Business Reporter
AFRICAN Consolidated Resources has offered $8 million to acquire Dalny Gold Mine, a division of Falcon Gold Zimbabwe in the Midlands province of the country.
Dalny Mine is currently non-operational and was fully impaired in the Falgold’s 2013 statement of financial position, the Bulawayo based company said in a statement.
“The directors of Falcon Gold Zimbabwe Limited wish to advise all shareholders that the company is currently engaged in discussions with Africa Consolidated Resources Plc to dispose of the assets and liabilities of Dalny Mine, a division of Falgold,” the company said.
The terms of the transactions include full settlement of all known trade creditors of Dalny Mine, full settlement of unpaid wages and a full settlement of any capital gains tax or other tax liabilities due to the Zimbabwe Revenue Authority. The balance of funds ($2,5 million) after these payments will then be remitted to Falgold.
In 2012, when Dalny Mine was operating normally, Falgold got half of its revenue from the mine. Falgold opted to close the mine at the end of August 2013 and placed it on a care and maintenance basis after Zesa disconnected power supplies over non-payment.
About 900 workers employed at the mine were sent on unpaid leave. Operational issues encountered in the final quarter of 2012 spilled into the financial year, resulting in loss for five months.
This was followed by an illegal labour stoppage and the fall in international gold prices worsened cash flow situation at the company.
Executive chairman, Mr Ian Saunders said the major factor contributing to Danly’s operational issues was the two-year delay in approving Falgold’s indigenisation proposal.
“A timely approval of the plan had been expected to provide the company with access to sufficient investment capital to fully fund the development,” said Mr Saunders.
“Had an investment programme been implemented, Dalny would have been in a position to maintain profitable operations in today’s environment of lower gold prices and increasing costs.”
African Consolidated Resources has over the last decade, raised more than $70 million, with the majority of that capital being put into the development of mines in Zimbabwe.