Business / Companies
Improved results from Falgold
15 Sep 2011 at 08:18hrs | Views
Falgold reported an improved set of results driven by firm international gold prices, cost containment following the re-organisation and increased production on resumption of operations at Dalny Mine and Golden Quarry Mine. Margins recovered with the company recording a GP margin of 22% and an operating margin of 14%.
The balance sheet shows a negative equity position of $7.4 million, reflecting undercapitalisation. Nonetheless, the major shareholders continue to support the group with total shareholder loans of $10.9 million. Phase 2 of the recovery program was delayed due to uncertainties surrounding the Indigenisation and Economic Empowerment Programme. Nonetheless, Falgold expects to complete the program by end 2011 using internally generated cash flows. Phase 2 requires approximately $5 million and entails the modernization of Dalny Mine and capital support for Golden Quarry. On completion, production levels of approximately 25,000 to 30,000 ounces are expected by late 2012.
The turnaround of the operations is well underway. Falgold has vast mining claims and proven gold reserves estimated at over 2.0 million ounces. Exploration activity is expected to increase over the next 12 months. With gold prices remaining firm at over $1,800/ounce, gold stocks are definitely under the radar of most investors.
The turnaround of the operations is well underway. Falgold has vast mining claims and proven gold reserves estimated at over 2.0 million ounces. Exploration activity is expected to increase over the next 12 months. With gold prices remaining firm at over $1,800/ounce, gold stocks are definitely under the radar of most investors.
Source - Imara Stockbrokers
