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Oliver Kazunga Acting Business Editor
FALCON Gold Zimbabwe Limited has remained on the loss making position for the year ended September 30, 2015 due to falling international price of gold and low production levels.

The Zimbabwe Stock Exchange-listed entity, indicated in its audited financial statement for the period under review that it posted a net operating loss of $3.7 million compared to $2.4 million last year.

“The net operating loss for the year was $3.7 million compared to a net operating loss of $2.4 million for the year ended September 30, 2014.

“The group’s increase in operating losses in 2015 were caused mainly by lower production levels, the low and still falling gold price regime and an increase in depreciation and amortisation costs,” said the group’s executive chairman Ian Saunders.

However, on the positive side, lower mining and processing costs together with lower administration costs helped reduce the negative trend.

Gold sales in 2014 and 2015 were realised from the group’s sole operating subsidiary, Great Punch, which operates the Golden Quarry and Camperdown Mines.

“Gold sales for the year ended September 30, 2015 decreased by 14 kilogrammes or 4.5 percent to 298 kilogrammes compared to 312 kilogrammes for the year ended September 30, 2014, due to increased power outages in 2015,” he said.

During the period under review, the average gold price realised was $1,164 per oz compared to $1,267 per oz produced the same period last year.

“The world gold prices have remained depressed and continue to fluctuate between $1,050 and $1,100 per oz, with the risk in 2016 appearing to be on the downside.

“Mining and processing costs were $11.2 million for the year ended September 2015 compared to $11.8 million for the year ended September 2014. This reduction was despite a three percent increase in National Employment Council (NEC) mandated salary and wage levels effective January 1, 2015.”

Saunders said administration charges for the period ended September 30, 2015 were $1.5 million compared to $1.7 million the previous year.

“As a result of the reduction in the group’s overhead costs, total administration costs as a percentage of mining and processing costs decreased from 14.3 percent in fiscal 2014 to 13.1 percent in 2015,” he said.

The group which also owns Dalny Mine has completed the re-organisation of the holding and operating structures to be able to comply with the Indigenisation and Economic Empowerment (IEE) laws through the implementation of its approved IEE plan.

“Final approval for the movement of claims from the company to its respective operating entities is being awaited from the Ministry of Mines and Mining Development.

“As a result of this re-organisation, the company has transferred certain assets and liabilities from the divisions within the company into 100 percent owned subsidiary companies.

“These assets were transferred into the subsidiaries at fair value, based on valuations determined by the directors, with the profit on transfer being eliminated on consolidation,” said Saunders.