Forex challenges affect Falgold

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HARARE – Listed mining group, Falcon Gold Zimbabwe Limited says foreign currency shortages continue to have a knock on effect on its business which has resulted in the group failing to meet its obligations and is grossly affected operations.

Company secretary Qubeka Nkomo said the inability by the group to access foreign currency has affected the company as it has failed to pay its creditors since June 2018.

“The inability of gold producers to access foreign currency and the resultant failure of the company to pay outstanding amounts to foreign creditors since January 2018, have resulted in key creditors cutting off critical operating supplies and a disruption in normal operations.

“As a consequence of the above issues, the board is in communication with its various advisors on the impact of these matters on the Company`s results of operations and financial condition, which will result in the delay in the publication of the September 30, 2018 abridged financial results to shareholders beyond 31st December 2018,” said Nkomo

This comes as diversified miner RioZim Limited has since lodged legal action against the Reserve Bank of Zimbabwe (RBZ) over failure to meet its obligation to avail foreign currency saying this is choking its business.

RioZim is on record saying due to lack of access to foreign currency for its operations, business was becoming unsustainable and crippling its growth strategies.

Several businesses have also announced challenges owing to foreign currency challenges. Delta, African Distillers Limited, Schweppes Zimbabwe Limited and Nampak Zimbabwe were all constrained by foreign currency shortages to import essential raw materials especially for packaging during the financial year 2017 and 2018 financial periods.

Meanwhile the mining group has also announced that its number 2 milling at the Golden Quarry processing plant had a catastrophic engineering failure 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.”–

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