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Local consortium bids for Metallon’s mines

28 May, 2019 - 00:05 0 Views
Local consortium bids for Metallon’s mines

The Herald

Martin Kadzere Senior Business Reporter
LOCAL consortium, Vara Mining, has made a bid for Metallon Corporation’s Mazowe and Shamva gold mines, according to sources familiar with the developments. This comes as mid-tier Canadian miner B2Gold dismissed reports that it was considering buying the assets, emphasising it was not currently interested in any mergers or acquisitions.

Earlier media reports had indicated that B2Gold would bid for the two gold mines if it was to be exempted from a law that requires producers to sell gold to Fidelity Printers and Refiners, an arm of the Reserve Bank of Zimbabwe.

Vara Mining comprises a team of local entrepreneurs and business executives with extensive knowledge, experience and expertise in mining and related services.

The consortium has already secured offshore funding with the objective to sweat both assets to optimal returns premised on expansion at both Mazowe and Shamva to achieve economies of scale mainly by developing near surface resources to augment underground operations and introducing industry best practices across the value
chain.

Vara Mining will invest as much as US$120 million in three years towards expansion, which would see production doubling.
“Our main objective in bidding for the said assets is multi-pronged,” said one source who declined to be identified because the matter is private.

“Firstly, we want to avert a situation where productive assets, such as Mazowe and Shamva, should be allowed to rot when the nation needs them to be sweated and provide livelihoods as well as generate much needed foreign currency.

“Secondly, we see an opportunity not just to save existing jobs, but also to create new jobs in line with the Government drive for job creation.

“Thirdly, our due diligence on the assets has confirmed that Mazowe and Shamva have potential to contribute significantly to the call for increased gold production target by 2023, and we are ready to drive that impetus.

“Fourthly, bearing in mind the amounts of litigations hanging over these assets our bid will save the mines from liquidation and job losses, which would invariably reduce both assets to ghost towns translating into a huge loss of productive assets to the nation and unacceptable waste of human capital.

“Finally, success in the bid will bring the much needed foreign direct investment into the country and trigger mines expansion programmes and community development thus directly contributing towards the nation’s Vision 2030.”

Vara Mining also plans to develop a 10MW solar farm at Shamva Mine to ensure uninterrupted power supply to the entity, thereby releasing equivalent load on the national grid for distribution to other users.

Employment will peak beyond 3 200 direct and indirect engagements during the expansion drive.
Substantial capital will also go into sprucing up workers residential areas, roads, schools, clinics, social amenities and provision of water and enhanced welfare services.

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