Falgold narrows loss

Published: 02 July 2018

Zimbabwe Stock Exchange-listed gold producer, Falcon Gold (Falgold), has narrowed its losses to $1,68 million in the half year to March 31, 2018 compared to $2,4 million in the same period last year.

However, the gold miner remains concerned over the current high tax regime that has left many miners struggling to survive.

"…we unfortunately continue to see no positive change in the fiscal and base cost environment for gold miners," the group's chairperson Ian Saunders said.

"The tax regime remains unfavourable and power tariffs remain unacceptably high, even though at various times the Chamber of Mines has been assured that gold mining electricity tariffs would come into line with those enjoyed by other sectors in the mining industry," he said.

The Falgold boss, however, believes that the coming in of the new political dispensation will help steer Zimbabwe's economy into the right path.

"Nonetheless, we have started to see some positive changes in the policy and economic environment for mining in Zimbabwe, and we hope that these new developments will have a meaningful impact on these long outstanding matters.

"With the recent change to the indigenisation laws, together with various policy pronouncements, it appears that there is an increasing investor appetite for Zimbabwe for the first time in many years. These positive changes, coupled to government addressing the high gold mining power tariffs, and the unfavourable tax regime, could see a significant growth in the gold mining industry in Zimbabwe, but until these key factors are addressed, the viability, and hence attractiveness, of the gold mining industry in Zimbabwe will remain sub optimal," he added.

With the difficulties described above, Sanders noted, the group has been unable to do any exploration in the last six months, but hopes to do so in the latter part of the 2018 calendar year.

The group produced 1 920 ounces of gold for the six months period at an average sale price of $1 321 per ounce on the sale of 1 964 ounces of gold) as compared to 2 970 ounces of gold for the 2016 comparable period.

In the period under review, gold production decreased by 1 050 ounces or 35,4 percent while mineral production expenses increased to $3 707 570 for the six months to March 2018, as compared to $5 625 253 in 2017.

Saunders further indicated that with the upgrades of the equipment essentially complete, and with both Golden Quarry and Camperdown Mines now fully operational, "there is a reasonable expectation that the company will overcome the current adverse operating and financial circumstances".

- The Financial Gazette

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