New Dawn Mining wants to shift to Cayman Islands
By Chris Parry, Stockhouse.com
New Dawn Mining (T.ND) plummets 51.8% as Zimbabwe mine closure, shift to Caymans pondered.
Toronto-based (for now) New Dawn Mining (TSX:T.ND, Stock Forum) saw a $0.14 drop, or 51.85% of its share price, Friday as a special meeting was called to discuss what to do with a Zimbabwean mine that has been shut down.
The company shuttered the Dalny mine effective August 30, upon receipt of a notice of disconnection of electrical services from the local power utility. With liquidity issues rampant, labour problems, and the Robert Mugabe-led government insisting on majority share in the mine being handed over without compensation, New Dawn ran out of funds and is now looking at restructuring possibilities.
These, according to the notice of special shareholders meeting, include moving operations to the Cayman Islands to lower the organization’s tax burden.
The indigenisation process, which has been continuing without resolution for over two years, has effectively prevented the Company from raising the capital necessary to fund needed investment in its mining properties that would have mitigated the effect of the operational issues,” said a company statement.
“Combined with limited cash resources in Canada and in Zimbabwe, there is an increasing risk that additional deterioration in the current business and economic environment in Zimbabwe will reduce the Company’s strategic options even further, and will jeopardise the continuing existence of the Company.”
New Dawn is also seeking shareholder permission to consolidate shares on a 100,000:1 basis.
“Under current market conditions, the Board of Directors and management believe that these actions represent the best possible outcome for minority shareholders, leaving the few remaining shareholders, primarily institutional investors, to assume the significant risks and uncertain future of the Company. However, there can be no assurances that these measures will be successfully implemented or that, if implemented, they will enable the Company to survive and preserve its operations and assets in Zimbabwe.”
New Dawn shares closed at $0.13 on 380,052 volume, down from a 52-week high of $1.10.
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