRK has agreed to work with Vatukoula Gold Mines to source the required debt financing to fund the company’s planned expansion programme, focused on developing higher grade areas at the mine.
Mr Paxton said: “Quarter 3 production remained at a restricted rate, as we continue work to secure long-term financing.
“We have maintained our policy of carrying out only essential development required for current production requirements and limited long-term development when possible.”

Benefits from expansion
Mr Paxton said cash costs per tonne have remained steady.
“This bodes well for our long-term expansion plan which we expect will enable us to achieve a cash cost per tonne of approximately US$144 (FJ$271) per tonne and a grade of 6.9 grams per tonne,” he said.
“This would result in a cash cost of approximately US$860 (FJ$1619) per ounce.”