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Harare Bureau
GOLD miner, Falgold’s turnover for six months to 31 March, 2013 fell 11,8 percent from $16,3 million in the same period a year ago to $14,2 million due to power cuts and an illegal strike at Dalny Mine. The company posted an attributable loss of $2,6 million and 2,3c per share. Total gold production declined by 16 percent to 8 285 ounces while the amount of gold sold was down 9 percent to 8 817 ounces.
The average selling price of gold eased 3 percent to $1 636 per ounce during the period under review.
Production at Dalny Mine was suspended in January after workers downed tools demanding pay increase.
Mining and processing costs grew by 34 percent to $15,5 million on the back of a 10 percent increase in salaries and wages, unsustainable power costs together with high indirect taxes.
Administration costs were almost flat year on year at $1,1 million. The balance sheet shows a negative equity of $4,6 million, reflecting undercapitalisation.
Nonetheless, the major shareholders continue to support the group with total shareholder loan of $10,6 million.
The company said that future production growth will come from improved output and grades from the underground at Dalny Mine coupled with additional capacity at Golden Quarry.
Nonetheless, these projects require funding in excess of what can be generated from current operating cashflows.
Analysts say access to such funding is expected to be constrained until the indigenisation process has been completed. “In light of the depressed gold price, Falgold will consider restructuring and divestitures as well as operational changes if the gold price continues to ease further,” said one analyst.
Online Reporter
derick.khumalo