|Falgold seeks US$10m for expansion|
|Friday, 15 June 2012 12:00|
LISTED gold miner Falcon Gold Zimbabwe says it is seeking US$10 million to fund expansion projects as the group targets output growth. The projects will see the restart of the Venice Mine and increasing capacity at Golden Quarry and Dalny mines, the company said yesterday in a statement accompanying its half-year financials to March 2012.
“It is anticipated that the future production growth in the company will come from improved output and grades from underground at Dalny Mine, the restart of Venice Mine and additional capacity being installed at Golden Quarry Mine,” said the Bulawayo-based company.
“Accordingly, the company is currently exploring sources of new funding amounting to approximately US$10 million.”
Falcon owned by New Dawn Mining Corporation of Canada has also embarked on initial exploration programmes at two sites and the results are expected in the next 12 months.
During the period under review, the company realised net income of US$3,15 million against US$0,76 million in the prior comparable period, on higher revenues brought about by continued growth in output at both Dalny and Camperdown mines.
The company produced 9 189 ounces of gold (average sale price US$1 688/ounce) compared with 4 447 ounces (average sale price US$1 471/ounce) in the prior period.
Operating margins improved to 26,4 percent from 21,7 percent supported by the firm international gold price and cost containment.
Administration costs, as a percentage of mining and processing costs, fell to 9,7 percent from 15,8 percent.
The balance sheet showed a negative equity of about US$2,9 million, a reflection of undercapitalisation.
The major shareholders have continued supporting the group with a total shareholder loan of US$10,6 million.
Falgold has vast mining claims and proven gold reserves estimated at above 2 million ounces.
Exploration activity is expected to increase over the next 12 months. With regards to indigenisation, Falcon said it was working on a final plan.
“The company’s board of directors believes that a plan that is compliant with the law, constructed and implemented in a manner that is equitable, socially viable and economically competitive is an imperative for Zimbabwe in general and New Dawn in particular,” said the statement.