JUNIOR Canadian miner New Dawn Mining, which owns and operates several mines in three gold camps within in Zimbabwe, on Friday announced that the empowerment ministry had approved the company's plan of indigenisation.
Under the terms of the plan, four independent Zimbabwean indigenous investor groups and the National Indigenisation and Economic Empowerment Fund (NIEEF) would acquire equity in New Dawn, which were initially not expected to result in significant capital to the company.
A second component of the plan entailed New Dawn giving away 10% equity in each of its subsidiaries in Zimbabwe to community share ownership trusts and 5% equity to employee share ownership schemes, for no monetary considerations.
New Dawn said in order to take account the dilution of its interests in its Zimbabwe subsidiaries by the respective allocations of equity interests as well as meet the additional effective 36% equity ownership in those subsidiaries to be acquired by indigenous Zimbabweans through investment in New Dawn, the total equity interest in New Dawn that would ultimately be acquired by indigenous investor groups and the NIEEF would be 42%.
"The implementation of the plan will require a number of steps and procedures, including amending the company's capital structure to provide for the specific equity interests contemplated under the plan, and eliminating the current minority interests in the company's Zimbabwe subsidiary, Falcon Gold Zimbabwe," the company said.
New Dawn added that the equity interests in the company's Zimbabwe operating subsidiaries that would be transferred to the community and employee groups were expected to provide a direct and broad-based participation in its mining operations by indigenous Zimbabweans.
The company produced 37,623 oz of gold in the financial year ended September 30, 2012, and posted net income allocable to common shareholders of $2.3-millio, or $0.05 a share.
The company's share price dove 23.81% on the TSX on Friday to close at C$0.08 a share. The company had a market capitalisation of C$3.6-million.