New Dawn mining revenue rises

Gamma Mudarikiri

NEW Dawn Mining’s revenue rose US$15,1 million in the quarter to June 30 2012, boosted by a 9,2% increase in production and a 6% increase in the average price of gold.
Revenue grew to US$15,1 million, up from US$14,8 million recorded in March 2012, while gold production in the period increased by 8% to 9,536 ounces, up from the 8 814 ounces in the last quarter.

 
The company’s consolidated gold sales of US$15,1 million in the quarter were 35% up on a year-on-year basis as the company earned US$9,7 million in the same quarter in the prior year.

 
The average sales price per ounce increased to US$1 608, compared to US$1 516 in the same period the previous year.

 
New Dawn said it would continue to re-invest operating cash flows in Zimbabwe to fund expansion and development programmes and was anticipating further increases in production and improved operating efficiency in the future.

 
The company said the 8,000 metre exploration project at its Camperdown Mine gold mining project was on-going. The project, which was started this year, is expected to be completed by end of 2013.

 
The company said it was considering additional exploratory work and the expansion of mining operations, adding that exploration programmes would be premised on access to adequate debt capital and finalisation of implementation of the indigenisation plan.

 
“Ongoing expansion effort could also be impacted by various other factors, including the world price of gold, taxes and royalties, mining fees, power and labour costs, the Zimbabwe operating environment, and potential changes to environmental regulations in the country which could affect operations and require revisions to the company’s capital allocation budget,” a statement released by the company this week said.

 
Production costs per ounce during the period increased to US$1,239 compared to US$1,024 for the comparable quarter in the previous year.

 
“Cash costs per ounce have been adversely impacted during 2012, in part as a result of significant increases in various base costs, including labour and mine supplies,” the company said.
New Dawn said the costs of the initial work being carried out at Wanderer Mine, part of the Gweru gold camp, and the continuation of underground preparatory work at Camperdown Mine, were being accounted for as expenses.

 
Costs at Dalny Mine had also increased, with the decreasing average grade of the tailing sands being processed, as well as costs incurred at Turkois Mine (an outside section on the Dalny shear zone), as it is being prepared for mining operations.

 
New Dawn mining, however, said mining and processing costs would trend downwards over the next several quarters as production levels increased and grades improved. Cost pressures, to some degree, would offset the anticipated improvements.

 
Payments in respect of royalties, taxes, licence fees, levies and other amounts to government and various local authorities in the period amounted to US$2,4 million, while net income to common shareholders and non-controlling interests totalled US$770,000 in the same period.

 
The company invested US$2,8 million on its Zimbabwe operations during the quarter.

 
New Dawn, however, said financial results for the period reflected the challenges it continued to face with the on-going expansion plans which were being hamstrung by limited capital.
The company said the uncertainty surrounding the implementation of the indigenisation policy continued to affect the operations.

 
“The company is currently unable to predict the effect of an inability to conclude or implement its plan of indigenisation,” New Dawn said.