By: AllPennyStocks.com News

Wednesday, January 16, 2013

Gold mining in Africa, one of the largest mining industries on the planet, has seen its fair share of issues related to workers in the last six months. In August, thirty-four platinum miners were shot dead and another 78 were injured when police opened fire after tear gas, rubber bullets, tear gas and water cannons failed to disperse a group of angry, striking miners at a Lonmin PLC mine. In October, Anglo American Platinum Ltd. (OTCQX:AGPPY), the world’s biggest platinum producer, fired 12,000 workers after wildcat strikes by 28,000 employees in Rustenburg that it said cost the company about $82 million in revenue. Also that month, Gold Fields Ltd. (NYSE:GFI), the world’s fourth largest gold producer, felt the wrath of workers with more than 10,000 employees going on strike across several mines in South Africa. AngloGold Ashanti Ltd. (NYSE:AU) had production at mines stopped for more than a month during the third quarter because of strikes. That’s just to name a few of the high profile strike activities in the lower part of the continent.

Today, it hit a smaller firm with Toronto, Canada-based New Dawn Mining Corp. (TSX:ND) reporting an illegal and unprotected work stoppage at its Dalny Mine in Zimbabwe, a landlocked country bordering South Africa. The Dalny Mine is one of five producing mines in Zimbabwe for New Dawn. Through its Falgold subsidiary, New Dawn currently owns 84.7% of the Dalny Mine.

As a result of the work stoppage, gold production has been halted at Dalny. No production interruptions have occurred at the other mines.

The Dalny mine was expanded during 2012, but the mine has also been a bit of a thorn in the side of New Dawn. Throughout the year, the transition from low-grade tailings sands to higher-grade underground gold operations was delayed. Dalny was also the subject of a short-term strike, a hoist breakdown and electrical supply problems in 2012. “…the impact of the power issues at Dalny Mine have now been compounded by the effects of this work stoppage, exacerbating issues with respect to the Company's working capital and operating positions,” the company said in a statement on Wednesday.

For most juniors, the strike and other issues at Dalny could be crippling, but the company having the other producing mines helps mitigate the impact. Upcoming reports will tell the tale better to follow-on to growth in fiscal 2012. The company reported in December that the fiscal year ended September 30, 2012 brought production of 37,623 ounces of gold, a 41 percent increase over the year prior. Gold sales tallied $61.95 million for the year, up 61.8% from the year earlier.

A thinly-traded issue, shares are not being impacted by today’s news of a work stoppage. On only 7,600 shares in volume, the stock price is ahead by 1% at 93 cents.

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