MEIKLES Limited plans to expand its mining portfolio by acquiring a 51 percent stake in a group of gold mines in Matabeleland at an estimated cost of $3 million and expects to recover the $89 million owed by the central bank later this month.
“Meikles Centar Mining is currently in the process of acquiring a 51percent shareholding in a group of gold mines in the Matabeleland area for a consideration of $3 million.
“We await regulatory approval for the transaction to be concluded,” said executive chairman, John Moxon in a statement accompanying the group’s unaudited results for the year ended 31 March.
Moxon said the process was waiting for regulatory approval for the transaction to be concluded, adding that the company has also purchased 75 percent equity in a company that owns a number of chrome claims on the Great Dyke.
“Proposals have been submitted to the Ministry of Mines related to a significant chrome related project, which include construction of a smelter to beneficiate both lumpy and alluvial ore. The project will cost in access of $100 million,” said Moxon.
“The group carried out limited exploration on an iron ore claim and the results were positive. Further tests are required to determine the full extent and quality of the ore reserves.
“The group looks to its strategic partners to provide finance and mining skills. Mining is a diversification into an area of substantial growth potential in Zimbabwe.” he added.
Moxon said the group expects to recover $89 million owed by the Reserve Bank of Zimbabwe since 1998 at the end the month, after taking the bank to court early this year to recover the funds.
The debt was accrued from transactions related to the group’s dual listing on the Zimbabwe Stock Exchange and the London Stock Exchange.
He said the funds were critical in improving its working capital as well as to finance its indigenisation and empowerment deal.
“Intense negotiations with the Ministry of Finance and Economic Planning are in progress with an intention to facilitate access to these funds by the end of July 2014. All parties to the discussions believe that this timetable is realistic,” said Moxon.
“The solution will be based on the company being in receipt of Treasury Bills, the terms of which are to be acceptable at face value to the market.Advertisement
“A number of treasury bills have already been given to the company and efforts are underway to test their marketability in their present form.”
Revenue for the year dropped to $384 million from $391 million weighed down by the group’s departmental stores and poor turnover in the retail and agricultural operations of the group.
Operating costs were 1.7 percent ahead of the prior year while finance costs increased because of borrowings to fund expansion and refurbishments in the supermarkets, hotels and substantial plantation development.
The operating businesses of Meikles Limited comprises TM Supermarkets, Pick’N’Pay, Meikles Hotel, Tanganda Tea Company, the largest grower, packer and distributor of tea products in Zimbabwe; and Thomas Meikle Stores which trades under the names of Meikles, Barbours and Greatermans.