Canadian gold mine runs out of money in Vietnam

      The Phuoc Son gold mine in the central province of Quang Nam. Photo by VnExpress/Son Thuy

It remains uncertain, at this point, when the cash-strapped goldmine will resume digging.

Canada’s Besra Gold Inc has suspended operations at the Phuoc Son gold mine in central Vietnam, again.

According to Nguyen Manh Ha, chairman of Phuoc Son District in Quang Nam Province, the company lacks sufficient funds to continue work.

“The company is trying to mobilize more capital but it hasn't said when operations at the mine will resume,” Ha said.

Besra paid more than VND120 billion ($5.2 million) in taxes to the province since it reopened the mine in August, said Le Mai Khac Hung, deputy director of Quang Nam’s Tax Department.

Besra Gold had previously suspended operations at Phuoc Son and the nearby Bong Mieu mine in July 2014, citing coercive measures taken by the Quang Nam Tax Department.

The company subsequently announced that it would resume work at the Phuoc Son mine after VietABank provided a guarantee to the local tax department, and its local partner, Vaco Gold Co Ltd, contributed essential capital for the resumption of operations and payment of local creditors.

Phuoc Son is one of the biggest gold mines in Vietnam and boasts and estimated reserve of 30 tons.

Besra owes some VND430 billion (nearly $19 million) in back taxes on its Phuoc Son Mine, according to comments made by Dinh Van Thu, chairman of the Quang Nam People’s Committee, during a meeting held in early July.

By June 30, 2014, the Phuoc Son mine had lost $16 million while the Bong Mieu operation had reported accumulative losses of $30.1 million and short-term loans of VND1.14 trillion (over $51 million).

On the same day, Besra Gold, which also owns a gold mine in Malaysia, reported an overall loss of nearly $46 million and outstanding short-term loans of VND2.5 trillion (over $112 million).

By Son Thuy / VnExpress