The Herald (Harare)

15 February 2011

Zimbabwe: Increased Gold Sales for New Dawn

NEW Dawn Mining Corporation's local gold mining operations through Central Africa Gold recorded their highest quarterly consolidated sales and production in the December quarter.

According to its latest quarterly review, the company recorded a 62,7 and 48,4 percent increases in gold sales and gold production, respectively.

President and chief executive Mr Ian R. Saunders said the increase in production was in line with plans to reach a consolidated production run rate of 38 000 to 40 000 ounces of annualised gold production by year end.

"I am very pleased to report record gold production and sales for the quarter ended December 31, which is a clear indication of the growth that our expanded portfolio of gold mining operations in Zimbabwe is capable of supporting.

"Our primary goal is to steadily increase monthly production to reach annualised run rates of 38 000 to 40 000 ounces of gold by the end of calendar 2011," he said.

New Dawn increased its interest in Central Africa Gold to approximately 95,2 percent as at February 10, up from 89,9 percent in December and 88,7 percent previously.

The gold producer has reported a 62,7 percent increase in quarterly consolidated gold sales to US$6,46 million in the quarter ended

December 31, up from sales of US$3,97 million recorded the quarter ended December 31 2009.

Consolidated gold sales for the quarter ended December 31 totalled US$6 458 735 at an average price of US$1 370 per ounce. This compares favourably with US$3 969 038 realised for the previous quarter at an average price of US$1 101 per ounce, an increase of 62,7 percent.

At the same time consolidated sales for the period under review increased by 27,6 percent, compared to US$5 059 903 for the previous quarter.

The boost in gold sales was largely driven by increased consolidated production, which saw the firm producing 4 808 ounces during the period, as compared to 3 239 ounces in the December 2009 quarter.

This translates to a 48,4 percent increase in quarterly consolidated gold production for the period, compared to the previous quarter.

The increase in production was a result of greater tonnage mined and processed at the Turk Mine, as well as an increase in production output from the Central African Gold properties.

The company says this increase occurred despite a temporary shaft breakdown at Turk Mine, as well as additional downtime during the quarter due to the festive holidays.

The company says that it has consolidated the operations of CAG for accounting purposes after acquiring an 88,7 percent controlling stake in the company in June last year.

Mr Saunders said the company was seeking ways to reduce cash costs that were negatively impacting on profit margins.

Average cash costs per ounce of gold produced for all mines was US$874 in the period under review, compared to US$580 in the prior comparable period, and US$691 in the September quarter.

New Dawn has attributed the increase in cash costs per ounce to a spate of power outages in October last year.

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