The mid-term financials showed current liabilities of $311 million, of which $256 million was under trade and other payables, against current assets of $61 million.
However, the company is set to restructure its balance sheet after the largest shareholder, the government with 36.77 percent of equity, agreed to restructure short-term obligations amounting to $87.9 million into long term financial instruments, a move which is expected to relieve the company from its constrained working capital position.
Falcon Gold has posted a loss of $351 000 for the six months ended March 31, 2016 due to high maintenance costs at its closed Dalny Mine, which it recently sold to RioZim. Gold production also slumped by 18.5 percent to 3 687 ounces compared to 4 515oz in the previous year.
The sale of Dalny is expected to bring relief to Falgold, which earlier this year said it had fallen on hard times and could close operations permanently due to the current lack of profitability and the economic viability of its mines.
The disposal will allow Falgold to rationalise its asset base and focus on the mining efforts of the group
The company also said it has stopped exploration activities and is still considering shutting down its remaining mining operations, Turk Mine near Bulawayo.
Given that Bindura and Riozim contributed 93.69 percent to the total market capitalisation of companies under the mining index, any further improvement in the two counters will have a large positive effect on the index.-The Source
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