Besra has been granted a renewal of its licence to export gold from Vietnam. The licence, issued by the State Bank of Vietnam, permits the company to export gold from its operations in the central province of Quang Nam.
Besra’s CEO John Seton says, “Despite some spirited debates with various level of government in Vietnam on a range of tax and royalty issues over the last year, we have reached agreement or are nearing resolution on most matters. The retrospective export tax assessment is expected to be resolved in Besra’s favour in the next month.
“We are grateful for the ongoing support of the government of Vietnam for Besra and its current and future operations.”
In a subsequent message to shareholders John Seton said he made the above statement “because I and others in the company have been asked if we think the government is trying to push us out of the country. I don’t think this is that case, and I believe those in government when they say we have their full support.
“Besra has had an extremely tough year in Vietnam where all of our current gold production occurs. As a result we’ve experienced some of the tightest cash-flow in our history. We’ve renegotiated terms with all of our suppliers, pushed out repayment times for creditors and pursued a tough program of internal cost reduction at all levels including difficult but necessary staff reductions. We have further cost cutting moves planned including closing our Toronto office and reviewing the need for some of our listings.
“The greatest issue we faced over the last three quarters was a vexatious tax assessment by the Vietnam General Department of Customs. Although we believe the assessment dispute will be resolved in our favour very soon, we endured several months where we faced almost total import and export restrictions. Despite finding some ways around the ban, it hampered our ability to sell/export gold, but more significantly meant that we could not bring in essential supplies and spares. We simply could not maintain or fix our mining equipment and plant and even though the ban has been lifted, we are still feeling the flow-on effects months later.
“We’ve also had some of the worst weather on record at the end of 2013. Within the space of a month we had a typhoon, a super typhoon and a severe tropical depression pound the central coast of Vietnam. The battering affected production at Phuoc Son, but our Bong Mieu operations had to be suspended altogether on November 16 after more than five serious land-slips or road washouts occurred on the main (and only) supply road connecting our site and the provincial capital. Bong Mieu is still closed although we’re hopeful operations will recommence shortly.
“Low gold prices have exacerbated the problem, and the reduced income from a less-than-planned production has been ploughed into getting our operations back up and running and recovering from the import/export restrictions.
“In Vietnam, our sights are now firmly set on getting production back up to where it should be, generating cash flow and getting the bills paid. To speed this along, we are in advanced discussions with several potential investors to provide a sizeable cash injection,” John Seton said.