NEW Dawn Mining Corporation has said the uncertainty surrounding the implementation of the indigenisation policy could make it impossible for the government to accept the company’s own compliance proposals.
Announcing the company’s performance for the quarter to March 31 2012 this week, the Canada-based but Zimbabwe focussed miner said its plan to comply with the indigenisation had been designed to establish broad-based economic empowerment structures, while also taking into account the interests of key stakeholder groups.
“The company’s plan of Indigenisation is still under consideration by the government of Zimbabwe. The company is working to facilitate the finalisation and implementation of its plan of indigenisation.
“As there still continues to be substantial uncertainty surrounding the implementation of the indigenisation policy in Zimbabwe, there can be no assurances that the company will be successful in its efforts to comply with the indigenisation laws and regulations under commercially viable terms and conditions, or at all.
“The Company is currently unable to predict the effect of an inability to conclude or implement a Plan of Indigenisation under terms acceptable to all stakeholders and regulatory authorities.”
Zimbabwe’s indigenisation laws require all foreign companies operating in the country to be 51 percent beneficially owned and controlled by locals.
New Dawn’s operating subsidiaries, Casmyn Mining Zimbabwe (Private) Limited, Falcon Gold Zimbabwe Limited and Olympus Gold Mines Limited, are all currently non-indigenous under the relevant legislation and related regulations.
MEawnhile the company said during the period under review, the government received, directly and indirectly, excluding power costs, an amount equal to 16,4 percent of gross revenue for the three months ended March 31, 2013.
In addition, the company says it continued to source approximately 70 percent of its equipment and consumable supplies and services from Zimbabwe-based suppliers.
The company said the challenges encountered during the quarter ended March 31, 2013, particularly at the Dalny Mine, resulted in decreasing operational efficiency during the period.
“During the quarter ended March 31, 2012, operations were adversely impacted by a short-term work stoppage and certain geological, structural and technical mining issues at the Turk and Angelus Mine, and by various previously reported operational issues at the Dalny Mine,” said New Dawn.Advertisement
The Dalny Mine, which the Company acquired as part of the Central African Gold transaction in June 2010, has experienced elevated operating costs for some time, reflecting the company’s efforts to implement its plan to develop sustainable and profitable underground mining operations.
These elevated costs reflect the on-going dewatering process, the continuing program of repair and replacement of underground equipment that had been submerged for a protracted period of time, power issues, labour strife, and the costs associated with ramping up operations, exacerbated by a lack of investment capital as a result of delays in approval of the Company’s Plan of Indigenisation.
“Once the company has completed this process, which is expected to take through the remainder of calendar 2013 and perhaps beyond, subject to the availability of sufficient investment capital, underground mining costs are expected to stabilise and begin to decline. In addition, as the gold production rate increases, the company expects to realise increased operating efficiencies, with an expected corresponding downward trend in cash costs per ounce,” said the company.
Gold production for the quarter ended March 31, 2013 was 9,253 ounces compared to gold production of 8,736 ounces (for the quarter ended March 31, 2012.
Consolidated gold sales for the quarter ended March 31, 2013 were US$14,9 million up marginally on the USS$14,8 million for the quarter ended March 31, 2012, an increase of 0.9 percent.
The average sales price per ounce of gold was US$1,608 and US$1,685 for the quarters ended March 31, 2013 and 2012, respectively, a decrease of $77 or 4,6 percent.