HomeBusiness DigestEureka reopens after US$4,5m purchase

Eureka reopens after US$4,5m purchase

Roadwin Chirara in Magunje

EUREKA Gold mine, which has been closed for the past five years, resumed operations this week after being acquired for US$4,5 million by Mmkau Mining and Shaft

Sinkers South Africa from Placerdome (Pvt) Ltd of Australia.

Placerdome agreed to sell the mine to the consortium after previous offers failed due to the hefty price tag put on Eureka.

Sharlemagne Chimbangu, a Zimbabwean based in the United States who is a shareholder in Mmkau, confirmed the price.

“The cost of purchasing the mine was placed at US$4,5 million but you have to understand the price tag also included the mine’s plant and equipment which we have managed to offset,” Chimbangu said.

He said his consortium was currently planning to inject US$6 million into the project through the purchase of mining equipment and the expansion of the mine.

“We are going to inject US$6 million into the mine through the acquisition of new mining technology and the sinking of a mine shaft,” said Chimbangu.

Eureka previously mined its ore through the open cast method but the new owners have embarked on the shaft method.

Chimbangu said current developments taking place at the mine were aimed at allowing the mining of high-quality ore after feasibility studies on Eureka’s ore reserves.

“The mine has reserves of up to 15 to 20 years but our geologist advised us that the best quality ore could only be mined underground, resulting in the need for us investing in the shaft,” he said.

He said his consortium was also planning to start exploration for more reserves in the area to increase the current life span of the mining project.

“We will definitely have to explore for gold reserves in the area as this will increase the life span of the mine while giving value to the other shareholders who make up the consortium,” Chimbangu said.

Eureka currently employ’s 20 full time employees, a figure which Chimbangu said will increase to 40 by the end of the year and 300 when full operations begin.

“We have a small number currently employed at the mine but the figure will increase to 20 more employees by December and 300 when we move into full operations,” Chimbangu said.

He said currently Shaft Sinkers were working on sinking the shaft for the underground project for which on completion local mining staff will be recruited to operate the mine.

“We are using our partnership with Shaft Sinkers to resume the operations and sink the shaft of which when we complete the project the mine operations will be handed back to local staff,” said Chimbangu.

He however said his consortium was currently looking at other mining investment opportunities in the country including the lucrative platinum sector.

“We are looking at opportunities in the local mining sector including platinum but this can only be achieved if the opportunity presents its self,” Chimbangu said.

Eureka becomes the first mine to resume operations after closure in 2000.

More than 10 mines have closed shop over the past decade due to increased costs, low-grade deposits and perennial foreign currency shortages.

More than four mines have shut down in Mashonaland West alone including, Venice (gold), Mhangura (copper) and Cam & Motor Mine (gold).

Falcon Gold’s Dalny Mine near Kadoma is partially open but is also threatening to cease operations. Other mines that have closed include Buchwa (iron) and Kamativi (tin).

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