ZMDC in bid resuscitate mine

Published: 23 January 2014

THE Zimbabwe Mining Development Corporation is looking at raising $20 million through a joint venture partnership with a yet to be identified investor in order to resuscitate Elvington Gold Mine in Chegutu that was shut down more than 10 years ago.

The mine was closed down in 2003 when the main shaft collapsed due to intense faulting and inadequate pillar support in the area.

According to the project document seen by this paper, shareholding will be negotiable according to the contributions of each party.

"Of the capital needed, $10 million is meant for re-capitalisation while the other $10 million will go towards working capital."

"Mine de-watering is currently underway, which will be followed by a comprehensive rock mechanical assessment.

"The mine critically needs resuscitation and development to realise its full potential," read part of the document.

Efforts to get a comment on the project from the Mines and Mining Development secretary, Professor Francis Gudyanga were fruitless as he was said to be out of office at the time of going to print. At least 390 000 tonnes at 3,4 grammes per tonne of proven ore reserves are said to be locked up underground and therefore development and exploration drilling is required for evaluation.

At the time of its closure, Elvington was producing about 40-50kg of gold per month. Elvington Mine has 21 blocks of mining claims covering 473 hectares with a monthly potential revenue of $2,4 million and net profit of $800 000 per month if fully exploited.

Optimisation of production to milling capacity of 25 000 tonnes per month is also expected to be achieved once operations resume.

The ZMDC is also involved in a number of mining projects ranging from diamond, gold and asbestos while there are also efforts to look for investors to resuscitate operations at Kamativi tin mines. The revival of Kamativi Mine was put on hold in 2012 after the prospective South African investor, Burnstone failed to pay commitment fees.

The company had entered into a joint venture deal with ZMDC promising to inject $100 million to revive operations at the mine.

Despite various constraints over the years, ZMDC has managed to contribute significantly to Government coffers, having paid to Treasury at least $300 million in dividends between August 2011 and September 2012.

Its revenue is derived mostly from operations at the Marange diamond fields where exports from the four mining companies operating in that area reached $684 million.
- herald

Tags: ZMDC,