Toronto, Canada — 23 July 2013 – If the gold price continues to decline, Zimbabwe-focused and Canadian-listed junior gold company New Dawn Mining Corporation may be forced to consider shutting down its operations, either temporarily or permanently.
New Dawn announced earlier this year that it would be implementing various strategies to lower operating costs, reports allAfrica.com. The company, which employs approximately 3,000 people, said the gradual decline in gold prices had had a significant and increasingly negative impact on its mining operations, profitability and operating cash flows.
It added that initially if any of its mines was unable to attain and maintain operations at a cash breakeven level in the short-term under the current operating and business environment, that particular mine would be placed on care and maintenance. Some of the cost-cutting measures introduced included cessation of all capital development projects except those that needed to be commissioned in or to sustain operations for the next six months.
“If the aforementioned measures are not sufficient to enable the company to operate its mines in a commercially viable manner and generate sufficient operating liquidity, or if the world price of gold continues to decline further, the company may be forced to consider shutting down its operations, either temporarily or permanently, or liquidating its assets in a formal or informal arrangement,” it warned.
Another cost reduction strategy being pursued included negotiating temporary price reductions from suppliers for various critical supplies ranging from 5% to 15%.
New Dawn recently reported a 4.7% increase in gold production for the second quarter of this year compared to the same period last year.
Source: allAfrica.com. For more information, click here.