Stability drives Gaika into US$2m investment

Source: Stability drives Gaika into US$2m investment | Sunday Mail

Sunday Mail Reporter

Buoyed by a stabilising Zimbabwe dollar, an improved business environment and Government’s commitment to secure investments in the mining sector, investors in Kwekwe-based Gaika gold mine have announced “an aggressive programme to advance” exploration by committing a further US$2 million to the exercise.

The expansion project at the existing gold plant, which entails construction of an additional leaching capacity, also resumed in August as “currency stabilisation took effect”, and is scheduled for completion by month-end or early next month.

The US$2,1 million follow-on exploration and development programme comes on the heels of an earlier successful US$5,4 million series of exploration programmes.

Exploration results so far have confirmed an initial resource of 1,8 million ounces — about 51 tonnes — of gold worth an estimated US$3,4 billion, according to last week’s international gold price of US$1 870 per ounce.

The technical report on the findings were audited by Canadian-based geological and consultancy firm, Watts Griffis and McOuat.

It is believed that the drilling programme would further upgrade the quality and quantity of the Gaika project gold resource, which is a key step in confirming the viability of the open pit mine and attracting “substantial foreign direct investment” into the venture.

Gaika’s exploration and mining executive Mr Allan Mashingaidze said the gold mining project would contribute to Government’s target to produce 100 tonnes per annum by 2023 as part of Vision 2030.

“Our international shareholders appreciate the assistance received from both local and national levels of Government, as well as Zimbabwe’s security forces, in dealing head-on with the unfortunate invasion of the Gaika project by some 3 000 illegal miners between February 2018 and April 2019. This action highlights the Government’s commitment to the rule of law as well as creating an environment conducive to our foreign direct investment,” said the company in a recent statement.

“Further, during this period of Zimbabwe’s economic transition, we laud the proactive polices implemented by the Ministry of Finance (and Economic Development), including the foreign exchange auction, which has gone some way to further reassure all foreign direct investors pursuing similar projects throughout the country as we build toward Vision 2030.”

Despite the fallout from the coronavirus, Gaika — a joint venture between China’s state-owned enterprise Potron Investment and Development and UK-based Duration Gold Limited — expects to end the year “on the front foot”.

Gaika has also submitted applications to the Mining Affairs Board for several Exclusive Prospecting Orders (EPOs) as it plans to re-assess the Kwekwe greenstone belt that stretches from that city to Kadoma and hosts a number of Zimbabwe’s historic gold producers.

In addition, US$3,8 million has been budgeted for an advanced drilling and development programme, including feasibility studies, if the ongoing programme produces positive results.

Government seeks to leverage on the mining sector to support the envisaged economic growth expected to raise living standards and create a prosperous society that is consistent with an upper middle-income society within the next 10 years.