FALCON Gold Zimbabwe (Falgold) says gold production at its two operating mines has slumped due to power cuts and late payment by the Reserve Bank of Zimbabwe
The company said it had lost over US$443 000 because of Zesa’s load shedding. Expansion at the mines has also been halted because of the central bank’s delays in paying for gold deliveries.
Zesa Holdings recently increased load shedding hours after regional power utilities reduced exports to Zimbabwe citing unpaid debts and increased demand in their own countries.
Mozambique’s supplies to the country were reduced from 300 megawatts to 195 megawatts over a US$35 million debt.
Presenting results for the month ended 30 June this year in Bulawayo this week, Falgold Zimbabwe chairman, Greg Hunter, said power outages had affected mining operations resulting in a drop in production levels.
“Production has been lower than anticipated. Continuous shortages mining inputs and interruptions in power have adversely affected mining operations. “Zesa down time during the period under review was total of 763 hours and this equates to an estimated production loss of just over 700 ounces or gold revenue of US$443 000,” Hunter said.
Hunter said that the expansion programmes have been limited during the last six months due to the delays and sometimes non payment by the Central Bank for gold delivered to Fidelity Refineries.
“Due to the non-payment of US dollars earned from gold lodged with Fidelity Refineries the anticipated exploration and development programme to expand mining operations has been limited as the capital earmarked for this has been diverted and used to sustain miming operations.”
Hunter said Falgold has been able to sustain production with a US$1 million loan from the Central African Gold (CAG), the major shareholder in the mining company.
CAG acquired an 85% stake shareholding in Falgold in March this year.
Falgold recorded a pre-tax profit of $7,1 billion. The company is still owed US$506 590 by the RBZ.
Falgold owns Dalny Mine in Chakari, Golden Quarry Mine in Shurugwi and Venice Mine in Kadoma. Venice Mine has been closed for the past three years.