Business / Companies
Zimbabwe government rejects New Dawn mining's empowerment proposal
13 Jul 2011 at 00:24hrs | Views
GOVERNMENT has rejected the indigenisation compliance proposals by Canadian-based miner New Dawn Mining Corporation on the grounds that it did not meet certain regulatory requirements.
New Dawn is yet to obtain approval of its acquisition of local assets,
These included Falcon Gold and the Olympus Mine. Approval has to be given by the Competition and Tariff Commission and the Ministry of Youth Development, Indigenisation and Empowerment.
New Dawn last year acquired an 88,7 percent stake (that was subsequently increased to 100 percent) in Central African Gold, which owned the Falcon Gold and Olympus Mines.
Efforts to get a comment from Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere were unsuccessful as he was said to be attending Cabinet yesterday.
New Dawn's acquisition of the local gold producer constitutes a notifiable transaction in terms of Section 34A of the Competition and Tariff Commission Act (Chapter 14: 28 - "Merger") and requires approval by the CTC and the ministry.
Reliable sources said neither the ministry and CTC has approved the merger in terms of Section 2(1) of the same Act.
"You have taken effective control of Falcon Gold Limited and Olympus Mines, as evidenced by the board and senior management changes you have made," said the ministry in a letter dated July 7 addressed to New Dawn president Mr Ian Saunders.
"All of this has been done without you obtaining the relevant approvals with regards to the merger.
"In that regard, you are advised to immediately engage with relevant authorities and obtain the relevant approvals with regards to the merger, otherwise your indigenisation plan is null and void."
It is understood that New Dawn has been given 14 days from the receipt of the letter to take steps to remedy the breach.
Failure would result in the firm being branded a "non-compliant business".
The Ministry of Youth Development, Indigenisation and Empowerment has the right to classify a foreign firm as a "non-compliant business" in terms of Section 5 of the Indigenisation and Economic Empowerment Act (Chapter 14:33). A total of 173 mining firms have submitted their indigenisation plans to the ministry for approval.
New Dawn had earlier indicated that it was considering a listing on the Zimbabwe Stock Exchange, a secondary offering of its common stock to indigenous investors in Zimbabwe, establishing employee and community share ownership plans among other plans.
New Dawn's Zimbabwe operating subsidiaries include Casmyn Mining Zimbabwe (Private) Ltd, Falcon Gold Zimbabwe Ltd, Olympus Mines Ltd, the Turk/Angelus Mine Complex, the Old Nic Mine, the Dalny, Golden Quarry and Venice Mines and the Camperdown project.
New Dawn is yet to obtain approval of its acquisition of local assets,
These included Falcon Gold and the Olympus Mine. Approval has to be given by the Competition and Tariff Commission and the Ministry of Youth Development, Indigenisation and Empowerment.
New Dawn last year acquired an 88,7 percent stake (that was subsequently increased to 100 percent) in Central African Gold, which owned the Falcon Gold and Olympus Mines.
Efforts to get a comment from Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere were unsuccessful as he was said to be attending Cabinet yesterday.
New Dawn's acquisition of the local gold producer constitutes a notifiable transaction in terms of Section 34A of the Competition and Tariff Commission Act (Chapter 14: 28 - "Merger") and requires approval by the CTC and the ministry.
Reliable sources said neither the ministry and CTC has approved the merger in terms of Section 2(1) of the same Act.
"You have taken effective control of Falcon Gold Limited and Olympus Mines, as evidenced by the board and senior management changes you have made," said the ministry in a letter dated July 7 addressed to New Dawn president Mr Ian Saunders.
"All of this has been done without you obtaining the relevant approvals with regards to the merger.
"In that regard, you are advised to immediately engage with relevant authorities and obtain the relevant approvals with regards to the merger, otherwise your indigenisation plan is null and void."
It is understood that New Dawn has been given 14 days from the receipt of the letter to take steps to remedy the breach.
Failure would result in the firm being branded a "non-compliant business".
The Ministry of Youth Development, Indigenisation and Empowerment has the right to classify a foreign firm as a "non-compliant business" in terms of Section 5 of the Indigenisation and Economic Empowerment Act (Chapter 14:33). A total of 173 mining firms have submitted their indigenisation plans to the ministry for approval.
New Dawn had earlier indicated that it was considering a listing on the Zimbabwe Stock Exchange, a secondary offering of its common stock to indigenous investors in Zimbabwe, establishing employee and community share ownership plans among other plans.
New Dawn's Zimbabwe operating subsidiaries include Casmyn Mining Zimbabwe (Private) Ltd, Falcon Gold Zimbabwe Ltd, Olympus Mines Ltd, the Turk/Angelus Mine Complex, the Old Nic Mine, the Dalny, Golden Quarry and Venice Mines and the Camperdown project.
Source - TH
