VAST Resources plc, the AIM-listed resource and development company, says it has invested $4 million in the construction of a mine in Chegutu with operations due to start in the second half of the year.
Vast Resources owns Pickstone Peerless gold mine.
Vast Resources chief executive officer Roy Pitchford said the equipment was sourced locally and from China and South Africa.
Pitchford said after phase one the output is expected to be between 10 000 to 12 000 ounces of gold per year.
“The equipment cost $4 million. In Zimbabwe, construction of the new plant and equipment for the mine is at an advanced stage and delivery is expected in Q2 [second quarter] 2015. Mobilisation of the open cast mining contractor and commencement of mining are expected in Q2 2015. Hot commissioning is scheduled for Q3 [third quarter] 2015,” the group said.
Vast Resources has raised $1,361 million before costs through the placing of 150 million new ordinary shares.
The group said the placing of shares is conditional on their admission to trading on AIM and was expected to become effective next week.
“The ongoing market support evidenced by this additional placement is very encouraging, particularly given the difficult market for junior resource stocks at present.
“Vast is in a fortunate position in having previously secured funding for the Pickstone Peerless gold mine in Zimbabwe and, subject to completion of due diligence, the reopening of the Baita Bihor polymetallic mine in Romania,” Pitchford said.
Pickstone Peerless gold mine is located close to Chegutu and historically used to produce 400 000 ounces of gold per annum.
Gold is expected to be one of the major drivers for the overall mineral output which is expected to be 3,1% with nickel, chrome and coal.
The gold sector is estimated to produce 16 000 kilogrammes this year.