adminSenior Business Reporter
FALCON Gold Zimbabwe has hinted on shutting down operations after recording a net loss of $2,42 million for the six months to March 2017 compared to $351.186 recorded in the same period last year.
High operating costs and declining revenue are threatening the viability of the Zimbabwe-Stock Exchange listed mining group, which also recorded a decline in gold output producing 2 970 ounces during the period under review compared to 3 687oz during the comparable period last year.
Falgold, owns Camperdown, Venice, Golden Quarry and Dalny Mine, which was shut down on August 30, 2013.
The group’s revenue declined by 11 percent to $3.66 million from $4.1 million recorded in the comparable period last year.
“The group reported a total comprehensive loss of $2.42 million for the six months ended March 31, 2017, compared to a total comprehensive loss of $351.186 the previous year.
“Dalny Mine, incurred an operating loss for the six months ended March 31, 2017 and 2016 of $786 102 and $677 851 respectively,” said Falgold chairman, Mr Ian Saunders, in a statement accompanying the financial report for the period.
Gold production declined by 19.4 percent to 2,970 ounces compared to 3,687 ounces produced during the same period last year.
“Mining and processing costs increased to $5.63 million for the six months ended March 31, 2017.
Falgold made an operating loss of $2.5 million compared to $820.162 the previous year.
During the period under review, the mining group recorded a negative equity balance amounting to $13.8 million due to an accumulation of losses of $12 million.
Following the disposal of Dalny Mine to RioZim to the tune of $8 million last year, the firm anticipates to finish a number of projects aimed at boosting production.
“Toll treatment at Dalny Mine has been a significant source of revenue for the group, but that revenue source ended with the sale of the mine to RioZim effective May 19, 2017. The proceeds from the sale of Dalny Mine will also enable the group to complete the various projects and it is anticipated that the throughput planned at the mines will see these operations achieving self-sustaining profitability,” said Mr Saunders.
To increase the tonnage of higher grade ore from the mines, he said the long waited project, the 7 level loading station at Golden Quarry and the increased hoisting capacity at Camperdown, were finally scheduled to be commissioned next month.
“With successful commissioning of these two projects and successful mill refurbishment and optimisation, the group’s operations are expected to become viable,” he said.
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