Metallon to reopen Redwing Mine, commission new plants in October to increase bullion output

Metallon to reopen Redwing Mine, commission new plants in October to increase bullion output

By Bernard Mpofu, HARARE, July 22 (The Source) – Zimbabwe’s largest gold producer Metallon Corporation has announced plans to re-open its Redwing mine and commission new equipment at Shamva and Mazowe mines in October as it seeks to ramp up bullion output.

Redwing, which dates back to 1889, was put under care and maintenance in 2004 and has been flooded in recent years. Between 1966 and 2004, it produced more than 1.1 million ounces of gold but is expected to yield 10,000oz at a cost of $833 per ounce by end of this year. It was initially slated to reopen by end of July this year.

“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 company said in a written response to questions from The Source.

“The late delivery of materials and spares coupled with unforeseen contractual delays have slowed down 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.”

Metallon, which operates five mines in Zimbabwe, also has exploration assets in Tanzania and the Democratic Republic (DRC).

It said the construction of civil engineering work at Mazowe Mine commenced in March this year and is approximately 70 percent complete.

“Work is continuing on the Sands Retreatment Project at Mazowe Mine. Fabrication of the 60,000 tonne per month plant by Baldmin Engineering in South Africa is approximately 70 percent complete and will be delivered on site in the coming weeks,” the company said.

“Plant erection on site will commence in August 2015 with commissioning of the plant on track for October 2015. The Sands Retreatment Project will deliver gold at a grade of about 1.3 g/t to produce approximately 2,000 oz of gold each month for six years.”

In April, Metallon appointed Fraser Alexander Zimbabwe to construct a tailing facility at Shamva Mine.

“Mobilisation of staff and equipment commenced in May 2015. 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 dam and camp site have been completed,” the company said.

“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.”

The low-cost producer sees operating costs declining to $883 per ounce this year from $946 recorded last year. But the price of gold fell below $1,100 for the third time this week. Gold last traded below $1,000 in late 2009.

South African businessman Mzilikazi Khumalo acquired the former Lonrho business in 2002. In 2005 production peaked at 156,000oz, making Metallon the country’s largest gold producer.

Metallon reported a $10 million after tax profit in 2014 and sees earnings more than doubling to $22 million on improved output and acquisition of the new mines.