Harare - Mzi Khumalo’s Metallon Corporation is on the comeback trail in Zimbabwe, with first-half gold production rebounding 6% and the company revving up its Redwing mine to resume production this year.
Gold miners are battling suppressed metal prices, with Mwana Africa – which owns the Freda Rebecca gold mine – saying on Wednesday that its profit position has declined owing to persistently lower gold and nickel prices.
Metallon is however hoping to ride on increased productivity and banks on its low-cost operating mines in Zimbabwe. Khumalo, who is now based in London, owns five gold mines in Zimbabwe through Metallon Corporation.
Metallon CEO Ken Mekani said the 6% rise in production to 48 143 ounces during the first half of the current year reflects the company’s “strategy of ramping up existing operations to full capacity”.
He highlighted that the second quarter had been affected by equipment breakdowns which resulted in lost production time.
“During this volatile gold price environment, our focus remains on the repayment of debt and outstanding creditors and this will continue as production increases over the next 12 months. The commissioning of new projects is slightly behind schedule,” said Mekani.
Metallon’s current debt book stands at US$20m. Cash costs for the first half were $786/oz, with the company saying improved productivity helped lower cash costs and maintain costs at $1 064/oz.
Under the new projects, Metallon is to venture into tailings treatment at its Shamva mine. This will be undertaken at a capital expenditure of about $4.5m, the company said. It will also start a sands retreatment project at the Mazowe mine.
Operations at the Redwing mine that had been halted because of flooding are to resume this year, which is expected to give the company a major boost in its quest to grow production.
It said rehabilitation of underground areas above level 6 had progressed, with about 50% of the expected work having been completed and commissioning now targeted for the end of October this year.
“Production at Redwing mine will commence in 2015 at lean capacity of 15 000 tonnes a month and then ramp up to installed capacity of 22 500 tonnes a month in second half 2016.
"2015 production at Redwing is expected to be approximately 3 400 ounces at $959 per ounce and 2016 production is targeted at approximately 17 500 ounces at $935 per ounce,” said the company.