Talk of “mine rationalisation” by President Robert Mugabe prompted Delta to close its Eureka heap leach gold mine in northern Zimbabwe in June, and political and social unrest in the Solomon Islands saw it also shut its Gold Ridge mine there in the same month.

Although the closures had a limited impact on its 1999-2000 operating profit, Delta warned that the writedowns would result in a significant loss for the year.

“But it’s good that Delta is taking the pain in one hit,” said DJ Carmichael analyst Terry Burns.

“If the situation turns out to be not as bad as expected, the balance sheet can move forward. It’s all upside to the books from there.”

Delta shares were down 4c for the day at $1.39 at the time of writing after climbing back from a low of $1.35.

The company said it will not pay a dividend for the past fiscal year.

Delta, one of Australia’s largest gold producers and involved in two of the country’s lowest cost gold mines – Granny Smith (40%) and Kanowna Belle (100%) – has been the target of recent takeover speculation.

Any potential suitor will need to be comfortable with the political risk associated with Delta.