Engineering failure delays Falgold results

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FALCON Gold Zimbabwe (Falgold) says its financial results for the period ending September 30, 2018 will be delayed due to a number of factors.
In a cautionary statement, the company said it is in communication with its advisors on the impact of matters of concern on the company’s operations and financial condition.
“This will result in a delay in the publication of the September 30, 2018 abridged financial results to shareholders beyond December 31, 2018,” read the statement.
Among the reasons for the delay was a “catastrophic engineering failure” of one of the miners’ mills at its Golden Quarry processing plant, which the company says happened late last week.
“In the intervening period, management has been undertaking a full impact assessment and is now evaluating various options to deal with the matter at hand.
“Notwithstanding this mill failure, to date the funding required to execute the 2019 financial budget has not been received by the company and discussions with regards this funding are ongoing,” the company said.
The company also pointed out that the inability of gold producers to access foreign currency and the resultant failure of the company to pay outstanding amounts to foreign creditors since June 2018, “have resulted in key creditors cutting off critical operating supplies and a disruption in normal operations”.
The listed gold miner has been in a precarious position for almost a decade after persistently holding a negative net asset position, which is a precursor to insolvency, since the introduction of the multi-currency system in 2009.
The company has had numerous problems over the period, including liquidity challenges, strikes, and a recent dispute with RioGold over Dalny Mine, all of which have been compounded by the country’s economic challenges. The gold price slump during the 2012 and 2013 financial periods also has not helped the company.
In its financial results for the six months ended March 31, 2018, the company updated its doubtful going concern statement for the umpteenth time.
“There is serious doubt about the company’s ability to survive as it is currently configured,” it said in a comment accompanying the financial statements.
“While the recent operating difficulties and serious liquidity problems are continuing to affect the company, exacerbated by the dispute with RioGold over the payment of proceeds from the Dalny Mine sale, these factors have resulted in operating losses and negative cash flows… there can be no assurances that the company will be able to continue to conduct operations in Zimbabwe under existing circumstances, or at all,” the company added.