Dewatering of Besra Gold’s Bong Mieu gold mine in central Vietnam is advanced and mining operations are expected to recommence by the end of May. Operations have been suspended since November 2013 due to the impacts of several typhoons.
Dewatering of the flooded mine began in March, immediately after the road repairs were finished. By mid-May approximately 75% of the volume and approximately 50% of the height of the flood had been pumped out.
During the March quarter there were 3943 ounces of gold produced from the Phuoc Son operations with a cash cost per ounce of US$1452 and all-in sustaining costs of US$2085 per ounce.
Costs were higher than budget and production was significantly below budget. As a result the company is revising its production guidance for the 2014 financial year to 31,000-34,000 ounces. The company is expecting production in the 2015 financial year from the two Vietnam operations to resume to 2013 levels or better.
Besra has continued to reduce cost of sales with a decrease to $5.6 million in the quarter, compared to $10.7 million in the comparative period the previous year. However on a per ounce basis there was a 59% increase largely due to significantly the lower denominator of ounces sold. An increase in gold inventory and cost of settling the gold loan also contributed to the higher unit cost.
The company has received notice of the repeal of a $12 million export tax assessment, which had been a root cause of much of the hardship of the last 12 months. Recovery from the ramifications of the assessment will continue to take some months.
Importantly, Besra representatives are in advanced negotiations on a range of capital raising options, both for easing the current liquidity issues and also the funding of its Bau project in Malaysia. Bau continues to be the shining light at the end of the tunnel, and the company is very hopeful of making an announcement soon on the commencement of development there, once project financing is complete.