adminGold prices have been subdued during the first six months of this year with the yellow metal trading at between US$1 200 and slightly above US$1 600 an ounce.
However, analysts expect the price of gold, which peaked at US$1 920 an ounce last year, to peak at US$1 800 an ounce by year end.
New Dawn announced early this year that it would be implementing various strategies to lower operating costs. The company, which employs approximately 3 000 people, said the gradual decline in gold prices has had a significant and increasingly negative impact on its mining operations, profitability and operating cash flows.
The company said initially if any of its mines was unable to attain and maintain operations at a cash breakeven level in the short-term under the current operating and business environment, that particular mine would be placed on care and maintenance. Some of the cost-cutting measures introduced include cessation of all capital development projects except those that need to be commissioned in and or to sustain operations for the next six months.
“If the aforementioned measures are not sufficient to enable the company to operate its mines in a commercially viable manner and generate sufficient operating liquidity, or if the world price of gold continues to decline further, the company may be forced to consider shutting down its operations, either temporarily or permanently, and or liquidating its assets in a formal or informal arrangement.”
Another cost reduction strategy being pursued included negotiating temporary price reductions from suppliers for various critical supplies ranging from 5 percent to 15 percent.
New Dawn recently reported a 4,7 percent increase in gold production for the second quarter of this year compared to the same period last year. — New Ziana.
Online Reporter