BY TATIRA ZWINOIRA
STRUGGLING Falcon Gold Zimbabwe shares have been suspended from the Zimbabwe Stock Exchange (ZSE) following a company request.
In February 2019, following the delay in publicising audited consolidated financial statements for the year ended September 30, 2018 the ZSE suspended trading in Falgold shares.
However, the suspension was lifted in September after the publication of Falgold’s 2018 audited financial results and half-year interim results ended March 31, 2019.
“The Zimbabwe Stock Exchange Limited hereby notifies the investing public of the voluntary suspension from trading in shares of Falcon Gold Zimbabwe Limited with effect from 2 March 2020 pending publication of audited financial results for the year ended 30 September 2019 and a circular to shareholders regarding the proposed termination of listing,” read part of a statement from ZSE.
“At the company’s request, the ZSE sought and was granted permission to suspend trading in Falcon Gold Zimbabwe Limited’s shares by the Securities and Exchange Commission of Zimbabwe pursuant to the provisions of section 64(1) (a)(ii) of the Securities and Exchange Act [Cap 24:25]. In an announcement from the ZSE, the main bourse announced.”
ZSE added: “In terms of Section 9 of the ZSE Listings Requirements, the company should continue to discharge its obligations to the shareholders and the ZSE during the suspension until finalisation of the termination of listing”.
In Falgold’s September 30, 2018 annual statement, the miner reported that there was a “catastrophic” engineering failure of the main operating mill at Golden Quarry Mine, which adversely affected production and cash flows.
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It noted that the termination of power supplies by ZETDC compounded the problem.
As a result of this and other cash flow challenges, the Golden Quarry Mine had not been operational thus adding to the company’s continued loss-making position.
In that regard, management had been working hard to ensure that as soon as funding was received and some minor repairs to the plant undertaken, the Golden Quarry Mine would resume operations.
This caused Falgold’s holding company, the Canadian-based New Dawn Mining Corporation, to give the miner 12 months to clear its significant debt.
“The group sustained losses attributable to the shareholders of the group during the six months ended 31 March 2019 amounting to $27 224 725 (2018: $1 681 348),” said Falgold board representative, Ian Saunders, in the interim half year report ended March 31, 2019.
“The group had a net working capital deficit at 31 March 2019 of $11 329 680 (30 September 2018: $6 748 056) and negative equity of $44 386 023 at 31 March 2019 (30 September 2018: $17 161 298). The group continues to incur losses.”
