Canada miner in talks to buy Zimbabwe gold project

Canada miner in talks to buy Zimbabwe gold project
Published: 24 May 2019 (3423 Views)
Canada-based B2Gold Corp. is considering buying an idled Zimbabwean gold mine - if it can be exempted from a law that requires producers to sell all the metal to the country's central bank, people familiar with the situation said.

Securing an exemption may open the way for further investment by gold producers in the southern African nation, where a number of companies have closed mines because of the sales requirements and Zimbabwe's economic crisis.

If a transaction with owner Metallon Corp. is concluded, B2Gold will invest $150 million to $200 million developing the Shamva gold mine, one of the people said. The Vancouver-based company will pay about a third of the book value for the mine, which was last assessed at about $167 million seven years ago, the person said, without giving further detail.

John Mangudya, the central bank governor, was unavailable to comment, according to his office. A B2Gold spokeswoman had no immediate comment when reached by phone, while a spokeswoman for Metallon declined to comment.
Struggling Sector

The purchase would be an unusual investment in Zimbabwe's struggling gold sector, with the two biggest producers, Metallon and RioZim Ltd., suing the central bank over its payment arrangements. By law, gold miners in the country must sell their gold to a unit of the central bank, which then pays them back partly in dollars and partly in a local quasi-currency that cannot be traded outside Zimbabwe. Both companies have sued the central bank over the currency they are remunerated in and over late payments.

Read more: Gold Miner Sues Zimbabwe Central Bank for Not Paying in Dollars

Earlier this year RioZim suspended its gold mines temporarily because it wasn't getting paid and Metallon shuttered three operations last year for the same reason, leaving it with a single mine. A large portion of Zimbabwe gold is produced by artisanal miners and much of it is smuggled out the country. Zimbabwe is in the midst of an economic crisis with shortages of fuel, medicine and foreign currency being commonplace.

B2Gold officials have visited Zimbabwe several times in a bid to conclude the sale, one of the people said.

Shamva gold mine, about 90 kilometers (56 miles) northeast of the capital Harare, is an underground operation that produced 21,061 ounces of gold in 2016, according to Metallon's website.

- Bloomberg

 0

You May Like These Videos

Comments

There are no comments.

Latest stories

Peter Moyo, Trevor Manuel fight: Old Mutual cracks

by Staff reporter | 20 September 2019 | 71 Views

Doctors refuse to be capped by Mnangagwa

by Staff reporter | 20 September 2019 | 130 Views

Robert Mugabe does not deserve any praise

by Jeffrey Mothuloe | 20 September 2019 | 68 Views

Trailgater, Tandem Bike Attachment, or Tandem: What's the Difference?

by Staff Reporter | 20 September 2019 | 51 Views

Harare diarrhoea cases soar

by Staff reporter | 20 September 2019 | 63 Views

Kamambo to have the last laugh

by Staff reporter | 20 September 2019 | 73 Views

Beyond Robert Mugabe: Looking into the future

by Obert Chaurura Gutu | 20 September 2019 | 56 Views

Zesa, July Moyo face off

by Staff reporter | 20 September 2019 | 59 Views

Of human rights demands and regime change in ZImbabwe

by Elijah Chihota | 20 September 2019 | 66 Views

Zanu-PF conference preps hot up

by Staff reporter | 20 September 2019 | 56 Views

Scholarships fraud suspects granted bail

by Staff reporter | 20 September 2019 | 47 Views

Ndux Jnr to launch 10th album

by Staff reporter | 20 September 2019 | 45 Views

Zifa did not ban any players

by Staff reporter | 20 September 2019 | 54 Views

Tax free threshold increased

by Staff reporter | 20 September 2019 | 62 Views

UN special rapporteur in Zimbabwe, to meet Mnangagwa

by Staff reporter | 20 September 2019 | 55 Views

'Missing' doctor found alive

by Staff reporter | 20 September 2019 | 66 Views

Top EU official meets Mugabe coup announcer

by Staff reporter | 20 September 2019 | 61 Views

Mugabe delayed land reform for SA

by Staff reporter | 20 September 2019 | 52 Views

Zanu-PF to embark on massive anti-sanctions campaign build up

by Staff reporter | 20 September 2019 | 51 Views

Minister sues bank over US$1,6m student funds

by Staff reporter | 20 September 2019 | 46 Views

Electricity timetable for exam practicals

by Staff reporter | 20 September 2019 | 46 Views

'Mbanje licensing cumbersome'

by Staff reporter | 20 September 2019 | 36 Views

Abductions: It's the State stupid!

by Phillan Zamchiya | 20 September 2019 | 55 Views

Mugabe is dead, but old men still run southern Africa

by Henning Melber | 20 September 2019 | 48 Views

Black market running amok

by Staff reporter | 20 September 2019 | 47 Views

Mugabe fights Mnangagwa from coffin

by Staff reporter | 20 September 2019 | 45 Views

Minister in plot to scuttle NRZ deal

by Staff reporter | 20 September 2019 | 40 Views

Mugabe was a devout Catholic

by Staff reporter | 20 September 2019 | 30 Views

Where is full judgment on 2018 electoral case?

by Swikani Ncube | 20 September 2019 | 42 Views

Mugabe's roots mystery unravelled

by Staff reporter | 20 September 2019 | 53 Views

UN probes Zimbabwe amid 'abductions'

by Staff reporter | 20 September 2019 | 37 Views

Female rapists pounce

by Staff reporter | 20 September 2019 | 53 Views

Zacc investigates Mbare school

by Staff reporter | 20 September 2019 | 40 Views

Bulawayo poor voter registration a wake-up call to Chamisa's MDC

by Editorial - Newsday | 20 September 2019 | 43 Views

Moving on from Mugabe era

by Eddie Cross | 20 September 2019 | 41 Views