Kavango Resources plc said its new Zimbabwe mining subsidiary will this month start generating revenue with the Hillside gold project.
PROSPECTS
Kavango Mining (Pvt) Ltd signed its first contract to begin immediate gold mining by taking over operations for 100% revenue.
Today’s news follows Kavango’s plans to generate early cash flow by extracting gold from tailings dumps at its Nara project, with no mining required.
The Hillside option was signed in July 2023, and extended earlier this year to review changes in the country’s tax laws.
The terms are currently under renegotiation with the mining contract independent of the option.
Located southeast of Bulawayo, the project comprises 44 gold claims and contains five historic underground mines.
Gold production currently consists of mining oxides near surface using small-scale mining methods, with production at 600g of gold per month.
The contract, which either Kavango or the current owner can cancel with six months written notice, will see the company improve and increase operations to 1kg per month.
Hillside has two stamp mills on site and a processing plant with current gross revenue from production of around US$30,000 a month.
Kavango plans to add a third stamp mill to Hillside and fund further upgrades of plant and equipment.
The company will also review the potential for small-scale underground mining.
A mining ‘growth point’ will also be developed by upgrading the project’s plant and “enhancing local community-led gold extraction to increase near-term production”.
Kavango has started exploration at four priority prospects with a view to discovering “one or more larger-scale gold deposits suitable for modern bulk mining”.
The programme includes geological mapping, geochemical surveys, geophysical programmes, and drilling to assess the geology, style and type of mineralisation, and distribution of grade.
Kavango’s wider exploration continues for potential larger-scale bulk mineable gold deposits.
CAPITAL
Chief executive Ben Turney said that continuous production at Zimbabwe gold projects formed an important part of any long-term development plan.
“Our objective is to become a significant gold producer in this country, and this is our first step towards achieving this goal.
“If all goes well, there are other production opportunities we hope to bring to Kavango.
“Gold production at Hillside has been consistently profitable for the last three years, despite capital constraints.
“As with most projects in Zimbabwe, the lack of investment capital has held back growth.”