ZMDC seeks $30m to revive gold mines

via ZMDC seeks $30m to revive gold mines – DailyNews Live 8 July 2014 by Kudzai Chawafambira

HARARE – The Zimbabwe Mining Development Corporation (ZMDC) is seeking $30 million to resuscitate its gold mining operations.

Wilson Chinzou, the ZMDC acting-general manager told the Mines and Energy parliamentary portfolio committee yesterday that the company’s priority was Sabi Gold Mine (Sabi) in Zvishavane — which is currently technically insolvent and requires $15 million working capital to reach a production capacity of 45kg per month.

Other gold mines owned by the parastatal include Silobela-based Jena Mine, which requires $13 million while Elvington gold mine in Chegutu requires $750 000 in working capital.

“We have been engaging various investors who are willing to partner with ZMDC, and at the moment, we are currently going through interviews with the investors to do due diligence exercises for us to move as quickly as possible to rescue the mines,” he said.

“We have had various expressions of interest, some coming from reputable mines and we have directed them to do scoping studies at Sabi.

“By end of July, we will be able to identify the investor,” added Chinzou.

This comes as ZMDC’s mines have over the years been heavily weighed down by lack of working capital, creditors, ageing equipment, intermittent power supply, inadequate funding of exploration activities and depressed international gold prices among other constraints.

The acting general manager noted that apart from seeking new investors, the mining firm was embarking on sands retreatment from dumps to recover some gold in order to generate adequate cash flows to fund mining development.

In order to set up the project, ZMDC requires $3 million to start with the floatation plant at Sabi and doing further tests of the dumps.

“The mine has an excess of gold dump resources of 3,6 million tonnes at 0,65 grams per tonne.

“The initial test work on a few samples was carried out to determine the feasibility of recovering gold lost to the tailings at Sabi by floatation,” said Chinzou.

He noted that the laboratory test work through floatation recovery indicated that it exceeded 80 percent to yield the concentrate of above 0,5 grammes per tonne and the retreatment tests will take over a month.

“Production can only start in the fifth month after concluding tests and setting up the floatation plants.

“The proposal is to treat 60 000 tonnes of sand per month at a grade of 0,65 grammes per tonne with a recovery of 45 percent to 60 percent using the floatation treatment.

“We will recover an average of 17 kg of gold per month which will give us revenues of about $700 500 at a cost of about $360 000 per month,” he said.

Chinzou added that the sands retreatment projected annual profit will amount to $3 million and will be adequate to fund the shaft and hauling development, exploration and drilling among other activities.

“We have evaluated the sand retreatments and it is very viable.

“It is capable of funding all these projects within a period of two years,” he said.

Chinzou added that they were also yet to go through feasibility studies to ascertain open pit mining of oxide ore at Sabi.