Vatukoula’s losses widen on lower gold prices, production

Vatukoula Gold Mines (LON:VGM), owner of the longest producing gold mine in Fiji, said its full-year underlying losses ( EBITDA) widened on lower gold prices and as a lack of capital investment hampered its production plans. EBITDA losses widened to £9mln in the year to end August, from £1.5mln the previous year, as gold output fell 25%. “The continued downward pressure on the gold price has made developing and mining at the Vatukoula Gold Mines very difficult,” the company said. “Moreover the delays in securing the capital investment has prevented the mine from embarking on its growth strategy which in turn lowered production below management expectations.” The AIM-listed company has finalised a US$40mln investment agreement with Zhongrun International Mining that will be used to fund the expansion of its mine. An initial US$20mln was provided last November and the balance, originally due to be delivered at the end of January, will now be provided at the end of this month. VGM also agreed with Zhongrun to form a strategic review committee to examine all aspects of the mine.