SINGAPORE (Feb 1): Gold is an asset class traditionally seen by investors as a safe haven in times of uncertainty. In a twist of luck, CNMC Goldmine Holdings, which was enjoying steady earnings growth earlier in line with rising gold prices, has been hit by the Wuhan virus in an indirect way.
The company said in a Jan 31 statement that its gold mining activities at its flagship Sokor gold field in Kelantan will be disrupted.
This is because more than half of the crew of its 51%-owned subsidiary CNMC Mining Sdn Bhd are from China’s Hubei province, ground zero of this outbreak. CNMC Mining had commenced underground mining at the Sokor gold field in the third quarter of 2019.
Many of these workers flew back to their hometowns in Hubei for the Chinese New Year. As a result of a recently enforced travel restriction between China and Malaysia, these workers are unlikely to return to Kelantan and start work on Feb 3 as scheduled.
“As there is no official word on when China and Malaysia will lift the travel restrictions, the company at this point in time is unsure of the length of absence of these Chinese workers."
“The company remains in regular communication with them and is monitoring their state of health as well as developments in China related to the viral outbreak,” states CNMC.
At the company’s 3Q2019 earnings announcement on Nov 12, it said the extraction of high-grade gold ore via underground mining by the Chinese workers is slated to begin in the current 1Q2020. “This will now be delayed in view of the absence of the returning Chinese workers,” the company says.
However, CNMC’s open-pit mine also at Sokor is operating as normal, as are the processing facilities (picture), as almost all the crew for this mine are Malaysians.
CNMC shares closed unchanged on Jan 31 at 28 cents.
