Struggling Falgold says goodbye to ZSE
STRUGGLING gold producer, Falcon Gold Zimbabwe Limited (Falgold) is voluntarily delisting from the Zimbabwe Stock Exchange (ZSE) after failing to overcome a number of operational challenges.
The gold producer’s decision to officially communicate to the bourse about delisting points to the fact that an earlier proposed capital raise has flopped.
Falgold has in recent weeks been issuing cautionary statements advising that it was contemplating “a capital raise initiative which if concluded may have a direct impact on the price of its shares”.
Indications are that the company was looking around US$25 million.
ZSE chief executive Justin Bgoni on Friday said they had been approached with a request for delisting by the miner.
“The Zimbabwe Stock Exchange Limited advises members of the investing public that it has put a halt in the trading of Falcon Gold Zimbabwe Limited’s shares on the ZSE according to Clause 4.13.2 of the ZSE Trading Rules and Procedures.
“This development has been necessitated by a formal request made by Falcon Gold to delist from the ZSE. Falcon Gold has cited the following reasons for their decision to delist: inability to publish financial statements for the year ended September 30, 2019 compliant with IAS 29 standards; the distressed operating and financial condition of the company, and the continuing inability to obtain capital under current conditions,” said Mr Bgoni.
“The ZSE has formally advised Falcon Gold to follow the prescribed procedure as stated in section 11 of SI 134 of 2019 when seeking a delisting. The investing public will be advised of the outcome of the delisting by Falcon Gold once finalised.
Last September, the local bourse lifted a seven-month suspension in trading of Falgold shares after the gold miner fulfilled listing requirements of the bourse.
The gold producer had volunteered to be suspended from trading its shares in February 2019 after they had failed to publish their audited financial statements for the period ended September 30, 2018.
But that suspension had been halted after
Falgold’s management indicated plans to implement corrective measures, including publishing overdue results, as well as a capital raise.
Falgold is a gold mining and exploration company in Zimbabwe founded in 1991.
It primarily explores for gold, base metals and precious metals and has an operational processing plant and ancillary infrastructure which supports a central processing plant that treats ore from Pickstone.
Falgold is a subsidiary of New Dawn Mining Group and has been in a loss making position in recent years.
Years of challenges
In 2016, Falgold sold one of its investment vehicles, Palatial Gold Investment (Private) Limited, which owns the Dalny Mine Complex (DMC), to RioZim.
Dalny Mine had been under care and maintenance since August 2013 from March last 2012.
At the time, Falgold said the disposal of Palatial Gold would allow it to rationalise its asset base and focus on the group’s mining efforts.
In August 2019 it announced it was considering options for an additional $2,5 million to recapitalise its operations.
The required funding was to enable repair of the mill (at Golden Quarry Mine) and resuscitation of mining operations.
Failure to pay outstanding amounts to foreign creditors resulted in key creditors cutting off critical supplies in 2018, a situation which crippled mining operations under the group and delayed the publication of its results as per ZSE requirement.