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Business Reporter
Canada-based New Dawn Mining Corporation plans to delist from the Toronto Stock Exchange and move its operations in the tax haven of Cayman Islands as part of on-going attempts to cut costs. The Zimbabwe focused company with several gold mines in the country believes the proposal to move the company from a listed company to an unlisted company would result in significant savings.
In a statement to shareholders, the company said the proposal to delist from the Toronto Stock Exchange will be discussed at a special meeting on 31 October.
It said the company apart from the corporate offices, had no assets in Canada whose tax legislation required costly, complex and otherwise unnecessary planning to avoid creating tax obligations while its mines in Zimbabwe were already held through companies incorporated in the Cayman Islands.
The Cayman Islands in the Caribbean Sea have attracted a number of off-shore companies because of its tax-free status.
“Significant improvement to cash flows can be realised through the elimination of the substantial annual cash expenditures related to regulatory and listing compliance, including the filing of interim unaudited and annual audited financial statements, and Canadian corporate governance required to meet the reporting standards applicable to a public company.
“Without the requirement to meet Canadian disclosure and compliance standards, and with only a limited number of shareholders (all of which are sophisticated investors), the cost of the Canadian corporate office could be eliminated and the Board of Directors could be reduced in number, with a commensurate reduction in board fees and costs.
“The company is utilising the remainder of its cash resources to fund corporate overhead and compliance obligations, as well as the matters discussed herein, but the company does not currently anticipate being able to replace such capital when it is exhausted.
“Accordingly, the company currently projects that, absent any dramatic change to its operations or capital structure, it will exhaust its existing cash resources in early to mid-2014 and at that time it will not have sufficient operational liquidity to continue to function as a public company,” said the statement.
The company recently placed its Dalny Mine near Kadoma under care and maintenance after the Zimbabwe Electricity Supply Authority disconnected power over non-payment of bills.
The company, facing a fall in global gold prices, has introduced a host of cost cutting measures at its mines which included slashing of salaries for workers and management for a three-month period.
New Dawn, a junior gold company, owns 100 percent of the Turk and Angelus, Old Nic and Camperdown mines. Through its Falcon Gold Zimbabwe Limited subsidiary, it also owns 84,7 percent of
Dalny, Golden Quarry and Venice mines, and a portfolio of prospective exploration acreage in Zimbabwe.
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