LISTED mining group, Falcon Gold (Falgold) Zimbabwe says its operations in the half year ended March 31, 2018 were affected by a strike which lasted for three months at its Golden Quarry mine.
Workers at the Midlands-based gold mine downed tools from January 15 until March 13 demanding outstanding salaries dating back to September last year. In its unaudited interim financial results for the period under review, Falgold said earlier in the 2018 financial year, it became apparent that there would be continuing deviations from the previously established operating plan, budgets and targets.
In this light, a critical review was undertaken of management and control processes within the group resulting in various changes being made to management, control structures and internal reporting.
“Shortly after these changes were made, on January 15, 2018, workers at Golden Quarry Mine went on strike, and remained on strike until March 13, 2018.
While any strike is potentially crippling to a mining company, regrettably, the striking employees refused to allow management and key support staff access to the site that was required to keep water pumping and to maintain the operations in a relatively ready operational state,” said Falgold.
As a result, it said the operations of Golden Quarry and Camperdown mines severely flooded and critical equipment was damaged on surface and underground.
“The operations resumed on March 16, 2018 with management and the striking workforce returning to work starting the long and difficult process of dewatering the mine shafts and making the surface facilities operational again.
“With no operating cash flow, and a single operating mine, the startup of the mine complex was slow, costly and laborious. The Camperdown shaft was finally pumped dry by April 22 and operations recommenced. The Golden Quarry Mine was finally pumped dry on June 6, and ore hoisting finally started on June 13, 2018,” said the mining group.
During the period under review, Falgold recorded a loss of $1,7 million compared to a loss of $2,4 million in the six month period ended March 31, 2017.
The group produced 1 920 ounces of gold in the half year ended March 31, 2018 compared to 2 970 ounces for the six months ended March 31, 2017. The Golden Quarry plant was started in early April this year and was operating at a reduced throughout due to damage sustained during the strike.
“As such, there was very low gold production in the second quarter of 2018,” it said.
Towards the end of 2017, Falgold was shrouded 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 disgruntled workers at Turk Mine staging a month-long strike which ended on December 15 after the case was brought before the Labour Court by 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. Highlighting production concerns at Turk Mine, the gold producer last November revoked employment contracts of an undisclosed number of employees 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.