Wednesday, January 15, 2014

Duration Gold Seek US$10 Million in Zimbabwe

Duration Gold seeks US$10m

January 16, 2014
Business Reporter
Zimbabwe Herald

Gwanda-based gold miner Duration Gold, an emerging gold mine formed in 2006 is need of about US$10 million to increase production in order to achieve economies of scale and lowering costs, the company spokesperson said. The majority stake of the company of the company is in the hands of London-based Clarity Capital and Zimbabwean mining families the Muirs and the Thompsons.

Duration Gold has resources and reserves of one million ounces and produces 1 200 to 2 000 ounces of gold per month. Production and company profitability varies widely with power availability which has averaged only 60percent in 2010.

In an interview Duration Gold mine human resources manager Mr Celestino Mhere said the company has a good production capacity and there is need for capital injection to ensure production increase.

“Duration is a small mine by world standards. Significant capital investment (measured in the 10’s of millions of dollars) is needed to increase production in order to achieve economies of scale and therefore lower costs,” he said.

Mr Mhere said Duration has two projects that are at an exploration stage that require financial capital in the tune of US$5 million.

He said his company will not be in a position to finalise its 2014 business plans until the Government of Zimbabwe Budget is finalised and approved.

Mr Mhere said the Budget will have a significant impact on production costs, mine and exploration project viability and ability to raise foreign direct investment.

He said despite the fall of gold prices that has forced many gold miners to close, Duration gold mine is still thriving to make profits and improve its capacity utilisation as well as payment of its employees.

“Duration is committed to its employees, shareholders and other stakeholders and is doing its utmost to weather this storm. At our company we are improving efficiencies and cutting costs wherever possible. It might be a trite statement but only economic mines that survive are capable of employing workers,” Mr Mhere said.

Last year Youth, Indiginisation and Empowerment minister Saviour Kasukuwere threatened to act against Duration Gold, blaming the mining firm for failing to comply with the country’s equity laws.

However Mr Mhere said his company has completed crafting their Empowerment plan and it has already been submitted to the Government and they hope to introduce their empowerment partners to Minister Francis Nhema soon.

All gold mines in Zimbabwe are currently facing major challenges to their very survival and there are many factors contributing to this state of affairs.

The two biggest ones are escalating costs in the form of royalties, taxes, power costs and other fees and service charges and the second is the price of gold.

Last year the gold price fell 28 percent the largest single year drop in over 30 years.

No comments: