New Dawn buys 100% of Central African Gold

Zimbabwe-focused junior gold producer New Dawn Mining (TSE:ND) said Monday that it has finally completed the acquisition of the remaining interest in Central African Gold, now taking a full 100% stake in the company.

In June last year, New Dawn acquired just over 88% of Central African, which owns a portfolio of assets in Zimbabwe, furthering its goal of becoming a mid-tier gold producer.

Central African has five principal gold properties in Zimbabwe, which include the Dalny Mine, the Golden Quarry Mine, the Venice Mine, the Camperdown Mine and the Old Nic Mine.

Since last June, New Dawn has been further increasing its stake in Central African, to hold nearly 97% as of mid-May this  year.

As a result of the now 100% acquisition, New Dawn has substantially increased its gold resource base and its mining capacity. 

The company expects to reach between 38,000 to 40,000 ounces of annualized gold production by the end of the year, with a target of 100,000 ounces by 2015.

"New Dawn now owns 100% of Central African Gold and, as such, is fully integrating CAG's assets into its overall operations in order to implement  the company's plans to substantially increase sustainable gold production from its extensive array of gold mining properties in Zimbabwe," said president and CEO Ian R. Saunders.

"The consolidated production, revenue and net income figures recently reported for the quarter ended March 31, 2011 are the first indications of the upside potential as a result of the CAG acquisition." 

Indeed, the company reported a 93% increase in quarterly consolidated gold sales to US$7.98 million, and 83% growth  in quarterly consolidated gold production to 6,226 ounces of gold. It also swung to a profit of US$0.70 million, or $0.02 per share, compared to a net loss of $0.46 million, or $0.02 per share, in the three months ending March 31, 2010.

Aside from its interest in Central African, New Dawn owns 100% of the Turk/Angelus Mine Complex in Zimbabwe.