The Sunday Mail
TROUBLED Falcon Gold Zimbabwe has recorded a net loss of US$1,3 million for the year ended September 30, 2016 mainly due to lower production levels.This has revived calls for a downward review of the electricity tariff to cushion the company from the difficult operating environment. In the same period last year, Falgold recorded a net profit of US$6,4 million.
Executive chairman Mr Ian Saunders said the loss could have widened were it not for lower mining and processing costs, together with lower administration costs.
Gold sales for the period under review plunged by 67kgs, representing 22,5 percent, from the 298kgs recorded in the prior year mainly due to power outages and equipment breakdown.
All gold sales were realised from the group’s only operating mine, Golden Quarry/ Camperdown Mine in Shurugwi.
Mr Saunders believes that if Government tweaked the tax scale and power tariff structure, gold miners would operate fairly viably.
Gold miners want the tariff to be lowered to 8c per kilowatt hour from the current 12,8c/ kWh.
“Implementation of this recommendation early in fiscal 2017 would go a long way in reducing the cost base of the mines, with the possibility of at least going into neutral cash position. Regrettably, implementation of this recommendation remains doubtful, as the power utility seems reluctant to implement the recommendation,” said Mr Saunders.
He said the high cost base, coupled with falling international gold prices, remains a “real and persistent threat to the continued operations of Golden Quarry/Camperdown mine.
Falgold is batting untold operational challenges which have seen it selling its other mine, Dalny Mine located in Kadoma, to RioZim, last year.
Proceeds from Dalny Mine’s sale are expected to be channelled towards accelerating new growth projects being put in place to increase ore production and treatment capacities at the mine in fiscal 2017.
Falgold has also sold off the majority of its shareholding in Venice Mine near Kadoma in a deal worth US$4 million.
The resources group now owns 37,5 percent from 100 percent.
The company was founded in 1991 and is based in Bulawayo, Zimbabwe, and is owned 85 percent by New Dawn Mining Corp.
