African Gold is now producing gold from two mines in Zimbabwe, chairman Dr John Teeling told shareholders at yesterday's annual general meeting. The company is profitable and producing a positive cash flow, he added. It recorded a drop in pre-tax profit from £374,905 to £254,759 in the year ended March 31st 1997.

When the commissioning at the new Beehive mine is finalised and the development of the east deposit at the Inez mine is completed, the company should produce over 400 tonnes of ore per day. The start-up and final cost of Beehive is estimated at £1.5 million, compared with an estimated £1 million. The cost overrun has been attributed to delays, inflation and some design changes. Dr Teeling said the recent fund raising together with a positive cash flow will provide the company with an ability to take advantage of opportunities likely to arise as companies are squeezed by the poor gold price and negative sentiment towards gold.