The Sunday Mail
In a move that seeks to ramp up production, Sabi Gold Mine has installed new mining equipment to replace pieces that had broken down at its plant.
The Sunday Mail Business understands that the company expected to take delivery of the new equipment in January but due to complications, part of the equipment was only delivered in May.
The equipment was installed almost a fortnight ago.
Sources at Sabi said due to equipment breakdowns, the mine is only producing between 25kgs to 30kgs per month.
Sabi judicial manager, Dr Wesley Sibanda of Welsa International Chartered Accountants confirmed to The Sunday Mail Business last week that the equipment has been installed.
Dr Sibanda expects output to increase in the future driven by the new equipment and oxide caps (digging mountains to extract gold).
“The equipment came and was installed last week (about a fortnight ago). Now we are looking at how much we are able to produce going forward,” said Dr Sibanda.
“Underground production is going up this time because we did mining development, which we were scheduled to undertake. But oxide caps are going to increase output.
“We replaced equipment that had broken down and at the moment we are doing between 25kgs and 30kgs.”
An increase in output will feed into Government’s drive to boost gold deliveries which hit 20,8 tonnes by July 31.
In February this year, Sabi announced its intention to ramp up gold output to 70kgs per month if it accessed funds of up to $6 million from the Reserve Bank of Zimbabwe (RBZ).
The company wanted to use the money to purchase key consumables.
The mine – which has been under judicial management since 2014 – is turning the corner since finding an investor, Chandiwana Mining Corporation, which holds 51 percent while the Zimbabwe Mining Development Corporation (ZMDC) has 49 percent.
Chandiwana Mining, which is made up of 5 000 Zimbabwean mining experts based outside the country, started by investing US$5 million into underground mining.
Sabi’s strategy for this year is anchored on two issues – paying all creditors and introducing oxide caps.
The current output of about 30kgs per month and the envisaged 40kgs after the introduction of oxide caps will increase output to about 70kgs every month.
Access to foreign currency, which is currently in short supply, will be key to increasing production and paying off creditors.
Many local companies have been affected by foreign currency shortages, resulting in them failing to pay for foreign purchases, particularly raw materials and spare parts.
The RBZ is now calling on more firms to export to generate foreign currency.
Sabi resumed operations in May 2017.
Sabi halted operations in 2011 due to working capital constraints and most of its machinery was attached by the Deputy Sheriff over liabilities estimated at over $27 million against assets worth $11,6 million, making the company technically insolvent.
The mine’s claims were first pegged in 1890s and production resumed in 1909.
It was acquired by ZMDC in 1984.
At its peak, Sabi can employ up to 450 people and has capacity to treat 450 tonnes of ore per day.