Can Veris Gold Survive? ....................... .....................
I see Veris Gold announce 4Q12 and full year results last week - curiously they were "unaudited" results.
Veris reported a a loss of ~$28M for 2012 versus a gain of $26M for 2011.
While ounces produced were up 105K oz vs 67.7k oz, Cash Costs for the year were $1,358/oz and 1,034 for 4Q.
Masking VG's true performance was a $31.8M write down of their Yukon property, Ketza River.
So in essence, VG becomes/remains a one-mine operation. So far this company has been struggling to survive with equity issues. loans and gold forward hedges over the last 5 years trying to survive and comply with a Consent Decree with the NV Environ Regulators.
So one looking at the results has to wonder if indeed the corner has been turned with this company? Minds are likely skeptical. If it has indeed turned the corner, and is viable for good cash flows, one might wonder if it stands a chance as a stand-alone company with a single mine?
Aurizon didn't last, would Alamos be interested in VG? How about ANV another one-mine company in NV, I think they have some refractory ore that needs processing? Then again, NEM has sent concentrates or ore to the old YNG for toll milling, so perhaps they see some utility?
But with the "new mandate" in the mining sector, one can be sure that what happens next with VG depends on its ability to generate free cash flow in spite of some heavy hedge burdens.
We'll see.... |
