A TOTAL of US$6 million has been invested into the Eureka gold mining project during the first quarter bringing the cumulative capital expenditure to US$39,3 million.
Eureka Gold Mine in Guruve, Mashonaland Central province, is one of the several previously dormant mining assets that have benefited from the New Dispensation’s call for investment under President Mnangagwa’s “Zimbabwe is open for business” mantra.
In a trading update for the quarter ended March 2021, Padenga Holdings said its mining division, Dallaglio Investments (Private) Limited, which owns Eureka Gold Mine, requires an additional US$11 million to bring the project’s expected total expenditure to US$51 million.
“The major capital expenditure for Dallaglio Investments in the quarter was the ongoing rehabilitation project at Eureka Mine near Guruve.
“In the period under review, the business spent US$6 million to bring the cumulative spend in this project since inception to US$39,3 million,” said Padenga Holdings.
In March, Dallaglio announced that the first open pit blast was successfully blasted at Eureka Gold Mine ahead of production resumption in the third quarter this year.
Reconstruction works at the mine were commissioned by President Mnangagwa in 2018 as part of a grand strategy to maximise on Zimbabwe’s economic endowment and drive the economy towards an upper middle-income economy by 2030.
During the period under review, Dallaglio’s gold sales volume declined by 24 percent to 138 kilogrammes from 183kgs achieved the same period last year.
“The decrease in volume was mainly attributable to flooding following excessive rainfall, which negatively impacted the open pit mining activities at Pickstone Peerless Mine.
“The average spot price of gold for the quarter firmed by 12 percent to US$1,743 per ounce from US$1,558 achieved in the same period last year,” said Padenga Holdings.
It is hoped that once production resumes, Eureka would also be pivotal towards the attainment of the mining sector’s US$12 billion milestone by 2023.
The mine was forced to shut down after running into viability problems two decades ago with capital at the centre of the mine’s challenges.
Extensive exploration works at Eureka have confirmed that the mine has a resource base worth over US$1 billion.
The expected resumption of full production at Eureka could see Dallaglio, which also owns Pickstone Peerless Mine near Chegutu, boost its production to about four tonnes per annum.
Delta Gold commissioned Eureka Gold Mine during 1999 as an open pit operation feeding a processing plant capable of 1,8 tonnes per annum.
The operation was suspended in June 2000 due to high costs. Chronicle