Region
Zimbabwe

Sector
Mining & Metals

Summary:

Zimbabwe continues to offer substantial investment incentives coupled with discounted abundant mineral wealth. Zimvest has a number of brownfields projects that are attractive to the savvy investor.

Contact
Shaun Lightfoot

Email
infosa@gan.co.za

Zimbabwe continues to offer substantial investment incentives coupled with discounted abundant mineral wealth. Zimvest has a number of brownfields projects that are attractive to the savvy investor. Zimvest provides an opportunity for early involvement in a number of focussed Zimbabwean mining & exploration companies.

Our MD, Shaun Lightfoot, recently attended the Mining Indaba in Harare. Here are the key factors that he noted:

• Flat tax structure of 15 % for mining companies but with special initial allowances this is actually reduced to a net rate of 8%
• Duty free incentives on capital equipment
• A large number of mining claims have been released into the public domain since the advent of dollarisation in Zimbabwe – in other words, one can’t afford to hold on to claims that one has no intention of using. This has created an opportunity for investors to look at and apply for claims in Zimbabwe.
• According to the Zimbabwe Investment Authority, 49 foreign investment applications have been approved since the beginning of the year.
• Mining companies present at the Indaba indicated that the lack of credit facilities was forcing them to take on equity partners. This is unlikely to continue as Zimbabwe becomes more stable so there is a window of opportunity within which to invest in ‘going concern’ projects and reap the rewards.
• Recent discoveries of Hafnium and Lithium resources.

Investment Opportunities

Coal

Joint venture partner required for the development of a major coal mining reserve. US$15-million investment for a shareholding in the company that owns the coal assets. This will include all and any mineral rights in addition to the coal that the local company owns.

• Current rights-holder is a reputable company
• Its core business is mining and processing of minerals, including base metals, gold, diamonds and coal
• 50-Year renewable exclusive mining rights.
• Total probable reserves exceed 1.2 billion tonnes
• Proven reserves close to 400 million tonnes of low sulphur coal
• Exploration for more reserves in environs continue to expose more reserves
• Specifications and grades of coal followed by a site visit upon request.

Gold

There exist substantial opportunities to recapitalize a number of existing and profitable gold mines in return for equity participation. Part of this strategy involves using new technology to ‘reclaim’ existing gold dumps, some of which have not been reworked using modern technology at all.

We currently have in excess of 20 gold mines on our books. Three of these mines are listed below in more detail:

Gold Mine 1:

• Broad mining strategy to commence the second phase by open cast method with a production rate of 11 000 tonnes per month producing 15 000 oz of gold bullion per annum for five years. Thereafter the third phase will entail a head grade 5 g/ton recovering 12 000 oz of bullion per annum.
• Opportunity to expand and prospect further.

Gold Mine 2:

• Previously worked mine, using outdated mining technology;
• Mine has three ore reserves, in the form of fine dumps, rock rubble and unexploited underground ore;
• A phased approach to exploiting the resource is being proposed and it will involve retreating of dumps, whilst developing the infrastructure to exploit the underground resource;
• Dumps have been estimated to have a life of over three years, with a proven resource of 189kgs, rock and rubble have a probable resource of up to 1,200 kgs and the underground main ore resource has been inferred to contain up to 25 050 kgs of gold, with a mine life of over twenty years;
• Funding of up to USD15 million is required to enable full scale operations, whose development shall include putting in place cyanide tanks to enable the dumps to be treated, whilst drilling to prove the inferred underground resource, and shafts, headgear, and other mining infrastructure required for underground mining is put in place;
• Equity participation in the development of this venture is welcome

Gold Mine 3:

• This is an operational gold mine, which has been developed and was being worked on by the owners until recently;
• Opencast mining operations were carried out on the site between 1936 and 1980, during which 87 303 tons of ore were milled to produce 1196 kgs of gold at a recovery rate of 13.7 grams per ton;
• The mine is in need of a new equipment, namely a scrubber, concentrator, a new ball mill, a generator and a transformer, requiring up to USD1 million, for it to go back to full production;
• Equipment and preferred equipment suppliers have been identified;
• No milling is taking place, current production is approximately 1 kg of gold per month, extracted from treatment of dumps which have accumulated over the years;
• Equity may be issued in exchange for the purchase of requisite equipment. An outright sale will be considered at the right price.

Contact

Shaun Lightfoot
Managing Director - Zimvest
Email: infosa@gan.co.za