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KPMG Building, corner 14 Avenue/Josiah Tongogara Street, Bulawayo (Registered No 303 / 89) (Incorporated in Zimbabwe)

Falgold Shuts Down its Dalny Mine BULAWAYO, September __, 2013 - Falcon Gold Zimbabwe Limited (ZSE: Falgold) (Falgold or the Company), a junior gold mining company, with all of its operations in Zimbabwe, announced that it had shut down its 100% owned Dalny Mine located in the Kadoma region, effective from 30th August, 2013. Dalny Mine employs approximately 900 people, produced 3,816 ounces of gold in the six months ended 31 March 2013, resulting in revenue of $7,004,723 during that period and was projected to generate approximately $13,720,680 for the twelve months period ending 30 September 2013. In 2012 Dalny Mine contributed significantly generating $17,317,061 or 50% of the Falcon Gold Groups revenue. The substantial fall in the price of gold over the last four months, exacerbated by the impact of previously reported operational difficulties at the mine, has resulted in a serious liquidity problem. As a result, the amounts owing to the power utility in respect of the Dalny Mine operations were substantially in arrears, thus causing the power utility to issue a Notice of Disconnection of electrical services to the mine. Without electrical power, the Company cannot operate the mine and was thus forced to shut-down the Dalny Mine operations with most of the workforce being sent on unpaid leave and a small number staying behind for care and maintenance of the closed mine. The Company intends to engage with the creditors of the Dalny Mine operations to craft a plan that will address the mine's outstanding trade payables, which currently total approximately $3.1 million. The mine is expected to remain on care and maintenance until the Company is able to satisfactorily address the financial and operational issues that contributed to its shut-down or until other suitable rescue arrangements are realised. With the elimination of most of the net cash outflow associated with the Dalny Mine operations, the Company is aiming to stabilise its working capital. A major underlying factor contributing to Dalny Mine's current difficulties has been the more than two year delay in the still incomplete approval process for the Company's proposed Plan of Indigenisation, through its ultimate parent company, New Dawn Mining Corp. (TSX: ND). A timely approval of the Plan of Indigenisation had been expected to provide the Company with access to sufficient investment capital to fully fund the development of a cost efficient operation at Dalny Mine. After years of underdevelopment, had an investment program in Dalny Mine been implemented and completed as originally anticipated, Dalny Mine would have been positioned to maintain profitable operations in today's environment of lower gold prices and increasing costs. A combination of further adverse factors, all of which have been previously reported, also contributed to the decision to terminate mining operations at the Dalny Mine. These factors included steadily increasing payroll and power costs and high domestic royalties, taxes and fees, as well as a damaging and costly illegal strike and the lack of full electrical power, both experienced earlier in the fiscal year. Taken together, these specific difficulties, together with lower gold prices, caused significant operating inefficiencies and high operating costs, thus resulting in the operating losses and negative cash flows at the mine over the past several months. As a result of the lower gold price environment, the Company has determined that there may be impairment to the carrying cost of its assets, including Dalny Mine. However, with the volatile nature of the gold price and its recent increase to a range above $1,400 per ounce, the Company expects to quantify the extent of the impairment, if any, as part of its fiscal year-end reporting, at which time there may be additional data available to utilise in performing an impairment analysis. The Company, at all of its mining operations, is under serious pressure to bring operating costs in line with the current gold price regime. In addition, the Company is facing a negative working capital position and hopes this will change positively as soon as the legislative, regulatory and economic environment is adequately addressed. Further, as previously reported, there is heightened uncertainty surrounding the implementation of the indigenisation policies subsequent to the July 31, 2013 national elections. The Company is however continuing its efforts to gain approval for and implementation of a compliant Plan of Indigenisation. With all of these adverse factors, the risk exists that the Company may have to take actions more severe than steps taken so far or currently envisaged, including the temporary or permanent closure of the Company's other mining operations. Further, the Company is currently unable to predict the consequences of an inability to conclude or implement an acceptable Plan of Indigenisation with the Government Authorities, with which engagement will continue.

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