Metallon Gold needs $50m for expansion

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GOLD producer, Metallon Gold Zimbabwe, has revealed that it is targeting output of 100,000oz by December from 82,000oz last year and then increasing production to reach historic capacity.
The company, owned by South African tycoon, Mzi Khumalo, requires $50 million to fund expansion projects but it also owes various creditors including utilities about $10 million.
Production in the six months to June reached 45,400oz.
The company is targeting to be a low cost, mid-tier gold producer within five years after which output should be returned to the previous levels of 156,000oz.
Metallon owns How Mine, Shamwa Mine, Arcturus as well as the Mazowe and Redwing mines.
How Mine is expected to produce 52,000 this year from 40,300oz in 2013. Shamwa Mine will produce 26,000oz in 2014 but has a current capacity approximation of 34,300oz.
Redwing is still closed with dewatering expected to be complete by Q4 2014.
The group however noted that all the five mines have open-ended depth extensions.
Despite facing funding constraints, Metallon anticipates to increase its gold out by 60% to 30,700 ounces (about 870 kg) at its Shamva Mine this year, a company executive said on Tuesday.
Last year, the mine produced 19 024 ounces (about 539 kg) of gold.
Speaking during a tour of the mine by the Parliamentary Portfolio Committee on Mines and Energy recently, Metallon general manager Patrick Sana said the company was facing replacement and expansion challenges and owes suppliers such as Zesa Holdings, Zimbabwe National Water Authority and the rural district councils US$10 million.
Sana said the company’s major creditors were local authorities and rural district councils.
“We want to retire our old debt because the money we are paying is adequate to fund our expansion projects,” Sana said.
He said the company requires $50 million for its expansion projects.
“Feasibility studies on expansion will be commissioned in the near term.”
For the long term, the group will commence greenfield exploration at Motapa and Midwinter.
Motapa is situated near Bulawayo while Midwinter is to the south west of Harare.Advertisement