Home » Business » Freda to Raise Gold Output

Freda Rebecca plans to raise annual gold output from 60 000 ounces to 100 000 ounces in the next two years, managing director Mr Tonderayi Muganyi said. Mr Muganyi however did not disclose how much they need, but said that while about $5 million will suffice for such an increase, Freda would require much less. This, he said, is because an established mine may require less in terms of capital.

Further, the gold mining company intends to increase bullion production to 165 000oz in four to five years through a multi-pronged growth strategy. Mr Muganyi said the growth strategy was feasible.

“The intention is to move from 60 0000z (two tones) of gold to 100 000oz (three tones). We intend to install a third mill,” Mr Muganyi said last week. “We will move forward to 165 0000z, close to 4 or so tonnes,” he said.

He made the remarks while addressing European and African ambassadors to Zimbabwe who toured the mine ahead of the EU-AU Summit in Brussels this week. Mwana is the parent company of Freda Rebecca and Bindura Nickel Corporation.

It raises most of its capital on global markets, including EU. As such, positive reports on Zimbabwe augur well for its business.

According to Caroline Mathonsi, in charge of Mwana Africa investor relations, there is a negative perception about Zimbabwe, which she said is “dangerous” with regards to attracting fresh investment into the country.

Freda’s multi-pronged strategy includes considering opportunities offered by third party players feeds from areas around Freda Rebecca Gold Mine. Freda is also building a tailing plant for the pilot treatment of gold dumps.

In addition, Mr Muganyi said the gold mining company, which accounts for 15 to 20 percent of gold produced in Zimbabwe, has invested in efficiency improvements from existing capacity, which could raise output.

He said the plans to increase output were part of Freda Rebecca’s contribution to increase national output as the country intends to return to the London bullion market, which requires the country’s annual output to increase to 10 tonnes.

Zimbabwe is targeting to produce 17 tonnes of gold this year. The country’s long term vision is to reach 50 tonnes of gold, but that would require huge capital investment.

Depending on the mine, it takes about $5 million to $10 million to produce a single tonnes of gold.

According to Mwana, it is critical to discuss challenges and opportunities in the country and investors should know that while there are challenges, Zimbabwe has remained a prime destination for investment.

Source : The Herald