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Business Reporter
The Zimbabwe Mining Development Corporation plans to use a phased recovery approach to revive three of its gold mines put under care and maintenance due to undercapitalisation.The mining group is looking at introducing short, medium and long-term phases to improve efficiencies and ramp up production at the mines.

ZMDC wholly owns Sabi and Elvington gold mines, which are currently dormant and maintaining project status while Jena Mine has been the only one operating but at a loss.

Presenting oral evidence before Parliamentary Portfolio Committee on Mines and Energy yesterday, ZMDC acting general manager Mr Nelson Chinzou said plans to return the mines to production were at an advanced stage.

“Plans to revive the mines have been put into phases and the board is currently engaged in negotiations with investors who expressed interest in investing in one of the mines.

“The company is looking at starting an exploration exercise to update its geological data for the mines. Therefore, a phased recovery plan is set to be introduced to make sure production resumes,” said Mr Chinzou.

ZMDC plans to invest $3 million at Sabi Gold Mine for the reprocessing of gold dumps/sands containing an estimated $3,6 million worth of gold at grades of about 0,65 grammes per tonne.

This is part of the company’s short-term recovery phase that will enhance an increase in revenue to be used for the funding of medium and long-term projects of Sabi Mine.

Sabi needs recapitalisation to the tune of $15 million to have the capacity to produce 45kg  per month and the mine’s current break-even point stands at 26kg per month.

ZMDC suspended run off mine in May this year to pave way for mine development and Sabi has since been downgraded into a project with employees sent on unpaid leave.

ZMDC is facing litigations relating to the $7,8 million debt accrued by Sabi Mine due to perennial losses.

“Sabi Gold Mine was technically insolvent and it reached a point of liquidation since the mine has been borrowing over the years and accruing liabilities since 2009 which the company failed to repay.

“We are now faced with a challenge of summons, litigations and some of the immovable property at the mine has been attached,” said Mr Chinzou.

“We are doing further tests of the gold dumps to ascertain the amount of gold.”

Current assets for Sabi Mine are valued at $12,7 million with current liabilities sitting at $17 million.

Mr Chinzou, however, said despite the prevailing challenges Jena Mine was on the verge of making a profit after having operated for more than three years making losses.

To ensure sustainable productivity at the mine, the company employed cost cutting measures(cutting labour costs) and improved efficiencies .

In 2009, Jena Mine’s annual gold production was low at about 52,7kg mainly due to severe undercapitalisation.

ZMDC gold production for all the  mines increased to 308,4kg in 2012 from 136kg recorded in 2010, but in 2013 production went down to  213kg.

Jena Mine’s revenue in the quarter ended March 2014 went up to $9,6 million with losses for the company increasing as well to $6,2 million.

Mr Chinzou said ZMDC is expecting to  increase production to 52kg per month at Jena Mine from the current 38kg as part of its long- term plans.

He said the target was achievable once exploration has been completed, as the company intensifies efforts to purchase its own drill rig.

The refurbishment and upgrading of the milling plant at Jena Mine is on the cards while plans to construct a tailings dam at a cost of $500 000 are at an advanced stage.

Mr Chinzou said Elvington Mine remains a viable project and the company has made progress in achieving the targeted of 14kg per month.