HARARE – Toronto Stock Exchange-listed New Dawn Mining Corporation (New Dawn) has amended its indigenisation compliance plan after government rejected the gold miner’s initial proposal.
The Zimbabwe-focused miner submitted its first compliance plan in 2011 and since then, it has been in confidential discussions with Saviour Kasukuwere’s Indigenisation ministry and the National Indigenisation and Economic Empowerment Board (Nieeb).
“These discussions have resulted in certain changes to the company’s plan of indigenisation and the signing, in September 2011, of a memorandum of understanding that provided the structure for the ongoing discussions,” said Ian Saunders, New Dawn’s president and chief executive.
Saunders said New Dawn submitted a further amended plan that included the participation of Nieeb.
“New Dawn’s indigenisation plan consists of two key components,” said Saunders, adding that the first component contemplates independent indigenous investor groups in Zimbabwe acquiring equity interests in the group, which would include the participation of Nieeb.
“The second component provides for the transfer of equity interests in each of the company’s operating subsidiaries in Zimbabwe to Community Share Ownership Trusts and Employee Share Ownership Schemes amounting to 10 percent and five percent, respectively,” he said.
The shareholding in the company’s Zimbabwean subsidiaries to be transferred to these entities is expected to provide a direct and broad-based participation in New Dawn’s local mining operations by indigenous Zimbabweans.
The equity interest of New Dawn that would ultimately be acquired by indigenous investor groups and Nieeb would comprise approximately 42 percent.
Saunders said his company operates in Zimbabwe through three units, which currently operate five mines throughout Zimbabwe.
“Accordingly, because of this configuration, it is not currently legally feasible for a community around a specific mine site to be issued shares in a subsidiary.
“In order to resolve this issue, the company has made application to governmental authorities in Zimbabwe to address certain tax, securities and regulatory matters so that it can reorganise its mining assets in Zimbabwe to facilitate implementation of its plan of indigenisation,” he said.
“Due to various multi-jurisdictional legal, securities, tax and regulatory issues, the company expects that the implementation of its plan of indigenisation, once approved, may take several months or more to accomplish,” said Saunders.
“However, as there still continues to be substantial uncertainty surrounding the implementation of the indigenisation policy in Zimbabwe, there can be no assurances that the company will be successful in its efforts to comply with the indigenisation laws and regulations under commercially viable terms and conditions, or at all.”
Other mining companies that have complied with Zimbabwe’s indigenisation policy — compelling foreign-owned companies to cede 51 percent shareholding to black Zimbabweans — include Unki, Mimosa, and Zimplats. – John Kachembere