New Dawn Provides Update to Shareholders on its Zimbabwe Indigenisation Plans
TORONTO, April 27 /CNW/ --
TORONTO, April 27 /CNW/ - New Dawn Mining Corp. (TSX: ND) ('New Dawn' or the 'Company'), a Zimbabwe-focused gold mining company, announced that it is actively
developing a comprehensive indigenisation plan for submission to the
Government of Zimbabwe within the timeframe specified in the recently
gazetted additions and amendments to the indigenisation regulations.
As previously reported, on March 25, 2011, the Government of Zimbabwe
gazetted the Minimum Requirements for Indigenisation (the
'Announcement'), which stipulates that each non-indigenous mining
company with net assets in excess of US$1 must submit an indigenisation
plan by May 9, 2011. The Announcement stated that each such mining
company must dispose of 51%, less any percentage previously indigenised
to qualified indigenous Zimbabwean companies or investors, of its
shares to a 'designated entity' by September 25, 2011, which may, in
certain circumstances, be extended by a further period of no more than
three months. The Announcement defined a 'designated entity' as any
one of several specified state owned or controlled entities or an
employee share ownership scheme. The Announcement also stated that the
value of the shares to be transferred to a designated entity will be
calculated on the basis of a valuation agreed by the Minister and the
non-indigenous mining company, and will take into account Zimbabwe's
sovereign ownership of the minerals exploited or proposed to be
exploited by the non-indigenous mining company.
In this regard, New Dawn is engaging with the Government of Zimbabwe in
order to establish the terms, conditions and timing of an acceptable
indigenisation program that is compliant with applicable legal
requirements. New Dawn's Zimbabwe operating subsidiaries, Casmyn
Mining Zimbabwe (Private) Limited, Falcon Gold Zimbabwe Limited and
Olympus Mines Limited, are all non-indigenous companies for purposes of
the Indigenisation and Economic Empowerment Act that was signed into
law on March 9, 2008, and the related Regulations that were gazetted as
Statutory Instrument 21 of 2010 issued on January 29, 2010.
New Dawn's indigenisation plans include engaging directly with
indigenous capital partners in Zimbabwe, such as pension funds and
investment firms that qualify as indigenous investors, in order to
assemble a viable indigenisation plan that receives the support and
approval of the Government of Zimbabwe. Additionally, the Company is
considering a listing of its common stock on the Zimbabwe Stock
Exchange (in addition to maintaining its primary listing on the Toronto
Stock Exchange), in conjunction with a secondary offering of its common
stock to indigenous investors in Zimbabwe. Furthermore, the Company is
considering establishing employee and community share ownership plans
for the benefit of indigenous Zimbabweans, as well as various other
structures that will result in broad-based participation by indigenous
Zimbabweans.
Through fostering investment by local indigenous parties in the Company
at fair value, the Company will seek to fulfill its obligations to
comply with the indigenisation laws and regulations, thereby increasing
local ownership in the Company, contributing to the growth of the
mining sector in Zimbabwe, and enhancing the ability of the Company to
develop its extensive portfolio of mining properties in Zimbabwe.
However, there is currently substantial uncertainty surrounding the
implementation of the new indigenisation regulations and their
potential impact on the Company. There can be no assurances that the
Company will be successful in its efforts to comply with the
indigenisation laws and regulations.
In light of the current uncertainty surrounding the implementation of
the indigenisation regulations over a short timeframe, management of
New Dawn believes that the Company's current share price, which has
lost substantial value since the indigenisation regulations were
gazetted on March 25, 2011, is now well below fair value and does not
reflect the Company's inherent value or potential. To the extent that
the Company is able to obtain Zimbabwe government approval for its
indigenisation plans and arrange for equity-based transactions
reflective of fair value with qualified indigenous investors, the
elimination of this uncertainty with respect to indigenisation and the
additional operating capital that would be provided by indigenous
investors would be expected to have a positive impact on the Company,
and would provide additional working capital to support New Dawn's
efforts to increase its gold production to 100,000 ounces of gold on an
annualized basis within the next four to five years.
New Dawn is engaging in confidential discussions with the Government of
Zimbabwe in an effort to establish a position that will be compliant
with the relevant indigenisation regulations. The Company will provide
further information to shareholders as and when such discussions have
been concluded, or when developments otherwise warrant.
The TSX has not reviewed and does not accept responsibility for the
adequacy or the accuracy of this release. Statements in this press
release regarding the Company's business which are not historical facts
are 'forward-looking statements' that involve risks and uncertainties,
such as estimates and statements that describe the Company's future
plans, objectives or goals, including words to the effect that the
Company or management expects a stated condition or result to occur.
Since forward-looking statements address future events and conditions,
by their very nature, they involve inherent risks and uncertainties.
Actual results in each case could differ materially from those
currently anticipated in such statements.
Special Note Regarding Forward-Looking Statements: Certain statements included or incorporated by reference in this news
release, including information as to the future financial or operating
performance of the Company, its subsidiaries and its projects,
constitute forward-looking statements. The words 'believe,' 'expect,'
'anticipate,' 'contemplate,' 'target,' 'plan,' 'intends,' 'continue,'
'budget,' 'estimate,' 'may,' 'schedule' and similar expressions
identify forward-looking statements. Forward-looking statements
include, among other things, statements regarding targets, estimates
and assumptions in respect of gold production and prices, operating
costs, results and capital expenditures, mineral reserves and mineral
resources and anticipated grades and recovery rates. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by the Company, are
inherently subject to significant business, economic, competitive,
political and social uncertainties and contingencies. Many factors
could cause the Company's actual results to differ materially from
those expressed or implied in any forward-looking statements made by,
or on behalf of, the Company. Such factors include, among others,
risks relating to reserve and resource estimates, gold prices,
exploration, development and operating risks, political and foreign
risk, uninsurable risks, competition, limited mining operations,
production risks, environmental regulation and liability, government
regulation, currency fluctuations, recent losses and write-downs and
dependence on key employees. See 'Risk Factors' in the Company's
Annual Information Form - 2010. Due to risks and uncertainties,
including the risks and uncertainties identified above, actual events
may differ materially from current expectations. Investors are
cautioned that forward-looking statements are not guarantees of future
performance and, accordingly, investors are cautioned not to put undue
reliance on forward-looking statements due to the inherent uncertainty
therein. Forward-looking statements are made as of the date of this
press release and the Company disclaims any intent or obligation to
update publicly such forward-looking statements, whether as a result of
new information, future events or results or otherwise.
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/April2011/27/c7131.html
Investor Relations Contact: Richard Buzbuzian 1 416.585.7890
President and Chief Executive Officer: Ian R. Saunders 1 416.585.7890
Visit us on the internet: http://www.newdawnmining.com, or
E-mail us at: info@newdawnmining.com