Falcon Gold considers shutting down mines

Falcon Gold considers shutting down mines

By Chipo Musoko, HARARE, Sept 5 (The Source) – Falcon Gold may permanently shut down its remaining mines in the country due to viability challenges and uncertainty surrounding implementation of the empowerment law, the company said on Thursday.

In a statement to shareholders, the gold miner cited a decline in the gold price and electricity debts as factors compounding its existing operational problems.

“With all of these adverse factors, the risk exists that the company may have to take actions more severe than steps taken so far or currently envisaged, including the temporary or permanent closure of the company’s other mining operations,” Falcon said.

Falcon Gold also owns Venice Mine in Kadoma and Golden Quarry mine in Shurugwi.

The price of gold has fallen from about $1,700 an ounce in September 2012 to below $1,400 per ounce currently.

Last week, Falcon’s parent company, New Dawn Mining shut down its Dalny Mine in Kadoma and placed its 900 workers on unpaid leave due to operational constraints.

The mine was put on care and maintenance while New Dawn looks for buyers or joint venture partners.
Dalny owes $3.1million to creditors, chief among them the power utility, ZESA, which issued a notice to disconnect power from the mine.

The company said it was unable to attract investment as it had suffered a two-year delay to have its indigenization plan approved.

The law requires foreign firms to cede 51 percent of their shares to local blacks.