African Gold, which is listed on the London Stock Exchange, has invested more than £4m over the past 15 years in developing gold mines in Zimbabwe.

Africa's best investment location is in ruins

John Teeling African Gold chairman

But, in a frank statement, African Gold's chairman admitted there was very little to show for the money.

"The reality is worse than our worst fears," John Teeling said.

"Africa's best investment location is in ruins."

Violent invasion of mines

In 1997, the firm had four mines and looked well on the way to a profitable future.

But the combination of falling gold prices and rampant inflation in Zimbabwe proved devastating.

It is hard to envisage a lead or plastic engagement ring

John Teeling

In order to survive, the firm sold off three mines, placing all its hope for the future in the Inez mine.

But, as the political situation worsened, the Inez mine has been invaded three times during the past year, with senior management intimidated, threatened and physically abused.

"This mine, which has a modern plant capable of handling 250 tonnes of ore a day, is tottering along, barely making ends meet by mining between 15 and 20 tonnes a day," Mr Teeling said.

Struggling on

Despite the crisis, the company is determined to keep its Zimbabwean operations going as long as possible.

Mr Teeling says he believes demand for gold will continue to grow and that Zimbabwe's mines have a future once the political difficulties have been resolved.

"It is hard to envisage a lead or plastic engagement ring," he comments.

African Gold says it will keep going as long as its local management and 100-strong workforce are willing to keep running it.

Because of recent difficulties, the firm has investigated completely new areas of business, including telecoms and South American oil.

"In the end we decided to stick to the knitting - we are gold miners," Mr Teeling concluded his statement.