22 June 2012

Zimbabwe: Falcon Gold Set to Increase Production

FALCON Gold Ltd's hopes to increase production after its profit quadrupled to US$3,1 million in the half year to March 31 2012, buoyed by resumption of operations at the company's two mines -- Dalny and Golden Quarry.

Company chairman, Ian Saunders, said further growth in production would be spurred by improved output and grades from the two mines, coupled with the increased capacity installed at Golden Quarry mine.

The company produced 9 816 ounces of gold and sold 9 693 ounces at an average US$1 688 per ounce during the period. This compares to 4 447 ounces produced during the same period last year, where 3 821 ounces were sold at an average price of US$1 471 per ounce.

"Net income for the six months ended March 31 2012 was achieved on significantly higher revenues, brought about by continued growth in output at both Dalny Mine and Golden Quarry/Camperdown mines," said Saunders in a statement accompanying the financials.

Earnings per share rose to 2,8 US cents from 0,7 US cents recorded during the previous year.

Administration costs dropped to 9,7% in the period under review, compared to 15,8% recorded in the corresponding period last year.

Non-current assets in the period increased by 54% to US$7,2 million, up from the US$3,3 million recorded the previous year.

The company said it was in the process of raising US$10 million to invest in additional capacity to ramp up production.

Phase one and two of its recovery programme, which stabilised production at Dalny and Camperdown mines, had been completed.

The company said it has embarked on an initial exploration programme as part of its third phase of the recovery programme and initial results were expected in the following nine and 12 months.

The company said it was finalising its proposed indigenisation implementation plan through its parent company, New Dawn Mining.

The government's indigenisation law requires all foreign owned companies with a net asset value of US$1 and above to cede 51% shareholding to Zimbabweans.

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