New Dawn said the move was taken after continued non-payment of money owed the company for the sale of gold to the Reserve Bank of Zimbabwe. Other factors in the shutdown were excessively high operating costs caused by unrealistic exchange rates and hyper-inflation in the impoverished country.
The company’s stock was halted on the TSX late Friday pending news.
In addition, New Dawn said exploration work on the adjacent Angelus Mine has been suspended until economic conditions in Zimbabwe improve. The company said it expects to maintain the care and maintenance program through no later than December.
"These actions will not cause any immediate layoffs, as the existing workforce will be used to manage the mine site and infrastructure under the care and maintenance program," New Dawn said.
Zimbabwe’s economy has been battered by political divisions, economic sanctions imposed on the government of Robert Mugabe, mismanagement, poor weather and hyperinflation.
New Dawn said the uncertain economy in Zimbabwe has not affected the company’s Blue Dot gold mining project in South Africa, which is in the final stages of evaluation leading to a production decision late this year.
The company said it intends to carry out a further financial review of its Zimbabwe operations in early January.