Home » Business » ZMDC Creditors Approve Sabi Mine Dumps Sale

Zimbabwe Mining Development Corporation’s creditors for Sabi Mine have approved the selling of the mining company’s tailings dumps for $10 million to an unnamed foreign investor. Sabi Mine was acquired by ZMDC in 1984 and ZMDC owns 100 percent Kimberworth Investments (Pvt) Ltd trading as Sabi Gold Mine, a company currentlyrunning the mine.

The mine was temporarily shut down between 2001 and 2003 due to working capital constraints and ore reserve depletion.

Despite capital injection made by the holding company, Sabi failed to take aantage of buoyant gold prices and its debt obligations continued to grow finally placing the company under provisional judicial management.

Sabi Mine judicial manager Dr Wesley Sibanda of Welsa International told the company’s creditors yesterday that he was in engagement with several investors who have expressed interest in investing in the company.

“The provisional judicial manager has entered into a separate negotiation to sell mine dumps. The potential investor is ahead of concluding due diligence on the dumps and $10 million will be paid for the dumps.

“The draft agreement is with the investor’s lawyers. This will realise enough cash resources to purchase capital equipment and start operating the mine efficiently,” said Dr Sibanda.

He said selling the dumps will enable the company to pay about 50 percent of the money owed to creditors.

The company’s total assets were at $11,6 million for the nine months to September this year while trade and other payables was at $21 million leaving the company with a huge task to pay off its creditors.

Due to financial constraints in September this year, the company was placed under provisional judicial management and after the meeting yesterday the creditors agreed that the company should now be placed under judicial management because of its going concern status.

Dr Sibanda said they have entered into negotiations with potential investors who have expressed their interest in investing in Sabi.

“I have signed a non-disclosure agreement with three investors willing to invest in Sabi and now await payment of administration fees and commitment fees which have been pegged at $2 million to conduct due diligence,” said Dr Sibanda.

He said to resuscitate the company’s operations there is an option that ZMDC will avail cash resources for the work that has been identified to revive the mine.

Dr Sibanda said this will involve refurbishing underground plant equipment and purchase of mining consumables.

However, a tentative agreement was entered between the judicial manager and ZMDC and if finalised mining operations will begin in March next year.

Source : The Herald

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