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Zimbabwe’s Gold Production Soars

HARARE — The Blanket gold mine in Zimbabwe has recorded a 10.7% rebound in second-quarter production.

Experts are saying the restoration of certainty in the operating and regulatory framework will provide growth impetus to the sector, as Zimbabwe has low production costs while no capital is needed to market minerals.

Goldsearch Technical Services executive Vimbai Chakanetsa said gold producers are being held back by capital and power constraints.

Experts say apprehensive investors are holding off expansion and further exploration activities in Zimbabwe. But the country’s gold producing sector has remained largely unscathed by the falling price of the metal as Zimbabwe is said to have low production costs.

“Gold mining is not that bad. What is affecting us is the capital. You don’t need to do anything to market it. But to produce it is where you need capital,” Mr Chakanetsa said.

Mwana Africa is forging ahead with the Freda Rebecca gold mine and has been having good production results. “Operationally, Freda Rebecca continues to perform well,” the firm said recently.

Officials said that cash costs for the Freda Rebecca gold mine had decreased to $883/oz from the previous period’s cash costs of $1,021 — while “recoveries over the period improved from 75% to 81%, with head grades up from 2.28 grams per (metric) tonne to 2.64 grams per tonne “.

Other gold miners in Zimbabwe include Metallon Gold, which has five producing mines, New Dawn Mining, and local mining conglomerate RioZim, which owns the struggling but potentially lucrative Renco gold mine.

There has been a general decline in commodity prices on world markets but Zimbabwean producers of the precious metal are in a buoyant mood, recording massive increases in production, as concerns around the sustainability of current prices in some mining areas, such as South Africa and Australia, grow.

Gold prices tumbled 23% during the April-June period, FactSet data showed on Tuesday. Analysts said on Tuesday that golds decline in the past quarter is the worst such decline in several years.

However, the price of gold for August delivery on Tuesday rose by $1.30 to about $1,257 an ounce.

Although “we came into the year with a view that investors should maintain a benchmark weight to gold, we would now suggest trimming that position”, said Black Rock global chief investment strategist Russ Koesterich, in a review note sent to clients on Monday.

Toronto-listed Caledonia Mining Corporation, whose stake in the flagship Blanket gold mine in southern Zimbabwe has dropped to 49% following its compliance with indigenisation laws, on Tuesday said bullion output from the mine had surged nearly 11% to 11,592oz, compared to 10,472oz produced in the first-quarter period.

The Blanket gold mine had production of 22,064oz of gold, a 6.5% increase on gold production in the first half of the previous year.

Freda Rebecca gold mine produced 65,350oz of gold in the 12 months to March 2013.

 

Source – BD Live