Falgold remains in red, considers shutting down Turk Mine

Falgold remains in red, considers shutting down Turk Mine

By Plaxedes Sibanda, HARARE, June 29, (The Source) – Resources group Falcon Gold has posted a loss of $351, 000 for the six months ended 31 March 2016 due to high maintenance costs at its closed Dalny Mine.

The group incurred care and maintenance cost amounting to $1,5 million for the Chakari mine, which it shut down in 2013.

“Dalny mine … incurred care and maintenance costs for the six months ended 31 March 2016 and 2015 of $812, 680 and $699, 948 respectively which have been included in the Total Comprehensive Loss reported. These care and maintenance costs were offset in 2016 by the rental of Dalny Mine processing plant,” said Falgold in a statement.

The group’s gold production also slumped by 18.5 percent to 3, 687 ounces compared to 4,515 in the previous year.

Mining and processing costs fell to $5 million compared to $6 million.

In April this year, Falgold leased out its Palatial Gold’s processing plant and the area surrounding it to RioZim Limited for a period of nine months under a renewable operating lease agreement.

“During the six months ended 31 March 2016, the processing plant at the Dalny Mine was rented to another mining company, and this toll treatment agreement has generated income greater than the care and maintenance costs of Dalny Mine,” said Falgold on Wednesday.

Falgold said it has stopped exploration activities and is still considering shutting down its remaining mining operations, Turk Mine near Bulawayo.

In June last year, it sold off the majority of its shareholding in Venice Mine near Kadoma to an unnamed investor.

“The group may be forced to consider shutting down its remaining mining operation, either temporarily or permanently, placing one or more of the Group’s assets under court protection from creditors, and/or liquidating the group and its assets in a formal or informal arrangement,” said miner.

Canada-listed junior miner New Dawn has an 85 percent controlling shareholding in Falgold.