LISTED mining group, Falcon Gold (Falgold), says the ongoing strike at its Golden Quarry Mine in Shurugwi will have an adverse impact on the operations of the mine for an indefinite period.
Workers at the Midlands-based gold mine downed tools in January demanding outstanding salaries dating back to September 2017.
In a cautionary statement yesterday, Falcon Gold company secretary Mr Qubeka Nkomo said they have followed the legal due process to resolve the matter but have not been able to obtain enforcement of the court orders.
"There is currently an extended strike at the company's Golden Quarry Mine, which is part of the company's Golden Quarry/ Camperdown mining complex.
"The company has followed legal due process in its efforts to resolve this matter and has prevailed in the resulting court proceedings," he said.
"However, the company has not been able to obtain enforcement of the court orders resulting from such legal due process.
"The impact of this strike is expected to have a material adverse impact on the operations of this mine for an indeterminate period of time."
Towards the end of last year, Falgold was embroiled in a labour dispute with workers at its Turk Mine in Bubi district over outstanding salary arrears of about six months.
The dispute saw over 700 distraught workers at Turk Mine staging a month-long strike which ended on December 15 after the matter was referred by the Labour Court to the National Employment Council for the mining industry.
The Labour Court, because the matter at that time was not discussed at NEC level, ordered the workers to return to work pending a determination by the NEC. Citing production concerns at Turk Mine, the gold producer in November last year terminated employment contracts of an unspecified number of workers on fixed term contracts while some on permanent contracts were placed on two months unpaid leave.
The mine's management referred to the move as "Special measures to avoid retrenchment" and prior to June 2017, Turk Mine targeted to produce 650 tonnes of ore from underground but did not reach the projection forcing the company to revise the target to 450 tonnes, a target, which again was not met.
Last year, Turk Mine did not renew contracts of 70 fixed-term workers as their contracts had expired in May after the completion of the work they had been hired to do.
In May 2017, Falgold sold Palatial Gold Investments, its former subsidiary that owns the Dalny Mine Complex, to RioGold (Private) Limited, a subsidiary of RioGold Limited, pursuant to an agreement for sale of shares.
"The company was recently advised by RioGold that a dispute has arisen with respect to the agreement. As a result of which further payments due under the agreement will be deposited with an Escrow Agent until the dispute is resolved," said Mr Nkomo.
He said the above mentioned dispute was expected to have a material adverse impact on the company's liquidity and cash resources, as well as on its ability to continue funding its operations.
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