SHAMVA Mine, a member of Kuvimba Mining House (KMH), plans to spend US$5,5 million this year to boost production and keep the mine running, according to general manager Gift Mapakame.
The Mutapa Investment Fund-controlled KMH, acquired Shamva from Metallon in 2020 as part of a wave of mining asset purchases.
Shamva had ceased operations prior to the KMH takeover because it was having trouble raising money to stay in business despite possessing one of the largest undeveloped resources in the sector.
“On stay-in-business capital, essentially we are looking at replacement and refurbishment of our equipment and machinery and on the development capital that we have planned we are investing in exploration of both infield drilling on the surface resource and also exploration drilling in the underground section,” Mapakame told NewsDay Business.
“In pursuit of unlocking flexibility, this exploration is quite essential with regards to developing the mineral resource.
“As a fairly small mine, for this financial year we have planned to spend close to US$5,5 million on capital expenditure and 75% of that is planned on stay-in business capital and 25% has been provided for development capital.”
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Last year, the mining company spent US$4,5 million on capital expenditure.
For the current financial year, Shamva is targeting a minimum production of 24 700 ounces of gold or 770kg.
“We do have an opportunity to realise upside potential in particular by realising the benefits of the programmes that we are running currently,” he said.
“Unlocking flexibility underground will significantly improve the grade that is being mined and ramping up on the starter pits would also increase the volumes that are being mined and being processed.
“We still have also an opportunity on our processing side to fill up the mill optimally and basically we are angling ourselves to ride on that upside potential for this financial year.”
Mapakame said the resource outfit had been reeling from excessive power cuts since the beginning of the year and “we have invested in back-up power capacity in order for us to continue sustaining vital infrastructure and equipment and essentially production operations, even during periods of power outages”.
The mine had also been addressing issues to do with low ore grade.
“Our work was really focused on unlocking flexibility in the underground section and we have also taken the opportunity of the optimisation of our big project in the pipeline, which is the Shamva Hill open pit project, to start the starter pits that were designated on the optimisation and these have already started contributing to our production,” he noted.
“So our tactical approach is two-fold. We are continuing with the unlocking of flexibility on the underground section and we are also continuing with the drip feeding or scaling up of our starter pits on surface.
“To this effect, we have managed to actually increase our production from 42 000 tonnes per month that we were averaging last year and in the beginning of this year to around 55 000 tonnes per month that we are now mining and processing.
“This is essentially giving us a production that is upwards of 60kg of gold or upwards of 2 100 ounces per month.”
Mapakame said the mining company had been struggling to raise funding through the financial institutions or fundraising markets.
As such, he underscored that the growth of the company with regards to stay-in-business capital and development capital could only be organic.
“So with this performance, we are channelling a lot of our retained cash towards stay-in-business capital and also development capital,” he said.
KMH has extensive interests in gold, nickel, lithium, chrome and platinum.