Falcon Investment Holdings Societe Anonyme
(Incorporated in Luxembourg - R.C. Number B39773)
Registered Office
6 rue Adolphe Fischer,
L-1520, Luxembourg 14th February 2001
ANNOUNCEMENT
The attention of shareholders is drawn to the following statement made by
the chairman of the company's subsidiary, Falcon Gold Zimbabwe Limited, at
that company's Annual General Meeting, held in Zimbabwe on 12th February.
"FALCON GOLD ZIMBABWE LIMITED
CHAIRMAN'S ADDITIONAL REMARKS
The Chairman's Review in the Annual Report concluded with the following
statement:
"A commitment was made to Government to maximise gold production, but if
current conditions persist, closures cannot be ruled out for certain of our
operations."
Since this statement was made in early December, the company has remained
committed to maximising production, but operating conditions, as referred to
above, have not remained the same, they have in fact deteriorated
substantially. Average operating costs for the first four months of the
current financial year have increased by in excess of 55%, when compared to
the average for last year. The most significant of these is the 40%
increase in wages recently imposed on the mining industry which is the
second since August last year, when increases exceeded 100%. This has seen
the company's monthly wage bill escalate from Z$5.5 million in July to
Z$17.5 million in January.
There has been no significant increase in the gold revenue received by the
company in the new financial year, and as a result the increased operating
cost burden has forced the Directors into making decisions about closing
certain operations within the group.
The gold mining industry is being discriminated against and singled out as
different from other exporters. It is not allowed the same foreign currency
retention as all other exporters, which causes higher costs of production
and lower net revenues. This is resulting in the loss of gold production
and jobs. The nation's gold bullion production will, as a consequence, be
lower than last year's by some 30%. If the revenue our Group receives for
our gold does not increase materially in the very near future our mines will
be forced to close.
D.C. MARSHALL
CHAIRMAN"
In the light of the above, shareholders in Falcon Investment Holdings S.A.
are advised to exercise caution and consult their professional advisors when
dealing in these shares.
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
