Business Reporter.
FALCON Gold Zimbabwe recorded a net loss of US$12,5 million for the year ended September 2013 after falling international gold prices resulted in a decrease in revenue. The 212 percent loss came against a profit of US$4 million reported during the same period last year.Falgold’s operating loss increased by 58 percent from US$3,9 million recorded last year to US$6,2 million.
“Operating and labour issues at Dalny Mine contributed to both decreased revenues and increased operating costs,” Falgold said in a statement.
The company’s gold sales decreased by 14 percent to 556 kilogrammes compared to 650 kilogrammes during the same period last year.
Mining and processing costs increased by 5 percent to US$29,1 million as compared to US$27,5 million a year earlier.
Administration costs increased by 15 percent to US$2,2 million compared to US$1,9 million recorded the previous year.
Administration charges increased on an absolute basis, mainly because of NEC-mandated increases to salary wage levels. Total assets value decreased by 47 percent from US$18,8 million to US$9,8 million during the period under review.
The company’s equity and liabilities decreased by the same margin of 47 percent to sit at US$9,8 million by the year ending September 2013 compared to US$18,8 million during the same period last year.
Operational issues initially encountered at Dalny Mine in the fourth quarter of fiscal year ended September 30, continued into the early part of the second quarter of fiscal 2013 and caused Dalny Mine to operate at a loss for almost five months. “These issues (of labour unrest) were resolved and Dalny Mine is returning to normal operating levels.
“An illegal work stoppage was undertaken at the mine, as a result of which the company incurred further significant financial losses,” Falgold said.
The mining company said it has initiated an exploration strategy designed to prove the hypothesis that Zimbabwean gold mines can support large-scale, mass mineable, low-to-medium grade operations.
The company intends to restart the exploration work as soon as the liquidity and funding issues are resolved.
Falgold, through its parent company New Dawn Mining said it had now received a formal acceptance of its indigenisation plan by the Government of Zimbabwe and the board of directors was working to implement the various components of the plan.