Business / Companies
Metallon Gold earmarks $600m for Zim mine expansions
29 Oct 2010 at 08:19hrs | Views
Metallon Gold Zimbabwe is to invest $600-million in expansion projects over the next four years, a development that could see revenue rising to a projected $1,3-billion a year.
The investment, to be undertaken in stages, starting this year, will involve expansion of its five mines, says chairperson and CEO Collen Gura.
The group operates the How, Redwing, Shamva, Mazowe and Acturus mines. Redwing, on the Mozambique border, is currently not operational owing to flooding.
The mining company is making concerted efforts to pump the water out.
"We are on course to achieving one-million ounces by 2015 and generating revenue of about $1,3-billion from that year onwards," he says.
"We are being supported by local banks, and this is where we would primarily be getting funding for our projects," he adds.
During the current financial year, which began this month, Metallon, the country's biggest gold miner, plans to spend $71-million, primarily on the How mine – the company's biggest mine – and the Shamva mine.
This will result in yearly gold output rising to 136 000 oz.
"Right now, we have arranged a syndicated $30-million loan facility, which will be in the form of a convertible bond. The conditions for the loan are the best that Metallon has ever received," he says.
Metallon is owned by South Africa mining magnate Mzi Khumalo. It used to account for 55% of Zimbabwe's gold output.
The country's gold-mining sector is on a recovery path, with production expected to reach 8 500 kg this year.
Most gold producers suspended operations in late 2008 owing to financial constraints, after the Reserve Bank of Zimbabwe had failed to pay producers proceeds from gold sales.
At the time, the central bank was the sole gold buyer in the country – the sector was liberalised in early 2009.
Many producers resumed operations in July last year.
At its peak, in 1999,Zimbabwe's gold-mining sector produced 28 000 kg. The sector continues to face capital constraints and power cuts. Zimbabwe is facing a huge power deficit of about 50%, as the Zimbabwe Electricity Supply Authority struggles to meet demand.
A shortage of long-term capital has also slowed projects down. According to the Chamber of Mines, the industry requires about $1-billion over three to five years for production to reach 50 000 kg in 2015. –miningweekly.
The investment, to be undertaken in stages, starting this year, will involve expansion of its five mines, says chairperson and CEO Collen Gura.
The group operates the How, Redwing, Shamva, Mazowe and Acturus mines. Redwing, on the Mozambique border, is currently not operational owing to flooding.
The mining company is making concerted efforts to pump the water out.
"We are on course to achieving one-million ounces by 2015 and generating revenue of about $1,3-billion from that year onwards," he says.
"We are being supported by local banks, and this is where we would primarily be getting funding for our projects," he adds.
During the current financial year, which began this month, Metallon, the country's biggest gold miner, plans to spend $71-million, primarily on the How mine – the company's biggest mine – and the Shamva mine.
This will result in yearly gold output rising to 136 000 oz.
"Right now, we have arranged a syndicated $30-million loan facility, which will be in the form of a convertible bond. The conditions for the loan are the best that Metallon has ever received," he says.
Metallon is owned by South Africa mining magnate Mzi Khumalo. It used to account for 55% of Zimbabwe's gold output.
The country's gold-mining sector is on a recovery path, with production expected to reach 8 500 kg this year.
Most gold producers suspended operations in late 2008 owing to financial constraints, after the Reserve Bank of Zimbabwe had failed to pay producers proceeds from gold sales.
At the time, the central bank was the sole gold buyer in the country – the sector was liberalised in early 2009.
Many producers resumed operations in July last year.
At its peak, in 1999,Zimbabwe's gold-mining sector produced 28 000 kg. The sector continues to face capital constraints and power cuts. Zimbabwe is facing a huge power deficit of about 50%, as the Zimbabwe Electricity Supply Authority struggles to meet demand.
A shortage of long-term capital has also slowed projects down. According to the Chamber of Mines, the industry requires about $1-billion over three to five years for production to reach 50 000 kg in 2015. –miningweekly.
Source - Mining Weekly
