HomeBusinessMetallon to dig out more of Zim's gold

Metallon to dig out more of Zim’s gold

SOUTH African investors will soon be able to diversify into a new gold stock when the planned listing within the next few months of Mzi Khumalo’s Metallon Gold goes ahead. It has gold investments in SA and Zimbabwe.


Khumal

o has, however, made a public appeal to the Zimbabwean authorities, led by Mines minister Amos Midzi, to give investors more confidence by reverting to a more normal business climate.


Metallon is the largest miner of gold in Zimbabwe.


Metallon chief executive Greg Hunter told a meeting with Zimbabwean officials and local analysts Wednesday that Metallon intended boosting its output in Zimbabwe from the current annual 195 000 ounces of gold to 600 000 ounces a year, and the listing would help raise capital for this.


“It is our intention to list Metallon Gold on the JSE (Securities Exchange SA) by the end of April,” said Hunter.


He said that the listing would help raise the funding needed to develop four new mines over the next five years.


Khumalo would sell up to 50% of the family business through the listing, and he expected to use the proceeds to invest in other mining projects.


“The Khumalo family will invest in other resources, using the money from the listing,” he said.


“Zimbabwe has rich mineral resources in gold, iron ore, platinum and coal, and we intend to be there for a long time.”


Khumalo demanded an assurance from the Zimbabwean government that as the country had been “under siege for the last five years, the current regime is a temporary measure”.


“I would like an assurance now that as we are going to raise money for Zimbabwe, it’s only a matter of time before Zimbabwe becomes a normal environment,” he said.


Zimbabwean central bank governor Gideon Gono, who was at the Metallon presentation, said the restoration of normality was as certain as the pope’s Catholicism, or the sun rising in the morning.


“It is so certain you don’t have to ask,” he said, pledging normal business would return by the end of next year.


In explaining the listing, Hunter said Metallon was an attractive buy as it was cash generative and robust, and few people realised how mineral-rich Zimbabwe was.


Hunter pointed out that the company had gone through “tough times” for Zimbabwe in the past few years, “but we have come through to the other side”.


He said Metallon’s planned expansion would involve both brownfields developments near existing assets, as well as exploration and acquisition — but emphasised that Metallon would not follow the “Harmony route” in acquiring old assets whose prosperity was dependent on a much weaker rand.


He said that as well as prospects in Zimbabwe there was still “untapped potential in SA”. — BusinessDay.

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