Eureka eyes expansion

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Taurai Mangudhla

Eureka Mine shareholders have spent US$4.5m in the past eight months
mainly on procurement of new equipment and dewatering open pits,
Dallagio CEO Michael Fowler has said.

Another ZWL$5m was also spent for works and other local expenses,
Fowler told Business Times at Eureka Mine in Guruve yesterday, adding
the company is optimistic production will commence in the first quarter of 2021.

“We have a whole program with 14 000 different items that need to be
concluded,” Fowler said, adding that funding is expected to be fully in place in the coming week.

Fowler added some components had already been procured and being
delivered. He said the whole plant will be upgraded.

This means new shareholders Padenga Holdings, which recently concluded
a US$20 million deal for the acquisition of a 50 percent stake in
Dallagio, will only make the first cent out of its massive investment
at least 15 months from now.

The Eureka target could, however, be further delayed by power outages
which are delaying works at the mine, which was shut down in 2000.
Apart from that, foreign currency shortages could also result in the
company failing to meet its timelines.

Energy Minister Fortune Chasi, who accompanied Mines Minister Winston
Chitando and Information Minister Monica Mutsvangwa for a tour of the
mine to see progress since an official opening by President Emmerson
Mnangagwa in June last year, said Eureka was not spared by power cuts.

Chasi said the company gets only 15 hours power supply daily. He
however said discussions were underway with Zesa to improve power
supply for the company, being in the productive sector, with scope for
ring-fencing among other arrangements.

Chitando said a long term solution was being worked on to improve
Zimbabwe’s power situation permanently.

He said when operations resume at Eureka, the target is for the
company to start producing at least 2t of gold monthly. This is in
line with government’s thrust to have 100t of gold annually by 2023
and reach a US$12billion contribution from the extractive sector
annually.

Padenga in August approved a transaction for the takeover of 50
percent in Dallagio.

In terms of the transaction, Padenga will acquire 50,1 percent
shareholding in Dallagio in exchange for an investment the equivalent
of US$20 million into expanding the operations of Dallagio.

The company will acquire 9, 036 shares in Dallagio to be settled by way of cash injection of ZWL$90.36m and the equivalent of US$19 999 990 for the procurement and delivery of mining equipment in Dallagio.Dallagio has interests in Eureka gold mines and Pickstone Peerless.

Pickstone Peerless Mine near Chegutu is an open-pit operation currently producing between 61 and 65 kgs of gold per month while Eureka mine near Guruve is also an open-pit mine currently under development and expected to produce 140kgs of gold per month.