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Padenga in robust growth after diversification strategy

BY SRAFF WRITER

ZIMBABWE Stock Exchange-listed crocodile breeder, Padenga Holdings reported an aggressive revenue growth during the year ended December 31, 2020, following a diversification strategy that saw it investing into mining assets, according to financial statements released this week.

The firm took 50% shareholding in Dallaglio (Pvt) Ltd, which owned Pickstone Peerless Mine near Chegutu and Eureka Mine, a gold asset in north eastern Zimbabwe.

Eureka Mine is due to reopen in July, the firm said.

At the end of February, Padenga had invested US$37 million into the asset, as work towards reopening progressed.

“The group’s financial result for 2020 was driven by a solid contribution to revenue from Dallaglio with the mining business consolidated effective January 1, 2020. Revenue for the group was US$71,3 million up from US$29,1 million in the prior period,” Padenga said in a statement accompanying the financial statement.

It said revenue from mining operations amounted to US$40,3 million and constituted 57% of total revenue, while revenue from the Zimbabwean crocodile operation grew by 6% from US$25,5 million to US$27 million.

“The subsequent ramp up to the full processing capacity of 100 000 tonnes per month is targeted by end of December 2021,” Padenga said of Eureka.

“At the end of February 2021 US$37 million had been invested out of a total projected investment cost of US$51 million to recommission the mine. There is good potential to extend the Eureka life of mine by moving to an underground mining method once the open pit has been exhausted. The international spot price is expected to remain elevated in 2021 given the continued uncertainty of the Covid-19 pandemic on the global economy. This investment will continue to yield positive returns for the foreseeable future,’’ the firm said.

It said 362 500 tonnes of ore were milled at Pickstone Peerless’ processing plant at an average of 2,28g per tonne.

The operation produced 722kg of gold, which represented a 14% increase over the prior period.

The increase was driven by an improved average grade of ore fed to the processing plant.

“Several opportunities have been identified and are currently being implemented at Pickstone Peerless mine to improve the efficiency and effectiveness of mining, including improved stockpile management. A comprehensive update was undertaken on the Pickstone Peerless open pit life of mine plan, considering all resources available to the mine and including the giant and blue rock claims. This exercise has extended the mine’s life to over 10 years,” Padenga noted.

Group’s profit after tax for the review period, at US$2,86 million, was down from US$6,74 million registered during the same period last year.

Contribution to turnover from the Texas alligator operation in the United States of America was US$3,9 million, which represented about 5% of total revenue, Padenga said.

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