Harare – Troubled gold mining and exploration group, Falcon Gold Zimbabwe Limited has reported a widening of consolidated loss to ZW$27.2 million translating to -$0.245 per share for the half year ended 31 March 2019.
The Group had posted a loss of ZW$1.7 million (-$0.01 per share) in the same period last year thus representing a growth of 1519%.
“The increase in total comprehensive loss is mainly due to foreign currency exchange losses amounting to $23 917 228,” the Group’s chairperson Ian Saunders said in a statement accompanying the financials.
The Group produced 1 849 ounces of gold during the period under review at an average sale price US$1 350 per ounce on the sale of 1 961 ounces of gold as compared to 1 920 ounces in the prior comparable period at an average price of US$1 321 per ounce on the sale of 1 964 ounces of gold.
Gold production in the period under review decreased by 71 ounces (3.7%) in 2019 as compared to same period last year.
Compounding the slump in production was “a catastrophic” engineering failure of the main operating mill at Golden Quarry Mine as well as the on-going power cuts.
“As a result of this and other cash flow challenges, the Golden Quarry Mine has not been operational,” Saunders said.
“Management has undertaken a full assessment and is evaluating various options to deal with the situation including either repair, refurbish or outright replacement of the mill.”
Mineral production expenses increased by 41% to $5.2 million which is representative of -183.70% of revenue compared to $3.7 million in the same period last year.
General administrative costs increased by 46% in the period under review as compared to the previous year.
“These costs increased to 16.51% of mining and processing costs for the six months ended 31 March 2019, as compared to 15.91% of mining and processing costs for the six months ended 31 March 2018,” Saunders said.
He said discussions with the company’s majority shareholders regarding the funding required to execute the 2019 Budget are on-going.
“Management is currently working hard to ensure that as soon as funding is received and some minor repairs to the plant undertaken, the Golden Quarry Mine will resume operations,” he said.
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Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment. He can be contacted through the following email links, email@example.com and firstname.lastname@example.org.