Metallon Corporation’s annual gold production for the year 2015 was 2,4 percent down to 96,530 ounces from 98,863) ounces due to power interruptions and equipment breakdowns at How, Shamva, Mazowe and Arcturus Mines.
This saw the group miss its annual target of 105 000 ounces.
The mining group on Friday said key equipment at its units was replaced during the period, resulting in greater capacity restoration.
“Increased power interruptions impacted both underground production and plant processes, with over 1 000 hours of lost production.
“Metallon is looking at possible solutions in order to supplement grid power supply. The slump in production was also driven by delays in the commissioning of Mazowe Sands Retreatment Project due to unforeseen equipment delays,” said Metallon in its full year 2015 production update.
Metallon’s gold production for the fourth quarter 2015 was 24,390 ounces, 1,6 percent higher than the previous quarter production of 23,999 ounces.
Record monthly production of 10,331 ounces was recorded in December 2015.
The Group C1 costs and C3 costs for the year under review were $818 and $1,017 per ounce respectively.
Capital expenditure across the group in 2015 was $15 million where $5,3 million was sustaining and restoration capital and $9,4 million was expansion capital spent on new projects.
“Such expenditure demonstrates Metallon’s commitment to investing in Group assets in Zimbabwe,” said Metallon.
By the end of first quarter this year, Metallon will have repaid $8 million of net debt, reducing the group’s current total debt position to $12 million.
The mining group has also repaid $18 million net to outstanding statutory creditors and is committed to maintaining a low debt position and negotiating down the current cost of interest payments.
In 2016 Metallon’s focus will be on the completion of Mazowe Sands Retreatment Plant and the Mazowe and Shamva Tailings Facilities in the second quarter of 2016.
The group will also undergo resource exploration with a budget of $1,6m committed to upgrade resources from Inferred to Measured and Indicated.
Metallon said the majority of planned exploration will be underground and near surface at Mazowe Mine and at surface at Shamva Hill.
“At Mazowe Mine, dependant on the results of the exploration programme, the Sands Retreatment Plant will be upgraded to process ore from both near surface and underground from 2018,” said Metallon.
Redwing Mine has successfully resumed operations and produced 814 ounces in 2015.
Ramp up will continue over the next six months to bring the mine to full production and at full production, the mine can deliver approximately 1 600 ounces per month.
Metallon said de-watering will continue to open up more reserves in the lower levels of the mine and the reopening of Redwing Mine since discontinuing operations in 2008 will bring major social and economic benefits to the country.
Construction on the Mazowe Mine Sands Retreatment Project is almost complete and the new tailing facilities at both Mazowe and Shamva Mine are progressing well.
“2015 was an exciting and promising year for Metallon and the management team has been focused on making significant improvements to the business.
“Despite gold production for 2015 being marginally below that of 2014, we believe that advances made during the year will ensure Metallon is well positioned for future production growth.
“This is demonstrated by record monthly gold production in December 2015.
“Notably, Metallon spent over US$15 million on capital expenditure over the last 12 months and will also have repaid $8 million of net debt by the end of Q1 2016.
“This establishes our commitment to reducing our net debt position and reinvesting in the business. The reopening of Redwing Mine in the fourth quarter has been a tremendous achievement and we look forward to increased production in 2016,” said Metallon chief executive Ken Mekani.