Mixed fortunes for mining firms


Mining firms are forecasting a relatively mixed outlook.

THREE mining companies – Caledonia, Bindura Nickel Corporation and Metallon – are forecasting a relatively mixed outlook due to the challenges faced by the sector, according to recent trading updates from the firms.
Caledonia announced that it had further reduced its 2014 gold production target for its Blanket Mine to 40 000 ounces, from 45 000 ounces after the group missed its target for the nine months to September 2014.
The group, in an update for the quarter ended September 30 2014, said tonnes mined and milled in the period did not increase sufficiently to offset the lower grade mined, although plant recoveries have remained strong.
During the quarter, Blanket mine produced 9 890 ounces of gold compared to 12 042 ounces same period last year, representing an 11,9 percent decrease on the gold produced in second quarter 2014 of 11 223 ounces.
The group said gold production at Blanket had been adversely affected by lower than anticipated tonnages and grades being mined and that the target grade for the year was 3,84g/t, against a grade of 3,7g/t in the first half of 2014.
Caledonia in the period has also been adversely affected by the further decline in the gold price. This had also been exacerbated by changes in the Zimbabwean taxation regime.
The new tax regime dictates that the seven percent gold royalty payable to the Zimbabwean government is no longer allowable for the purposes of calculating Zimbabwean income tax.
Bindura Nickel Corporation (BNC) said it was targeting an increase in production of nickel concentrate by 10 to 17 percent at its Trojan Mine.
Last year, the mine produced 7 000 tonnes of nickel concentrate. The company, which currently exports nickel concentrate, is in the market seeking US$26,3 million to finance the restart of its smelter. The project will see the company processing the concentrate into leach alloy (80 percent nickel).
Managing director Batirai Manhando said having already surpassed the H1 targets, the company was buoyant.
“Last year we produced 7 000 tonnes of nickel concentrate and this year we are aiming to achieve between 10 percent and 17 percent increase. As a company coming from the doldrums, our main focus is to ramp up production and maintain growth,” he said.
Manhando said production and tonnes milled to September 2014 were much higher than last year in the same comparable period.
“We have introduced new mining methods and other equipment which are increasing production month on month,” he said.
Metallon Gold said it was targeting a 20 percent increase in gold production this year at 100 000oz, from 82 000oz in 2013, driven by expansion projects currently being pursued.
Chief executive designate, Ken Mekani, said at completion of current expansion programmes, annualised production would stand at 500 000oz.
“Metallon is positioned for growth, we are aiming to ramp up production to reach installed capacity and achieve 500 000oz per annum in the next five years,” he said.
The company operates four mines namely How, Shamva, Mazowe and Arcturus. Redwing Mine is currently under care and maintenance but plans are advanced to re-open the mine.
“The addition of Redwing Mine will increase production towards our desired goals,” he said.
Mekani said Metallon accounts for 20 percent of total gold produced in the country and all production is sold locally to Fidelity Printers.