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Michael Tome Business Reporter

DALLAGLIO Investments says it has earmarked US$21 million to finance capital expenditure programmes Pickstone and Eureka gold mines, as gold remains an attractive commoddity in a global market battling the impact of Covid-19 and the war in Eastern Europe.

According to Dallaglio a significant chunk of the amount will be invested in the expansion of operations at Pickstone mine in Chegutu as the company seeks to tap into the potential high-grade gold deposits of the asset.

Part of the funds will be used to finance re-equipping and regeneration of the mine.

Dallaglio, a unit of Zimbabwe Stock Exchange listed Padenga Holdings, chief executive Officer Marc Nicolle described the project as “exciting”, stressing much of the concern’s focus would be directed on the project this year.

This comes as Dallaglio’s gold sales volumes for the three months to March 2022 increased to 453 kilogrammes translating to 228 percent rise from 138 kilogrammes in the same period in 2021.

The mining concern attributed the increase to the contribution from the Eureka Gold mine (in Guruve), which was commissioned in the last quarter of 2020.

In an interview on the sidelines of the Padenga annual general meeting, Mr Nicolle indicated that the prevailing geo-political situation had led the company to direct more capital towards gold production which it considers safe haven.

He acknowledged that the gold price was expected to remain high, hence huge expansion plans by the company as it hopes to significantly increase the company’s top line in the near term.

“For 2022 we have earmarked a little bit north of US$21 million in expansion capital, the significant portion of that will go to Pickstone underground near Chegutu which has an underground that extends down more than 740 meters.

“The mine has not been mined since 1971, we are investing a significant amount of that US$21 million in the redevelopment, reequipping, and refurbishment of the Pickstone underground we believe that the ore coming from there will hit our mills at a higher grade than we are currently seeing,” Mr Nicolle said.

In the first quarter of 2022, Dallaglio’s revenue came in at US$51,38 million contributing 65 percent to parent firm Padenga’s revenue.

Also, the mining concern is bullish about its monthly gold production output from the two mines where it indicated it sought to maintain the momentum it has built in the course of the first quarter of 2022.

“The approved mine plans are expected to achieve significantly higher volumes than the prior year.

“Our gold output this year we expect an average output of approximately 160 kilograms per month across both operations,” he added.

In addition, the business has also started reaping the benefits of the revised production methods at Pickstone mine.

According to the London Bullion Market Association (LBMA), 2022 promises to be a year with many cross-currents considering the geo-political tensions in Eastern Europe.

The Russia-Ukraine conflict has been predicted to bolster safe-haven demand for metal commodities and analysts have since forecasted an average of US$1 895 per ounce of gold in the course of the year, while global inflation growth is likely to be another tailwind.

In this regard, Zimbabwe as a major producer and exporter of gold and other minerals is earmarked to benefit from the anticipated booming prices.