Falgold operational woes mount

Business Reporter
THE failure to pay outstanding amounts to foreign creditors since June this year has resulted in key creditors cutting off critical supplies to local mining group, Falcon Gold (Falgold) Zimbabwe.

The situation has crippled mining operations under the group, which has recently been battling subdued business due to a number of constraints, the company admitted.

In a cautionary update to shareholders this week, Falgold, which is listed on the Zimbabwe Stock Exchange, also announced that it was deferring publication of its financial results for the period September 30, 2018 to next year.

Company secretary Mr Qubeka Nkomo advised that as a result of the challenges being faced by Falgold, it was unable to release abridged financial results for the period and advised those trading in the company’s shares to do so with caution.

“The No 2 mill at Golden Quarry processing plant had a catastrophic engineering failure late last week. In the intervening period, management has been undertaking a full impact assessment and is now evaluating various options to deal with the matter at hand,” said Mr Nkomo.

“The inability of gold producers to access foreign currency and the resultant failure of Falcon to pay outstanding amounts to foreign creditors since June resulted in key creditors cutting off critical operating supplies.

“As a consequence of the above issues, the board is in communication with its various advisors on the impact of these matters on the company’s results of operations and financial condition.”

The group did not disclose how much was owed to foreign creditors.The gold miner has been experiencing deep seated operational constraints, which also saw more than 700 workers at its Turk Mine in Bubi district embarking on a month-long strike last year.