Gold’s lustre irresistible

GLITTERING gold prices have proved irresistible for the local producers as they have responded by increasing production and speeding up exploration work.

Gold prices have been bullish trading at between US$1 136 and US$1 153 per ounce this week, a price which is irresistible to any sane investor.

While gold lags behind platinum in terms of annualised earnings, local mining companies have since the beginning of the year been increasing production which is expected to hit 4 500 kg by yearend, marking a 50% increase on 2008 figures.

Apart from the impressive international prices, producers of the yellow metal have also warmed to the liberalisation of the marketing of the mineral, as they can export proceeds and only remit a percentage unlike in the past when all gold mined was sold to Reserve Bank-owned Fidelity Printers.

Major gold producers have increased production or laid down the foundation to do so, which is a radical difference from massive closures of mines last year due to increased production costs and the failure by the Reserve Bank of Zimbabwe to pay for deliveries.

Mwana Africa, the holding company for Freda Rebecca, one of the major mines in the country announced at the beginning of this month that it had secured US$10 million for the second phase of refurbishment, which would see annualised production at 50 000 ounces.

Another producer, New Dawn, announced this week that it had completed the commissioning of a third ball mill at its Turk Mine.

The addition of the third ball mill provides additional production capacity of 180 tonnes of ore per day at the Turk Mine, bringing total production capacity to 580 tonnes of ore a day.

This translates to 17 500 tonnes of ore per month, an increase of 45%.

Previously, Turk Mine had the capacity to process up to 400 tonnes per day or approximately 12 000 tonnes of ore per month.

Increased production capacity at the Turk Mine is part of a two phase expansion programme that would see New Dawn producing between 35 000 ounces and 50 000 ounces of gold per annum within four years.

Ian Saunders, president and chief executive officer of New Dawn Mining said the completion of the two-phase programme would see increased production and a decrease in cost per ounce produced.

“Increasing gold production is one of three growth strategies that we are pursuing in Zimbabwe. We are also continuing exploration activities on our former gold producing properties in Zimbabwe, as well as continuing to evaluate potential value-accretive acquisitions in Zimbabwe,” said Saunders.

Leonard Makombe

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