Related Stories By Tawanda Musarurwa Published: 20120326
Canada miner acts on empowerment

Harare - Canada-based gold miner, New Dawn Mining Corporation, is negotiating with local investors, as it gears to comply with Zimbabwe’s Indigenisation and Economic Empowerment Act.

This past week, New Dawn said it was looking at possible financing sources as part of implementation of the company’s proposed plan of compliance.

The law requires that all firms with a minimum value of US$500 000 should be at least 51 percent-owned by indigenous Zimbabweans.

Companies are given five years within which to achieve compliance.

“One of these (investor) groups was recently advised by the National Indigenisation and Economic Empowerment Board that it has been confirmed as an indigenous company and approved to invest as an indigenous investor in New Dawn,” said New Dawn.

The Toronto Stock Exchange-listed firm’s gold mines are all in Zimbabwe. New Dawn owns 100 percent of the Turk and Angelus, Old Nic and Camperdown mines.

In addition, it owns approximately 85 percent of Dalny, Golden Quarry and Venice mines, and a portfolio of prospective exploration acreage in Zimbabwe.

The gold producer reported a 6.2 percent decline in net income to US$2.2 million for the quarter ended December 31, 2011. For the quarter ended September 2011, the company recorded net income of US$2.4m. Comparative net income on a quarter-to-quarter basis was impacted by a fiscal 2011 year-end adjustment to the estimated deferred tax liability at September 30, 2011, which was recorded as part of the normal accounting process and caused a commensurate reduction to the total provision for income taxes in the statement of comprehensive income for the September quarter.

Earnings before interest and taxes were US$3.5m compared to US$2.7m in the previous quarter, an increase of 32.6 percent.

The company’s consolidated gold sales reached a record US$15.4m compared to US$6.4m in the prior year period ‑ a 139.1 percent increase.

During the period, the average sales price per ounce of gold sold was US$1 684. This was an improvement from an average price of US$1 370 in the prior comparable period.

New Dawn’s gold production was also positive as they reached a record 9 095 ounces compared to 4 808 ounces in the previous reporting year. However, cash costs per ounce were higher; up to US$1 029 compared to US$821.

“Production increase during the three months ended December 31, was achieved through a continued focus on the mines acquired in the June 2010 Central African Gold transaction,” said the miner in a statement.

Since October 2010, the company has invested approximately US$12.2m in property, plant and equipment at its Zimbabwe operations, of which about US$3.5m was invested during the quarter ended December 31, 2011.

The company said in the last quarter of 2011, it paid around US$2.2m in royalties, taxes, licence fees, levies and other dues to the government.