eBusiness Weekly
Enacy Mapakame
Mining firm, Falcon Gold Zimbabwe Limited (Falgold), widened its net loss for the year to September 30, 2018 to US$4,8 million compared US$684 074 in the prior year on a myriad of operating challenges.
During the period under review, gold sales plunged 51 percent to 78 kilogrammes compared to 159kg in the prior year on the back of a prolonged industrial action at one of its mines.
The company has faced operational challenges such as industrial strike at its at Golden Quarry Mine, which resulted in operations of both Golden Quarry and Camperdown mines severely flooded, while critical equipment was damaged, both on surface and underground.
Operations resumed on March 16, 2018 and employees returned to work having to start the long process of de-watering the mine shafts and making surfaces operational again.
“With no operating cash flow, and a single operating mine, the start-up of the mine complex was slow, costly and laborious,” said Falgold.
The Golden Quarry plant was started in April 2018 and has been operating at a reduced throughput due to damages sustained to equipment during the industrial action.
The mining firm also battled power supply challenges due to non-payment of bills.
As a result, Falgold recorded subdued gold production especially during the second quarter of the year under review.
However, net operating loss for the year under review narrowed to US$3,2 million from a net operating loss of US$5 million in the prior year.
Falgold attributed the decline in net operating loss to reduced mineral production costs due to the termination of a major mining contract.
Revenue for the period under review remained almost flat at US$46,8 million, generated from the mill at Golden Quarry Mine and the sand processing plant at Wanderer Mine, which also assisted the group’s cash flows.
During the period under review, the average gold price realised was US$1 277 per ounce as compared to US$1 243 per ounce an increase of 3 percent.
Gold price remained subdued in the 2017-2018 period although an upward trend is projected in the 2019 fiscal year.
Mineral production expenses went down 20 percent to US$8 million while general administration expenses rose 16 percent to US$1,29 million. Capex incurred amounted to US$321 011. In May 2017, Falgold sold its Dalny Mine which was a main source of revenue, to RioZim Limited.
The proceeds of the sale generated a gain of US$4 million for the year to September 2017 and this supported the mining firm complete its various projects that are anticipated to help increase throughput.
While there have been no major improvements in the macro-economic environment, management remains upbeat if funding requirements are met from parent company, critical repairs of equipment will be done which will result in the re-opening Golden Quarry Mine.
