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New Dawn Mining has announced the shutting down of its Danly mine in Zimbabwe, effective of August 30, 2013.

TSX-listed New Dawn Mining, a junior gold mining company operating in Zimbabwe, closed the Zimbabwe operating subsidiary, Falcon Gold Zimbabwe Limited due to the declining gold price and reported operational problems.

The mine’s electrical power was cut off due to unpaid amounts owing to the Zimbabwe Electricity Supply Authority (ZESA), resulting in a total shutdown. The workforce has been placed on unpaid leave and New Dawn Mining is engaging with creditors to address the mine’s outstanding trade payables, which currently total approximately $3.1 million.

New Dawn has admitted that it is facing immense pressure to revise operating costs with the current gold price regime at each of its mines, which is made more difficult by the mounting challenges in the Zimbabwean legislative, regulatory and economic environment.

“The mine is expected to remain on care and maintenance until the Company is able to satisfactorily address the financial and operational issues that contributed to its shutdown or until a potential sale, joint venture or some other arrangement is realised,” New Dawn says.

The Dalny Mine produced 1,949 ounces of gold in the quarter ended March 31, 2013, and 2,762 ounces of gold in the quarter ended June 30, 2013 and employs approximately 900 people in Zimbabwe.

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