RIOZIM Ltd is in negotiations with DRDGold, a mid-tier, unhedged gold producer and the fourth largest gold company in South Africa, over the evaluation of of the tailings dumps at its mines –– Cam and Motor as well as Renco.
A non-disclosure agreement has been signed according to which DRDGold will carry out a comprehensive drilling and metallurgical test programme.
On the basis of analysis thereof, the two companies will negotiate a joint-venture agreement, which will entail DRDGold contributing its operating expertise and equipment and RioZim its gold resources and physical infrastructure.
This arrangement will be carried out separately at the tailings dump sites.
At the annual general meeting last week, the group said the tailings dumps had the potential to yield in excess of 500 kg of gold.
RioZim CEO Ashton Ndlovhu said the SA company had committed to this at no cost to RioZim, which meant that the full financial risk rested with them.
In addition, RioZim said there was a significant volume of high grade sands material (about 200 000 tonnes of gold ore) at Cam and Motor, which was dumped during the mine’s underground operations.
“The material is heterogeneous, but sampling programmes have indicated an in-situ grade of between three and five grammes per tonne.
RioZim is in advanced discussions with two mining companies in the Kadoma area, which have indicated a willingness to treat this under a tolling arrangement. It is anticipated that operations will commence this month,” said the group.
The Cam and Motor project will make RioZim the country’s largest gold producer.
The group said its short-term objective was to raise additional capital either through debt or through equity to bring to fruition programmes in its project pipeline.
However, given the constraints of raising capital locally whilst maintaining the indigenous status of the company, capital-raising will be done at subsidiary level.
The plan is for the group to put different lines of business into indigenous sub-units. The units would be 51% indigenised, with the remaining 49% used to acquire capital.
The sub units will be Rio Gold- which will own Renco, Cam and Motor, and all other group gold assets; Rio Base Metals which will own the Empress Nickel Refinery and all related base metal assets, Rio Diamonds which will own Murowa and all other diamond-related assets; Rio Energy which will own Sengwa Colliery assets, including a potential power plant, and Rio Chrome which will own 60% of RM Enterprises and all related chrome assets.