Metallon production H1 production up 6 pc

    0
    3

    . . . To spend US$20 million on projects this year

    \n

    . . .Plans to negotiate financing terms

    \n

    METALLON Gold, the country’s largest gold producer, reported today that gold production for the first six months of the year rose 6 percent to 48 143 ounces from 45 524 ounces a year ago, as output in the second quarter through June stood at 12 641 ounces.

    \n

    \n

    Production in the second half of the year was lower-than-anticipated mainly because of equipment breakdowns at its mines.

    \n

    The gold producer, which accounts for more than 30 percent of local production of the yellow metal, also indicated that it will spend more than US$20 million in new projects in the new financial year.

    \n

    Already, the miner has obtained a US$5 million debt facility during the first half of the year.

    \n

    Its total debt position currently stands at US$20 million.

    \n

    Metallon chief executive officer Mr Ken Mekani said although output slumped in the second quarter, the group was able to make up for the losses in the second half of the year.

    \n

    He also noted that the commissioning of new projects was “slightly” behind schedule.

    \n

    “Production during the second quarter was below budget mainly due to equipment breakdowns, which have mostly been addressed. The How Mine replacement of the 25 Level loading station had been planned and we are confident the mine will be able to make up this production in the second half the year.

    \n

    “Throughout 2014 and 2015 Metallon has successfully repaid a significant portion of our debt facilities and interest payments. During this volatile gold price environment, our focus remains on the repayment of debt and outstanding creditors and this will continue as production increases over the next 12 months.

    \n

    “The commissioning of New Projects is slightly behind schedule, however we look forward to the commencing production at the Mazowe Sands Retreatment Plant and the reopening of Redwing Mine in Q4 2015,” said Mr Mekani.

    \n

    Metallon’s Zimbabwe mining assets include How Mine, Shamva, Mazowe and Arcturus.

    \n

    Progress on new projects

    \n

    Mazowe Mine, 70pc complete (Sands Retreatment Project)

    \n

     Work is continuing on the Sands Retreatment Project at Mazowe Mine. Construction of civil engineering work at Mazowe Mine commenced in March 2015 and is approximately 70 percent complete. Fabrication of the 60 000 tonne per month plant by Baldmin Engineering in South Africa is approximately 90 percent complete and will be delivered on site in the coming weeks. Plant erection on site will commence in August 2015 with commissioning of the plant delayed by a month until November 2015.

    \n

     The Sands Retreatment Project at Mazowe Mine will deliver gold at a grade of about 1.3 g/t to produce approximately 2 000 ounces of gold each month for six years, at a forecast C1 cost of approximately US$350 per ounce in Year 1.

    \n

     A new Tailings Storage Facility at Mazowe Mine is also planned and work is expected to commence in October 2015.

    \n

     As part of the new plant labour force, Metallon is planning to recruit an additional 44 employees by October 2015.

    \n

     The CAPEX for the Sand Retreatment Project is approximately US$10m and the new Tailings Storage Facility is approximately US$5m. This is being financed through cash flows and bank debt.

    \n

    Redwing Mine (Resumption of Operations)

    \n

     Installation of services and rehabilitation of underground areas above 6 level has progressed well and a reasonable amount of ore has been stockpiled on surface. The refurbishment of surface metallurgical plant circuit is now at advanced stages. The late delivery of materials and spares coupled with unforeseen contractual delays have slowed completion of expected works. To date, 50 percent of the expected work has been completed and commissioning is targeted for the end of October 2015.

    \n

     Production at Redwing Mine will commence in 2015 at lean capacity of 15 000 tonnes a month and then ramp up to installed capacity of 22 500 tonnes a month in H2 2016.

    \n

    2015 production at Redwing is expected to be approximately 3 400 ounces at US$959 per oz and 2016 production is targeted at approximately 17 500 ounces at US$935 per oz.

    \n

     Redwing Mine has a current total establishment of 346 employees. Once mining commences in October 2015, the mine will employ over 500 staff and once the mine reaches installed capacity in H2 2016, the number of employees will increase to over 700. The majority of employees are drawn from the local community.

    \n

     The CAPEX at Redwing Mine is will be approximately US$1 ,6m in 2015 and US$2,6m in 2016.

    \n

    Shamva Mine (New Tailing Facility)

    \n

     In April 2015 Metallon appointed Fraser Alexander Zimbabwe for the construction of the Shamva Mine 27 hectare Tailings Storage Facility and mobilisation of staff and equipment commenced in May 2015.

    \n

    Since then excavating by the dozer of the starter wall area, the return water pond, the camp site and the two access roads to the slimes dam and camp site have been completed.

    \n

    Soil baseline test pits have been dug and soil profile samples have been sent to the laboratory for analysis. Once soil sample results are received, construction of the starter wall will commence. Commissioning is expected in mid-October 2015.

    \n

     The CAPEX for the Shamva Tailings Storage Facility is approximately US$4,5m.