Firm drained of working capital through externalisation
New sands retreatment plant in false start
Gold mining group, Metallon Gold Corporation, has suspended mining operations at its Mazowe Gold Mine due to serious operational challenges.
Information gathered indicates that despite announcing positive production and financial results for the past two years, the gold mining group has been facing challenges that include non-payment of salaries for employees and externalisation of mining proceeds, which deprived the mine of working capital.
The gold mining group is currently facing allegations of externalising over $30 million through dividends paid to shareholders without profits to back them and fictitious external loan payments.
In an emailed response, Metallon confirmed the halting of operations at its Mazowe Mine, but indicated that the exercise was aimed at increasing and securing future production for the mine.
“Metallon has not shut down Mazowe Mine. In fact, Mazowe Mine has begun a critical accelerated development programme that is meant to increase and secure future production at the mine.
“We are pleased to announce that an accelerated development process has started at the mine. This will be done by taking several steps; exploration, the probing of underground ore bodies, and dewatering from 14 Level to 18 level in order to access lower levels for new mining,” said the gold mining firm.
Metallon said this programme entails temporarily putting underground production on hold whille carrying out major development. This is meant to re-engineer the underground production chain so that when production resumes, the mine will be able to hoist increased tonnages sustainably.
“Already, the mine has increased the number of development machines underground to make this possible. We are confident that this exercise will lead to increased production from Mazowe Mine.”
Well-placed sources told the Business Weekly that employees at Mazowe Mine have since gone on strike, protesting unpaid salaries and halting of operations.
Metallon boasts of producing units, How Mine, Shamva Mine, Mazowe Mine and Redwing Mine, making it the country’s largest gold miner.
Metallon produced 94 212 ounces of gold last year, with the group’s output constituting approximately 25 percent of Zimbabwe’s total production.
“As indicated earlier, there has been no shut down. We anticipate that the redevelopment exercise will last up to six months. During this time, some contract workers employed in areas which are not linked to the accelerated development strategy will temporarily make way to allow for the exercise.
“They will be re-engaged once the programme is complete. In the interim, they will continue to be paid their dues. There are therefore no job losses due to the exercise,” said Metallon.
The gold mining group said the new Sands Plant at Mazowe Mine is underwent its commissioning cycle, during which challenges during this phase were identified and resolved.
The group said this should see production from the plant stabilising going forward and the strategy is to replace underground production with production from the new Sands Plant during the accelerated development phase.