Falcon Gold, one of the best performers on the Zimbabwe Stock Exchange last year, produced 696 kg of gold last year, about 22 378 ounces, but it says this was 218kg lower than the previous year because of unfavourable conditions for large-scale gold producers.
It says large-scale gold producers were paid $10.6 million a kg while small-scale producers got $60 million a kg.
They also did not receive foreign currency payment for their gold on time with delays of up to two months.
The Reserve Bank of Zimbabwe has, however, recently issued statements that it has cleared all arrears to gold producers.
Despite the drop in production, the company made a hefty profit of $1.1 billion during the year ending September, leaving it with a surplus for the first time in years.
Its revenue shot up from $1.4 billion to $6.6 billion with profit after tax shooting up from $35 million to $1.4 billion.
Net profit increased from $27.4 million to $1.1 billion. The company had an accumulated loss of $33.5 million in 2001. This dropped to an accumulated loss of $6.1 million in 2002 before turning into an accumulated profit of $1.1 billion.
Production has steadily declined from 1000 kg in 2001 to 914 kg in 2002. Production costs which stood at $355 000 an ounce in 2001 more than doubled to $767 000 in 2002 and were down to $481 000 last year.
The company benefitted from the revised exchange rate of $824 to the greenback, from $55 the previous year.
It is likely to benefit further from the new auction system which has seen the exchange rate improve from just over $3 500 to over $4 000 to the greenback.