18 May 2017

Zimbabwe: Falgold Calms Nerves

FALCON Gold Zimbabwe (Falgold) has come out guns blazing following reports that nine bars of gold bullion worth US$5 million had gone missing from its safe, saying what went missing were in fact nine lots of gold shavings, worth less than US$40 each, which were samples from gold bullion delivered to Fidelity Printers and Refinery.

The Company secretary, Qubeka Nkomo, this week said the matter arose after their chief assayer, Happison Sigauke, who has since been dismissed from Falgod, was still in charge of their metallurgical laboratory at Dalny Mine.

Among many other functions, the laboratory conducted tests to determine gold content in the various stages of gold production from unprocessed ore up to determining the fine gold in smelted bullion at the mine before it was shipped to Fidelity Printers in Harare.

"As the standard procedure with major gold producers, after smelting and before the gold bullion is shipped to Harare, a drill bit is used to obtain some shavings off the smelted gold bullion. The shavings, invariably weighing less than one gramme, are packed in a small plastic pouch and stored in a safe in the laboratory. One gramme of gold currently has a value of US$40. The shavings are stored in the safe for use in resolving any disputed assay results at Fidelity should there be determination of fine gold in the gold bullion significantly different from the mine's expectations," said Nkomo.

"After an accumulation of the gold shavings over a period of up to 10 weeks, the shavings are taken out of the safe and re-smelted, together with the gold production of that week. The aggregate value of shavings collected over such a period would be negligible," he added.

Chief executive officer, Jack Murehwa, said when the inspections were done, nine gold shaving samples worth US$40 each were found missing, giving a total value of US$360.

He said the process of gold smelting at the mine, including the collection and re-smelting of the accumulated gold shavings, was done under the direct oversight of a representative of Fidelity Printers, a unit of the Reserve Bank of Zimbabwe.

"It was on one of these days when Mr Sigauke failed to account for the absence of the gold shavings from a safe where only him had the key to the safe. For that gross incompetence, Mr Sigauke was dismissed from the employ of Dalny Mine. Mr Sigauke then appealed against his dismissal all the way through to the Supreme Court, where his appeal failed. The suggestion, therefore, that Falgold lost gold worth millions of dollars is untrue. The further suggestion that Falgold hid such a loss is equally untrue," reads part of the statement.

Last week, the Financial Gazette carried a story suggesting that the company lost nine gold bullion bars in 2012.

Regrettably, while the story was based on a Supreme Court judgment (CZ18-17) in a case in which Sigauke was challenging his dismissal over gold that was reported in the court papers as having gone missing, the fact that these were gold samples that had gone missing had been misunderstood and this has now been clarified in Falgold's report as merely nine lots of shavings worth US$40 each.

The Financial Gazette sincerely regrets any inconveniences that this misunderstanding may have caused on Falgold's repute.

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