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Senior Business Reporter
LISTED mining concern, Falcon Gold Zimbabwe has entered into an agreement with an undisclosed investor who has agreed to inject about $4 million over a period of time to resuscitate Venice Mine in Kadoma.

The agreement would see the group losing 62,5 percent control in Venice.

Falgold chief executive officer Ian Saunders revealed this in a statement accompanying the group’s unaudited financials for the half year ended March 31, 2015 yesterday.

“In the period under review, the group entered into a Progressive Investment Agreement with an investor with respect to the Venice Mine.

“The agreement laid out a process wherein the investor agreed to invest equity finance of at least $4 million over a period of time, and with additional investment bring Venice Mine back into production,” he said.

“The initial investment was made in December 2014, resulting in the group’s loss of control of Venice Mine as at January 1, 2015 (from 100 percent to 37,5 percent).”

The mine was shut down in 2002.

During the period under review, the group recorded a loss of $1.66 million attributable to plummeting international gold prices, among other factors.

Saunders said the loss includes Dalny Mine’s care and maintenance costs.

“The group realised a loss of $1,663,715 for the six months ended March 31 2015, as compared to a loss of $1,659,349 for the six months ended March 31, 2014. Dalny Mine, which was shut down on August 30, 2013 incurred care and maintenance costs for the six months ended March 31, 2015 of $699,948. This amount is included in the loss reported,” he said.

He said the key issue that the group faces was the continued weak world price of gold consistently around and below $1,200 an ounce.

“At these levels, with the current tax regime, rigid labour laws, and the high cost of power, operations continue to be stressed and are being conducted in a constrained manner,” he said.

The group produced 4,527 oz of gold for the period under review compared to 4,789 oz in the same period last year.

The increase in negative margin was predominantly a result of the lower gold price.