Zim’s Falgold sells off majority shareholding in Venice Mine, maintains HY loss position

Zim’s Falgold sells off majority shareholding in Venice Mine, maintains HY loss position

HARARE, June 30 (The Source) – Resources group Falcon Gold has sold off the majority of its shareholding in Venice Mine near Kadoma to an unnamed investor who will inject $4 million to resume production over a decade after the mine stopped operations.

Executive chairman Ian Sanders said its shareholding in Venice was now at 37,5 percent from 100 percent and that the initial investment into the mine, which was closed in 2002, was made last December.

“In the period under review, the group entered into a Progressive Investment Agreement with an investor with respect to Venice,” Sanders said in a statement accompanying the results on Tuesday.

“This agreement laid out a process wherein the investor agreed to invest equity finance of at least $4,000,000 over a period of time, and with an additional investment bring Venice back into production.”

Falgold’s loss position remained flat at $1,6 million for the six months to March from prior comparative period despite weakening revenue.

Sales of gold bullion stood at $5,3 million from $6,3 million following the closure of Dalny Mine in 2013 while operating and administration costs decreased. The group produced 4,527 ounces of gold during the period under review compared to 4,789 ounces in 2013.

The group bemoaned weak prices of bullion on the international market, royalties, unviable energy tariffs and the country’s “rigid” labour laws for affecting operations.

Canada-listed junior miner New Dawn has an 85 percent controlling shareholding in Falgold. The group also owns Turk Mine near Bulawayo.