Despite facing facing funding constraints,the gold producer, Metallon Gold Zimbabwe 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. VICTORIA MTOMBA
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 on Tuesday, Metallon Gold Zimbabwe 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 $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.
Sana also said the mine had short-term projects that include the new TSF which will become the new tails deposition site as the current one has reached its full life span.
Deposition on the TSF is expected to start by next month. The gold producer wants to work on the second emergency pond to improve tails effluent handling and reduce the risk of environmental pollution.
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Commissioning of the facility is expected by September. Sana said the company was affected by unpredictable gold prices. Gold prices went down to $1 200 per ounce from $1 700 per ounce on international markets.
Sana also said the gold producer was facing working capital constraints and was behind paying pensions and salaries for staff.
“We have been failing to pay National Social Security Authority and we owed them $120 000 so they garnished our account and we were unable to do any transactions using that account. Although we have since resolved the issue and we have paid the authority some of the money that we owed them,” Sana said.
“Our relationship with workers is getting sour and sour we are two months behind with salaries. We have now resorted to paying salaries in batches.”
He said the $24 million that the company was owed by the central bank was also making cash constraints even worse.
He said the output for the mine currently stands at 65kg a month and the targeted output was 85kg.
“In January, we started off at 48kg and to date, we are at 65kg and it is a great improvement for us,” Sana said.
He said the performance of the mine dropped in 2009 when the mine was closed, but it has since peaked.
The mining sector is projected to grow by 11,4% this year on the back of planned investments and largely driven by strong performance in gold, diamonds, nickel and coal.
