Sabi targets 70kgs of gold per month

04 Feb, 2018 - 00:02 0 Views
Sabi targets 70kgs of gold per month

The Sunday Mail

SABI Gold Mine plans to ramp up gold output to 70kgs per month, but only if it can access US$6 million from the Reserve Bank of Zimbabwe (RBZ), with which it seeks to purchase key consumables.

The mine — which is has been under judicial management since 2011 — is currently producing between 25kgs and 30kgs after finding an investor, Chandiwana Mining Corporation.

Chandiwana is made up of 5 000 Zimbabwean mining experts in and outside the country.

Sabi judicial manager Mr Wesley Sibanda of Welsa International Chartered Accountants, told The Sunday Mail Business last week that while the mine is operating well at the moment, it requires foreign currency to acquire mining consumables to boost production.

“It (the mine) is performing well but what we have done is to come up with a strategy for 2018. This strategy is anchored on two issues; paying all creditors and introducing oxide caps which will result in us producing 40kgs of gold per month.

“At the moment we are producing between 25kgs and 30kgs of gold per month and once we get the oxide caps, it means we will be going up to 70 kgs per month.

“I think that (getting foreign currency) will help us to pay most our creditors,” said Mr Sibanda.

Zimbabwe is in the grip of massive foreign currency shortages which have negatively impacted on the capacity utilisation of several firms as they struggle to obtain spare parts and/or raw materials.

The Reserve Bank of Zimbabwe (RBZ) is appealing to local firms to consider exporting their products so as to generate foreign currency.

At the same time, the RBZ has introduced export incentives of between 2,5 percent and 5 percent, which are paid to exporting firms in bond notes.

Mr Sibanda said foreign currency bottlenecks have become the biggest drawback in their operations.

“We are facing foreign currency challenges. We want foreign currency to import consumables that are not available in Zimbabwe.

“Once we get foreign currency, we will be fine. We have made an application of US$6 million to the RBZ so that we purchase oxide caps,” said Mr Sibanda.

A number of sectors including bakers, miners and manufacturers have appealed to the RBZ to clear nostro account balances to ensure that they import raw materials and spare parts.

Sabi is on a recovery path after resuming operations in May last year following Chandiwana’s investment into the mine.

Chandiwana is the majority shareholder with 51 percent while ZMDC holds 49 percent.

The investor started by pouring US$5 million into underground mining.

At its peak, Sabi can employ up to 450 people and it used to significantly contribute both the Zvishavane and national economies.

The mine has capacity to treat 450 tonnes of ore per day. Sabi has been under judicial management since 2014 after halting operations in 2011 due to working capital constraints.

Sabi’s operations took a knock when most of its machinery was attached by the Deputy Sheriff over liabilities estimated at over $27 million against assets worth US$11,6 million, making the company technically insolvent.

The mine’s claims were first pegged in the 1890s and production resumed in 1909.

Sabi was acquired by ZMDC in 1984.

ZMDC also wholly owns several mines including Jena Gold Mines which is based in Silobela, Midlands province and Elvington Gold Mine in Chegutu.

Elvington Mine suspended operations in 2003 due to the collapse of one of its main shafts.

There are frantic efforts by ZMDC to revive its other mines.

Last week, ZMDC invited interested investors to file bids for Jena and Elvington gold mines, Lynx Graphite Mine in Karoi and Sandawana Mines in Mberengwa.

Sandawana has potential to produce emeralds, gold, tantalite, beryl, iron ore, silver, niobium, lithium, chrome, tin and slate.

The invitation of bids from investors come at a time when Government is seeking to transform the operations of its parastatals, which have been looted dry by greedy managers over several years of mismanagement.

Government is determined to support the recovery of some parastatals as long as they can provide bankable turnaround programs.

Parastatals that demonstrate inability to turnaround their operations will be closed.

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