- October 8, 2020
- Posted in LOCAL
Struggling gold producer, Falcon Gold (FalGold) said on Wednesday it will seek shareholder approval at the end of the month to delist from the Zimbabwe Stock Exchange (ZSE) after 24 years of trading.
The de-listing is one of two moves, including a buyout of minority shareholders, being implemented as part of an overall plan which the majority shareholder, Canadian based New Dawn, wants implemented before rescuing the firm whose operations are at a standstill.
Trading of FalGold shares was suspended in March this year after the miner failed to publish its financial results on time.
The firm has in the past year unsuccessfully tried to raise US$3 million to inject in its main operations at the Golden Quarry located in Shurugwi.
“A number of structures have been discussed to address Falcon Gold’s working capital issues (and the legal paths to implement such structures), but New Dawn has advised that the existence of the approximately 15 percent minority interest, combined with the continued listing of Falcon Gold’s shares on the ZSE, are the factors that are preventing New Dawn from being able to provide the critically needed capital injection into Falcon Gold,” the miner said.
“In essence, it is against New Dawn’s economic interest, and would furthermore be fiduciary irresponsible for New Dawn to provide funding to Falcon Gold with minority interest still in place.”
An offer of ZWL$0.13 per share has been made to minority shareholders.
At least 75 percent of shareholders are required to pass the vote to delist and buyout minorities at the company’s extraordinary general meeting to be held on October 29.
In its justification for the de-listing the miner said it was no longer beneficial for the firm which had failed to mobilise funding to invest in operations through the sale of shares.
“As a public company that is exclusively traded on the ZSE and only in Zimbabwe, such listing has not in recent years provided any benefit to Falcon Gold,” the firm said.
“In fact, the ZSE listing has been detrimental given ongoing legal, compliance and audit costs, and the inability to raise capital through the sale of shares.”