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How Mine ground fall dims Metallon gold output

Business
Metallon Corporation Limited saw its gold output dropping 2% to 94 212 ounces in 2016 on the back of a fall of the ground at its major mine, How Mine, which impacted on production and power supply interruption at all the mines.

Metallon Corporation Limited saw its gold output dropping 2% to 94 212 ounces in 2016 on the back of a fall of the ground at its major mine, How Mine, which impacted on production and power supply interruption at all the mines.

BY BUSINESS REPORTER

In 2015, output was 96 530 ounces and is expected to rise to 115 000 ounces in 2017.

In an update yesterday, the gold producer said production was also affected, due to the commissioning of the Mazowe Processing Plant being postponed as a result of equipment delays. Commissioning is now scheduled in the first quarter of this year.

It said there were lower ounces produced at Shamva Mine due to planned repair work of the loading station.

“Contract mining was introduced in September 2016 and investments and repairs were carried out across the production chain,” Metallon said.

“Once improvements were completed, Shamva Mine averaged 2 100oz/month in Q4 2016, compared with 1 600oz/month for the first nine months of the year. Further capitalisation and improvements are expected in 2017.”

Earnings before interest taxation deduction and amortisation (EBIDTA) was $18,6 million in 2016, 40% improvement on $13,3m realised in 2015.

The average gold price realised in 2016 was $1 239 compared to $1 159 in 2015.

Metallon CEO, Ken Mekani said the business delivered an outstanding EBITDA with a 40% increase compared to 2015 attributable to solid production from operations, especially at How Mine, improved cost efficiencies and a strong gold price.

“Furthermore, Metallon continued to invest its cashflows back into the business, with over $12m spent on capital expenditure, testament to our commitment to improving our operations in Zimbabwe,” he said.

“We look forward to even greater improvements in 2017 as we target approximately 115 000 ounces of production and receive additional benefits from increased sales volumes and lower average costs.

He said Metallon “will also be focusing on commencing exploration and development at brownfield sites in Tanzania”.

“This is part of Metallon’s long term strategy to become a 500 000 ounce per annum producer in the next five years.”