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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (5668)	8/23/2007 10:46:13 AM
From: LoneClone	Read Replies (1) \| Respond to of 194794

Simmer & Jack Reduces Losses and Increases Production in Q2 By Lindsay Williams 22 Aug 2007 at 11:10 AM GMT-04:00 resourceinvestor.com JOHANNESBURG (Business Day) -- Simmer & Jack shows a 21% increase in gold production, reducing losses from R96.5 million (US$13.3 million) in the previous quarter to R52.3 million (US$7.2 million) in the quarter ending June 2007. Classic Business Day talks with Simmers chief executive Gordon Miller. LINDSAY WILLIAMS: Simmer & Jack’s quarterly numbers came out today showing a 21% boost in gold production, and that helped the emerging metals company narrow its net loss by 45% - so it’s still losing but that’s down from R96.5 million in the March quarter to R52.3 million in the June quarter. On the line now is Gordon Miller, the chief executive. You’re still losing money Gordon, but obviously a lot less than before. What does the future hold? GORDON MILLER: We certainly anticipate losses going forward as we develop our projects. As far as turning cash positive, we’re looking in the Simmers gold business for that turnaround by March of 2008 and to have First Uranium [TSX:FIU] cash positive by March 2009. LINDSAY WILLIAMS: The share price itself has been a bit of a rollercoaster ride - nothing to do with you of course. The market liked these numbers today - that’s what I liked - and the share price was up 8.5% today. There’s been some worries about the gold price, there’s been some worries about the uranium price and let’s face it - that’s what we’re talking about here. Let’s start with the uranium because a lot of people are a little bit unclear on the uranium market. The price came down for the first time for a while because of a de-stocking by the U.S. government and also a bit of a nuclear scare in Japan. What is the current state of the uranium market? GORDON MILLER: The spot market trading refers to contracts that are entered into over relatively short periods of time. There has been additional supply coming into the market, which has put pressure on the price. However, the fundamentals for uranium remain very good in the medium term and particularly in the long term as more and more reactor builds come on line and as more and more uranium is required. Fundamentally, mine supply still way short of the demand required to fulfil the growth in nuclear energy generation, so it’s looking very good from that perspective. Our key focus is to become low cost producers that we can manage the situation where you get the market going against you in terms of sale price. LINDSAY WILLIAMS: Low cost being how much per pound? We look at it in per pound terms in terms of uranium. GORDON MILLER: We have dual products - we have gold and uranium - so if you do it on a co-product basis you’re looking at $220 per ounce and $20 per pound for Buffelsfontein and $300 per ounce and $30 per pound for Ezulwini. If you do it on a byproduct basis - where you credit the one against the other - then the cost of uranium is negative in the case of both operations. If you credit uranium to gold then you’re looking at gold cash costs of about $90 an ounce at Buffelsfontein and about $200 an ounce at Ezulwini. LINDSAY WILLIAMS: I must say that the gold price has been one rock during the recent market turmoil - it’s currently trading just below $660 an ounce in New York. It’s been between $640 and $690, I suppose, for the last three to four months. The headline in your results announcement today is that you’ve had a 21% boost in gold production and that’s helped you. This was a written-off gold asset that you took on a little while ago - is gold now becoming the big focus for you? I don’t want to say that uranium isn’t, but is gold starting to become more important to you? GORDON MILLER: We have two key focus areas. Obviously our subsidiary First Uranium produces both gold and uranium, and it’s on a solid growth trajectory. As far as the Simmers gold business is concerned, yes, we have very significant resources. The key focus there is to improve infrastructure - invest heavily in infrastructure - which will improve efficiencies and get our unit costs down, and at the same time to explore and increase our higher grade reserve base so that we can track down the cost curve going forward. LINDSAY WILLIAMS: Talking about the cost curve, certain other high profile miners have had significant problems with costs - how are you managing them? GORDON MILLER: It remains a very challenging environment in the resource sector where we’re seeing a significant demand for all sorts of materials - and the same applies to skills. Obviously that’s pushing the price up, so it’s particularly challenging at this point in time. Our focus is to invest in infrastructure, increase volumes and thereby reduce unit costs. LINDSAY WILLIAMS: The Simmer & Jack share price was R4.71, up 8.5% and the best performer of that class of stock on the JSE today.