WO R L D G O L D

A N A L Y S T
Zimbabwe – 2010 www.gfmsworldgold.com

The Zimbabwean Gold

Mining Industry
World Gold Analyst Special Report

WO R L D
GO L D
Gold pour at Turk mine (courtesy New Dawn Mining)
 The Zimbabwean
Gold Mining Industry

World Gold Analyst

Special Report

WO R L D
GO L D
2 WO R L D G O L D A N A L Y S T Z I M B A BWE

Abbreviations used in this report

‘000 ounces koz
‘000,000 ounces Moz
tonnes t
‘000 tonnes kt
‘000,000 tonnes Mt
tonnes per day t/d
tonnes per year t/y
grams per tonne g/t
gold equivalent AuEq
metres m
kilometres km
gold price / cash costs always in US$/oz
ppb parts per billion
measured & indicated resources M&I resources

List of Figures and Tables

Figure Title page
2.2 Zimbabwe gold production 11
4.1 Simplified geological map of Zimbabwe showing main greenstone belts 32
5.1 Mining Contributions to Zimbabwe Economy 33
6.1 This chart shows how weak the Zimbabwean banks are in relation to other Southern African
countries’ banks 36
7.1 Annual gold production for Zimbabwe 49
7.2 Split of production on a percentage basis 50
7.3 Metallon’s forecast production  63

Table Title 
2.1 Short and medium term production targets for the main producers 10
3.1 GDP growth 24
3.2 Projected growth rates for selected indicators 25
6.1 Power generating facilities in Zimbabwe 42
7.1 Top ten gold producers in 2009 50
7.2 5-year production split 50
7.3 Blanket production history 51
7.4 Zimbabwe Chamber of Mines: Gold Producers’ Committee 74
 WO R L D G O L D A N A L Y S T Z I M B A BWE 3

Contents
Editor:
Paul Burton ACSM, MSc, MBA
Chapter 1 – Introduction 5
Contributors:
Paul Wheeler, Professor Rudo Gaidzanwa
Design & Sub-Editor: Chapter 2 – Overview 7
Gavin Khanna, gavink@mac.com
Published by:
GFMS World Gold Ltd Chapter 3 – Zimbabwe:
Hedges House
153-155 Regent Street Political & Economic Profile  17
London W1B 4JE. UK
Tel: +44 (0)20 7478 1777
Fax: +44 (0)20 7478 1779 Chapter 4 – Geological Overview of Zimbabwe 29
paul.burton@gfmsworldgold.com
www.gfmsworldgold.com
Marketing & Subscriptions: Chapter 5 – Mineral Production in Zimbabwe 33
emma.hastings@gfms.co.uk
Printing: Latimer Trend & Company Ltd., Plymouth
© GFMS World Gold Ltd 2010
Chapter 6 – The Gold Industry:
World Gold Analyst is an independent publication
committed to providing subscribers with factual A SWOT Analysis 35
information on selected publicly traded companies,
business and economics.
World Gold Analyst, its publisher, editor and writers do not Chapter 7 – Gold Production Review 49
own or trade in shares of any of the companies mentioned.
All statements and expressions are the sole opinions of
the editor and are subject to change without notice. A
profile, description, or other mention of a company in the Company profile – GAT Investments 81
newsletter is neither an offer nor solicitation to buy or sell
any securities mentioned. While we believe all sources of
information to be factual and reliable, in no way do we
represent or guarantee the accuracy or completeness
Company profile – New Dawn Mining  87
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World Gold Analyst has full editorial control of this
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WO R L D
GO L D
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 WO R L D G O L D A N A L Y S T Z I M B A BWE 5

Chapter 1 – Introduction

T his report presents a comprehensive

review of current gold mining and project
development initiatives in Zimbabwe.
Approach

This report is based on information collected

during a week-long visit to Zimbabwe that I
The main sponsor of the report is the Chamber
made in July 2010. During that period I travelled
of Mines of Zimbabwe (COMZ).
between Bulawayo and Harare and visited
Figures from GFMS, showed that in 1999, the the main operations of Duration Gold, GAT
Zimbabwean gold mining industry produced Investments and New Dawn Mining, including the
29.7 t of gold, a record for the country. However, recently-acquired Central African Gold assets. I
since that time the economic woes of the undertook underground and surface tours and
country have decimated gold production and met at length with management and geologists.
forced many mines to close in late 2008 and
early 2009. The site visits were augmented by published
data from press releases, financial reports,
Since dollarisation of the economy in March presentations and technical reports, the latter,
2009, which meant that the gold miners could be in the form of NI 43-101 documents, were used
paid in US$, producers have started to ramp up extensively as the main source of independent
operations again, but they face many challenges to information.
restore the industry to its former glory.
The report was edited by Paul Burton ACSM,
The aim of this study is to present the investment
MSc, MBA.
community with a comprehensive review of all
the production and development activity being The sponsored reports were written independently
undertaken on a company-by-company basis and and reviewed by the sponsoring companies for factual
an analysis of the strengths and weaknesses of accuracy only. All ‘Investment Comments’ were made by
the industry. Paul Burton.

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6 WO R L D G O L D A N A L Y S T Z I M B A BWE
Scope
Chapter 2 presents an overview of the situation
within the country and the issues facing gold
producers. It concludes with some observations
about current production.
A number of summary tables are presented at
the end of the section. Projects are categorised
by World Gold Analyst’s 6-D notation, which
identifies at which stage in the mining life cycle
a particular project. The model, in order of
decreasing risk, is shown below.
6-D Model Description
Detection Reconnaissance mapping,
geochemical and geophysical
work underway
Discovery  ineralised targets identified
M Engineering and an MBA, from the University of
and drilling underway
Definition  eposit is being defined
D
through a resource estimate
and /or a pre-feasibility study
Design Feasibility study underway
Development Construction decision made
Depleting Mine is producing
Chapter 3 contains a brief introduction to the
country of Zimbabwe through statistics and then
a commentary on political developments leading
up and beyond the formation of the government
of national unity in 2009, with analysis of where we
stand today.This is followed by an assessment of the
state of the economy and concludes with a discussion
of the current situation with regard to mining law.
Chapter 4 describes the geology of the country
with special reference to the greenstone belts.
Chapter 5 presents some details of the minerals
industry in the country.
Chapter 6 discusses the main characteristics of
the gold mining industry before investigating the
potential to develop the industry to a world scale
and highlighting some of the main challenges the
industry faces to grow. The chapter concludes
with an industry SWOT analysis.
Chapter 7 is a review of the principal gold mining
companies and their development projects within
the country. The review also reports the latest
Chamber of Mines production figures.
Finally, there are detailed individual reports
on the two companies who were involved in
sponsoring this major report.
The Editor
Based in London, Paul Burton is Editor of
World Gold Analyst, a position he has held for over
fourteen years.
Before joining the Mining Journal in 1996, Paul
spent over twenty years in various positions
within the mining industry. After initially working
as a mining engineer he spent much of his career
in mineral economics and minerals marketing in
South Africa.
Paul graduated from the Camborne School
of Mines in 1975 as a mining engineer and
subsequently obtained an MSc in Mining
the Witwatersrand, South Africa.
World Gold Analyst
World Gold Analyst has its roots back in the 1950s
when its predecessor, the Mining Journal Gold
Service, first started analysing and providing
commentary on South African gold shares.
In 2002, after a management buyout, World Gold
became an independent publication, and in 2006,
the name was changed to World Gold Analyst to
reflect a more analytical and selective approach
to reporting.
In 2008, World Gold Analyst formed a joint venture
with GFMS, the world’s foremost precious metals
consultancy, to continue to publish the quarterly
publication as well as the series of regional
investment reports. The new joint venture
company is called GFMS World Gold
World Gold Analyst’s long history of sound
reporting and independent analysis has given it a
reputation as a trusted and expert commentator
of all aspects of the gold industry.
The publications are read throughout the mining
investment world and its subscriber base includes
mining analysts, fund managers, private investors
and mining company executives.
 WO R L D
Chapter 2 – Overview
Z imbabwe has a long history of gold
production stretching back centuries. In
1975, despite being in the middle of a civil war,
the country was ranked the sixth largest gold
producer in the (western) world, with production
of 18.6 t.
In 1990, the country’s mines were still producing
at a similar rate and, after surviving the mid-
decade drought, which led to disruptive power
shortages, gold production rose to reach 29.7 t in
1999, a record which made the country the 16th
largest gold producing nation in the world.
However, the growth was not sustained in the
new millennium and by 2008 output had slumped
to just 3.5 t, which represented the lowest level
for 90 years. It picked up marginally in 2009
to 4.9 t.
What precipitated the collapse in gold production
was a catastrophic economic situation within
the country with hyperinflation and currency
devaluation, which meant that the Reserve
Bank was unable to pay for the mines’ gold
output.Virtually all the gold mines were forced
to close because of the economic situation in
October 2008.
US dollars, but no power
In March 2009, the new government of national
unity implemented reforms, which saw the
deregulation of gold sales, meaning that gold
producers were removed from the obligation to
sell their gold production to the Reserve Bank
and were free to sell on the international market
and get paid in US$. Mines reopened immediately
and stared to ramp back up to full capacity.
However, full production has proved elusive
because of serious problems with the supply
of power from the state grid. The industry is
probably working at only 40% of installed capacity.
In addition to scheduled load shedding, this year
the industry has been hit by random outages that
G O L D A N A L Y S T Z I M B A BWE 7
producers have struggled to cope with. Although
the government has acknowledged the problem
it does not have the funds to rectify the capacity
constraints and maintenance problems at the two
main power stations.
In the meantime, the gold producers have, or are,
implementing contingency plans by installing their
own power generating facilities to counteract the
power disruptions that have blighted operations.
It is more expensive but at least they can
guarantee the mine and plant can operate and
thus have a chance to increase operations up to
installed capacity.
Outside of the power problems, in the short
term, to reach its current potential, the industry
needs modest investment in plant. In the longer
term, it needs a radical rethink on its mining
strategy and a substantial injection of capital
to expand. The need for international funding
is critical, therefore, in whatever timeframe
and the availability of such funding will depend
on investors’ perception of the financial and
political risk in the country. Thus the recovery
of the economy and progress towards a new
constitution are key factors that are being
watched closely.
Difficult economic situation despite
reforms
The country’s economy has just been through
a period of unprecedented turmoil, which saw
hyperinflation and a rapidly depreciating currency
that led to the removal of the Z$ and installation
of the US dollar (and the South African Rand) as
the country’s currency, at least until 2012. After
severe economic woes in 2008 the economy
recovered in 2009 but there are signs that
recovery is slower this year.
In a rather sombre mid-year review in July, the
Minister of Finance acknowledged that gains in
the economy in 2009 were being eroded by a
threat to macro-economic stabilisation through
8 WO R L D G O L D A N A L Y S T Z I M B A BWE
the resurgence of inflation, the lack of capital,
modest recovery in capacity utilisation and a
general drop in confidence in the economy.
Inflationary pressures picked up during the first
half of 2010 with average annual inflation for
the year expected to rise to 4.5%. Meanwhile,
the Minister has revised growth rates for the
economy down to 5.4%
Zimbabwe’s biggest problem is its debt position,
which is hampering efforts to seek refinancing
and aid. The IMF, in an April 2010 report, was
unequivocal in its assessment that “Zimbabwe is in
debt distress, which is compounded by unresolved
economic policy challenges”. The IMF report
comments that achieving debt sustainability would
require a significant strengthening of economic
policies and an improvement of relations with
the international community whose support is
essential for securing debt relief.
To achieve that Zimbabwe needs to lose its
position as one of the pariah states in world
investment terms and start to be a place where
investors feel comfortable putting their money.
New constitution and elections key
In February 2009, on the formation of the new
unity government, the coalition partners agreed
to write a new constitution within eighteen
months. Progress on a new constitution, however,
has been slow with the two parties disagreeing
on many implementation issues.
The processes for constitution-making, holding
the referendum and proceeding with elections
by 2011 are already behind schedule by at least
12 months. The GNU was expected to last for
two years after which elections would be held
after February 2011.
Professor Rudo Gaidzanwa, of the University of
Zimbabwe, in writing specifically for this report,
is pessimistic on progress. “...it is unlikely that
elections will be held in 2011, judging from the
interests and statements of the political parties
involved. Thus, it is realistic to surmise that the
GNU might last at least four years instead of the
two years stipulated in the agreement and the
elections would be held in 2013 at the earliest...”,
he writes.
Such delays will do nothing to ease the fears of
international investors.
Concerns over new mining legislation
and indigenisation.
Turning to the mining industry more specifically,
there is also much uncertainty over amendments
to the Mining Act. The policy of ‘use it or lose it’
looks likely to be be included. The revised Act is
likely to be finalised in Q3 or Q4 this year. This
will go a long way to removing uncertainty over
what is expected of the industry.
However, the greatest uncertainty surrounds the
subject of indigenisation, one of the most divisive
issues that government and the mining industry
will have to resolve.
The Indigenization and Economic Empowerment
Act 14, 2007 was signed into law in April 2008 and
provided for all companies operating in Zimbabwe
to arrange for 51% of their shares or interests
therein to be owned by indigenous Zimbabweans.
The mining industry has accepted the broad
principles of indigenisation in the Act, but is
concerned about exactly how empowerment
should be achieved. The Chamber of Mines
has put forward a proposal that of the 51% to
be put into local hands, 15% is as equity with
the remainder being made up of credits in
equity equivalents, which could include local
procurement, CSI, support to the small scale
mining sector, skills development, starting
new businesses and any other socially and
economically desirable activities. The COMZ is
also keen to have a listing on the ZSE as a way of
acheiving indigenisation.
The discussion between the Chamber and the
government continues.
If uncertainty regarding politics and the economy
can be reduced, the gold mining industry could
develop into a major player again.
Zimbabwe’s gold mining industry has
potential to expand
Zimbabwe’s gold mining industry is characterised
by rich greenstone belts that support many small
gold mines, many of which are underground,
narrow vein mining operations, which are often
privatively owned.
The Zimbabwe Craton hosts some of the
world’s great greenstone belts. Greenstones
are one of the most extensive and productive
 WO R L D G O L D A N A L Y S T Z I M B A BWE 9

Despite the air of neglect, this plant at a former Central African Gold mine (now acquired by New Dawn Mining) is typically of the plant
that can be refurbished relatively easily to treat surface material (Photo: Paul Burton)

sources of gold on the planet and as such the
Zimbabwean rocks represent a huge potential
treasure chest for miners. Examples of this type
of mineralisation include the Yilgarn (Australia)
and Abitibi (Canada) belts that have supported,
and continue to support, large, world-class gold
mining operations.
problems are resolved (if not nationally at least
at individual mine level through provision of their
own generated power) by processing surface
material, such as old heap leach dumps and oxide
stockpiles. With some investment, perhaps from
cashflow, it might possibly produce at its reported
capacity of 20 t/y of gold from existing resources.

The geology should not be a constraint to large
scale mining but the miners in Zimbabwe have a
mindset that favours small, underground mines as
the default option. Hence they need to rethink their
strategy and there are a number of companies who
are already actively pursuing such plans.
Producers need funds to finance...
The industry could creak along in its current
state for some years, maybe reaching a third
of the output of its 1999 peak if the power
The gold producers and explorers have some
exposed oxide ore on surface, which, when taken
with old heap leach dumps, can be processed
through rather old mills and plants to get some
cashflow. But that is not their long-term goal.
They generally have an idea of the sulphide
potential that lies not far below the surface but
need intensive drilling programmes to define this
potential. Thereafter they will need capital to
develop projects and operations.
One of the keys to obtaining funding, which
invariably will come from overseas investors,
10 WO R L D G O L D A N A L Y S T Z I M B A BWE
is to adopt business structures that facilitate
investment. As mentioned earlier, many of the
companies are privately owned. Although in itself
this is not necessarily a bad thing, it is often a sub-
optimal way to run a capital intensive enterprise.
Private companies do not have the same degree
of access to the capital and equity markets as a
public quoted company will have and that can
limit the amount of finance the company can
raise to build mines, construct new plant and fund
exploration programmes.
...aggressive growth plans
Metallon Gold Zimbabwe, for example, is the
country’s largest gold producer, yet it is a private
company, owned ultimately by Metgold Ltd, a
London-based company. As readers will discover
later in Chapter 7, the company wants to pursue
an aggressive growth strategy that will see it
produce 1 Moz/y of gold within five years. To
achieve its targets, the company needs to raise, by
its own estimates, some US$600 million to invest
in capital projects. It can’t do that as a private
company. Therefore, Metallon is looking to go
public and list on one of the world’s international
resource stock exchanges (probably London).
It’s not alone. Duration Gold and Bilboes
Holdings, two other private gold producers,
are intent on obtaining listings to be able to
tap into the international capital markets to
fund expansion.
Bilboes Holdings, owned by GAT Investments,
is looking to raise some US$15 million to
undertake systematic drilling programmes on
two of its projects to take them through to
bankable feasibility study and thereafter to list
the company to raise the finance to develop
Table 2.1: Short and medium term production targets for the main producers
Company Short term production goal (1-3 years)
Koz/y Mine
Caledonia Mining 40 koz/y Blanket
Duration 60 koz/y 4 mines
GAT Investments 15 koz/y oxides
Metallon 56 koz/y 5 mines
Mwana Africa 30 koz/y Freda Rebecca
New Dawn Mining 35-50 koz/y Turk
RioZim 24 koz/y Renco
the resources. They already have an idea of
the potential on these former Anglo American
projects. A 2009 independent technical report
assessed the potential sulphide resources at one
of the projects as between 3 and 5 Moz.
Some of the companies are already public.
RioZim, for instance, is listed on the Zimbabwe
Stock Exchange. But the ZSE has limited
funding potential. Other companies are listed in
London. Caledonia Mining, African Consolidated
Resources and Mwana Africa are all London
companies, although Caledonia is listed in Canada
as well. What marks these particular companies
out is how diverse they are, both by commodity
and geographically. In the longer term it may make
sense for them to spin off their Zimbabwean gold
assets into a separate vehicle.
Perhaps ahead of the game with an international
listing, and thus access to the capital and equity
markets in North America already, is New
Dawn Mining.
Large, open pits may revitalise
the industry
So although most of the mines are currently small
producers, with the right type of exploration and
by adopting the most sensible mining method, they
could develop into mines comparable in scale with
those on other greenstone belts around the world.
Producers will have to do away with any
preconceived ideas that underground mining is
the way to go, of course. Looking at the Dalny
mine, for instance, now part of New Dawn
Mining’s portfolio, the company will investigate
the potential to not only mine, using bulk
mining methods perhaps, multiple reef systems
underground but also the ‘halos’ of lower grade
Long term production goal (3-5 years)
Koz/y mine
na na
300 koz/y 4 mines
340 koz/y oxides and sulphides
1 Moz/y 7 mines
50 koz/y Freda Rebecca
100 koz/y 3 mines
112 koz/y Renco
 WO R L D
gold mineralisation that the old timers missed
when following the quartz vein systems. Surface
work at Colne/Stella on the property has
showed that high grade reefs have lower grade
in between, over a total width of 12-15 m. This
sequence is replicated underground (at 60 m
depth) but the old miners only mined the two
high grade reefs, so management is working on
the theory that there may be economic grade in
between, which opens up the possibility of bulk,
perhaps open pit, mining.
Many of the underground mines are quite low
grade. Freda Rebecca for instance had a head
grade of just 1.76 g/t in the six months to end
March. Reserve grades are only 2.61 g/t.
Canada’s Detour Gold shows
what can be done
It is instructive to see some of the developments
on the Abitibi greenstone belt, in Canada. At
Detour Lake, for example, the former owner
mined the deposit for the bulk of its life from
underground. Between 1987 and 1999 the mine
produced 1.5 Moz of gold at a grade of 4.98 g/t
before it closed because of low gold prices.
In the last few years, with gold prices much higher,
a new company, Detour Gold, has evaluated
the deposit as an open pit prospect with
phenomenal results.
A feasibility study released in mid-2010, has
confirmed reserves of 11.4 Moz of gold
contained, capable of supporting production
of almost 650 koz/y for a capital investment of
almost US$1 billion.
Current Production
Gold production has shrunk alarmingly over the
past few years principally because of the poor
economic situation, and although the mines are
now operating once again, power disruptions
have limited production ramp ups. Production in
the first half of 2010 was 105 koz and is likely to
recover to 2007 levels.
Composition of the industry
The industry comprises large producers, small
producers, custom millers and by-product from
the platinum refineries.
G O L D A N A L Y S T Z I M B A BWE 11
The larger producers have been hardest hit
over the past few years by the tough economic
circumstances and collectively their proportion
has fallen from 80% to 67%. “Large”, though, is
something of a misnomer in Zimbabwean gold
mining terms as many of those classified as
such are small in global terms as classified by
World Gold Analyst. The largest producer in
2009, RioZim, produced only 24 koz. The COMZ
categorises producers as ‘large’ although their
production may amount to no more than 1 koz/y.
Figure 2.2: Zimbabwe gold production Source: COMZ
2006
2007
2008
2009
2010 H1
0 50 100 150 200 250 300 350 400
Production (Koz)
The custom millers represent an important
segment (17%) in the Zimbabwean production
picture. Their output has fallen since 2006, but
based on the first half of 2010 results, it could
rise again this year. On a percentage basis, their
influence has increased over the years.
Small miners now represent a tiny fraction of the
industry’s output.
By-product gold from the platinum producers is a
significant segment of output and presumably will
grow as the mines expand.
The industry by 6D status
Zimbabwe is unique out of the all the countries
and regions we have examined over the past few
12 WO R L D G O L D A N A L Y S T Z I M B A BWE

years in having hardly any early stage, Detection Imara, a pan-African investment group, notes
projects. We came across just seven (7%) in a recent research report that investment in
standalone, greenfields projects. There is some Zimbabwe’s mining sector is starting to pick up
exploration work going on, it’s just that it is all despite investor concerns about an impending
centred on existing brownfields sites or defunct indigenisation law.
mining properties. This is in total contrast to the
Indeed, there are tentative moves to invest in
likes of Ontario, Quebec, Ghana, Burkina Faso
the country and its mining industry in some
and Mali, all countries we have featured in recent
quarters. For example, a new Zimbabwean-
reports and where there is a greater emphasis on
focused fund, Masawara, has just been launched
greenfields exploration.
on London’s AIM.
In total, we catalogued one hundred projects,
In addition, to finish on a positive note, this year
ranging from the smallest defunct pit, to fully
the gold industry has seen new entrants into
operating mines at 1,200 m depth. In fact, we had
the country who are prepared to spend money
to introduce a new category to our 6D model of
investigating the exploration potential. Although
the industry – “Defunct”! We identified twenty
there are only two at present, and their spending
four properties (a fraction of the total around the
is modest, South African producer, DRDGold, and
country that we did not have any data on) where
Australia’s Cape Range are both exploring in joint
mining has ceased but the mineralisation is being
ventures with local companies.
re-evaluated.
We have defined thirty eight projects as being in
operation (i.e. Depleting).
The following pie chart shows the breakdown by
percentages.
Development  1%

Definition
13% Discovery17%

Detection  7%
Defunct  24%

Depleting  38%

In conclusion, we believe that the Zimbabwean

gold industry has a great future if it can attract
the capital necessary to get existing operations
up and running and then to conduct systematic
exploration programmes to develop the sulphide
resources. Attracting capital will depend on
how investors view the economic and political
situation within the country.
 WO R L D G O L D A N A L Y S T Z I M B A BWE 13

COMPANY SUMMARY
Company Project 6D Status
African Consolidated Resources Pickstone-Peerless Definition
Blue Rock Definition
Giant Definition
Chakari Detection
One-Step Discovery
Caledonia Mining Corp Blanket Depleting
GG Definition
Mascot/Penzance Definition
Cape Range Ltd Blue Duck Discovery
Eiffel Blue Discovery
Orcus Discovery
Inex Depleting
Carslone Globe & Phoenix Defunct
Golden Kopje Defunct
Chizim Investments Leny Discovery
Conquest Resources Beehive Defunct
Babs Defunct
Piper Moss Defunct
DRDGold Leny Discovery
Duration Gold Athens Depleting
Gaika Depleting
Queens Depleting
Royal Family Defunct
Vubachikwe Depleting
Auric Detection
Carry Detection
Tuff Nut Detection
Kernel Detection
Tiberius Detection
FA Stewart and Son Jessie Depleting
GAT Investments Bubi Depleting
Isabella Depleting
McCays Depleting
When Depleting
Gold Quarry Definition
John Mack Golden Valley Depleting
Metallon Gold How Depleting
Midwinter Definition
Shamva Depleting
Redwing Depleting
Arcturus Depleting
Mazowe Depleting
Motapa Definition
Mwana Africa Freda Rebecca Depleting
West Midlands Discovery
14 WO R L D G O L D A N A L Y S T Z I M B A BWE

COMPANY SUMMARY
Company Project 6D Status
Lonely Discovery
Makaha Discovery
Prince Phoenix Discovery
New Dawn Mining Golden Quarry Definition
Old Nic Depleting
Camperdown Definition
Turk Depleting
Venice Definition
Angelus Development
Dalny Definition
Ladville Discovery
Basil Payne Discovery
Ox Mining Inex Depleting
RioZim Renco Depleting
Cam and Motor Definition
One Step Discovery
Spot Discovery
Kenilworth Detection
Sab Rock Miners Blue Duck Discovery
Eiffel Blue Discovery
Orcus Discovery
Zimbabwe Mining Development Corporation Jena Defunct
Elvington Defunct
Sabi Defunct
Asumura Ghana
Ity (46%) Cote d'Ivoire
Others Ashanti, Bayham Mining, Bronfield Mines, Calcite, Depleting
Canterbury Mining, DTZ – OZGEO, Eureka,
Exmine Syndicate, F A Stewart, Forbes &
Thompson, Hunderson And Sons, John Mack &
Company, LE Starling, Olympus gold mines, Pan
African Mining, Sabi Consolidated
Others Ardcor Ltd + Bilbos Holding, Ascot, Boreal Defunct
Investments, Boulder Mining, Delta Gold
Zimbabwe, Epsom, Harris J E, Homestake
Mining, Horn Mine, Knobthorn Mining, Maligreen,
P E Steyn, Pegolin Mining Ltd, Sebwe Investments,
Tiger Reef
 WO R L D G O L D A N A L Y S T Z I M B A BWE 15

OPERATING PROJECT SUMMARY

Project Company 6D Status
Angelus New Dawn Mining Development
Arcturus Metallon Gold Depleting
Ashanti Others Depleting
Athens Duration Gold Depleting
Auric Duration Gold Detection
Basil Payne New Dawn Mining Discovery
Bayham Mining Others Depleting
Blanket Caledonia Mining Corp Depleting
Blue Duck Cape Range Ltd Discovery
Blue Duck Sab Rock Miners Discovery
Blue Rock African Consolidated Resources Definition
Bronfield Mines Others Depleting
Bubi GAT Investments Depleting
Calcite Others Depleting
Cam and Motor RioZim Definition
Camperdown New Dawn Mining Definition
Canterbury Mining Others Depleting
Carry Duration Gold Detection
Chakari African Consolidated Resources Detection
Dalny New Dawn Mining Definition
DTZ - OZGEO Others Depleting
Eiffel Blue Cape Range Ltd Discovery
Eiffel Blue Sab Rock Miners Discovery
Eureka Gold Mine Others Depleting
Exmine Syndicate Others Depleting
F A Stewart Others Depleting
Forbes & Thompson Others Depleting
Freda Rebecca Mwana Africa Depleting
Gaika Duration Gold Depleting
GG Caledonia Mining Corp Definition
Giant African Consolidated Resources Definition
Gold Quarry GAT Investments Definition
Golden Quarry New Dawn Mining Definition
Golden Valley John Mack Depleting
How Metallon Gold Depleting
Hunderson And Sons Others Depleting
Inex Cape Range Ltd Depleting
Inex Ox Mining Depleting
Isabella GAT Investments Depleting
Jessie FA Stewart and Son Depleting
John Mack & Company Others Depleting
Kenilworth RioZim Detection
Kernel Duration Gold Detection
Ladville New Dawn Mining Discovery
LE Starling Others Depleting
16 WO R L D G O L D A N A L Y S T Z I M B A BWE

OPERATING PROJECT SUMMARY

Project Company 6D Status
Leny Chizim Investments Discovery
Leny DRDGold Discovery
Lonely Mwana Africa Discovery
Makaha Mwana Africa Discovery
Mascot/Penzance Caledonia Mining Corp Definition
Mazowe Metallon Gold Depleting
McCays GAT Investments Depleting
Midwinter Metallon Gold Definition
Motapa Metallon Gold Definition
Old Nic New Dawn Mining Depleting
Olympus Gold Mines Others Depleting
One Step RioZim Discovery
One-Step African Consolidated Resources Discovery
Orcus Cape Range Ltd Discovery
Orcus Sab Rock Miners Discovery
Pan African Mining Others Depleting
Pickstone-Peerless African Consolidated Resources Definition
Prince Phoenix Mwana Africa Discovery
Queens Duration Gold Depleting
Redwing Metallon Gold Depleting
Renco RioZim Depleting
Sabi Consolidated Others Depleting
Shamva Metallon Gold Depleting
Spot RioZim Discovery
Tiberius Duration Gold Detection
Tuff Nut Duration Gold Detection
Turk New Dawn Mining Depleting
Venice New Dawn Mining Definition
Vubachikwe Duration Gold Depleting
West Midlands Mwana Africa Discovery
When GAT Investments Depleting
 WO R L D G O L D A N A L Y S T Z I M B A BWE 17

Chapter 3 – Zimbabwe:
Political & Economic Profile
3.1 Zimbabwe at a glance

Land Area: 391,000 Km2

Population: 11.9 million (2009)
Capital City: Harare, pop. 1.5 million
GDP: US$4.4 billion (2009 IMF estimate)
GDP per capita: US$303 (2009 IMF estimate)
Real GDP growth rate: 4.0% (2009 IMF estimate)
Mining contribution to GDP: 4%
Annual export Receipts: US$1.376 billion (2008 - RBZ)
Mining exports: 51%
Avg. inflation rate: 6.5% (2009 IMF estimate)
Ethnic groups: Shona 71%, Ndebele 16%, other African 11%, white 1%, mixed and Asian 1%.
Religions: Christianity 75%, offshoot Christian sects, animist, and Muslim.
Languages: English (official), Shona, Ndebele
Natural resources: Deposits of more than 40 minerals including ferrochrome, gold, silver,
platinum, copper, asbestos; 19 million ha of forest (2000).
Agriculture (19% of GDP): Types of crops and livestock: corn, cotton, tobacco, wheat, coffee, tea,
sugarcane, peanuts, cattle, sheep, goats, pigs.
Industry (24% of GDP): Manufacturing, public administration, commerce, mining, transport and
communication.
Trade (2009): Main trading partners (2008)--South Africa 32%, Democratic Republic of the
Congo 10%, Botswana 9%, China 6%, Zambia 5%, US 4%.
Total imports (2009): US$2.0 billion: most of these imports were food, machinery, fertilizers, and
general manufactured products. Major suppliers: South Africa 60%, China 4%,
Botswana 4%.

The UK annexed Southern Rhodesia from the
British South Africa Company in 1923. A 1961
constitution was formulated that favoured whites
in power.
In 1965, Ian Smith’s minority government
unilaterally declared its independence, but the
UK did not recognize the act and demanded
more complete voting rights for the black African
majority in the country (then called Rhodesia).
UN sanctions and an uprising finally led to
free elections in 1979 and independence (as
Zimbabwe) in 1980. Robert Mugabe, the nation’s
first Prime Minister, was installed as the country’s
President in 1987.
In 2008, after elections, ZANU-PF and MDC formed
a government of national unity with Robert Mugabe
as President and Morgan Tsvangirai, from coalition
partner MDC, as Prime Minister.
Source US Dept of State/IMF
3.2 Political developments
The following article was largely written by
Professor Rudo Gaidzanwa, from the University
18 WO R L D G O L D A N A L Y S T Z I M B A BWE
of Zimbabwe, on behalf of the Chamber of
Mines of Zimbabwe.
Background
Zimbabwe has been undergoing a slow,
sometimes difficult transition to democracy
for many years. During the 1990s economic,
social and political dissatisfaction was expressed
publicly by students, women, trade unionists
and workers, the landless, civil rights activists
and business interests who were all trying to
push for economic, social and political reform
in Zimbabwe. The economic decline throughout
the 1990s, combined with strikes in the 1997-
99 period, led to the rise of a strong civil rights
movement which culminated in the rejection of
the government-led draft constitution in 2000,
signalling the growth in the strength of the forces
of democratisation led by the Movement for
Democratic Change (MDC) under the leadership
of Morgan Tsvangirai.
Land and factory invasions followed the
rejection of the draft constitution in 2000, which
worsened the economy’s performance, which
depended significantly on agriculture. While the
ZANU-PF government took the stance that the
democratisation forces were a part of an alliance
led by the MDC, funded by western governments
and donors for the purposes of regime change,
the consistent gains by the opposition in elections
after 2000, showed that democratisation was
supported by a growing range of forces in
the population.
By 2005, economic assessments showed that
GDP had declined by 40% in the previous eight
years and halved on a per capita basis. Two thirds
of the population were living below the poverty
line on less than US$1 a day and unemployment
was estimated to be close to 70%.
Inflation stood at 1,200% and the fiscal
deficit-to-GDP ratio doubled from 7.1% in 2004
to 14.2%. Domestic debt rose from Z$3 trillion
in January 2005 to Z$12 trillion in June 2005.
Approximately two million people, including many
with high levels skills, had left the country while
Zimbabwe’s share of SADC’s GDP declined from
3.6% in 1996 to 1.4% in 2006 and the country
moved from being the second largest economy in
SADC to a ranking of 10th place in 2006. (Games,
2006; Hawkins, 2006.)
Negotiations between the MDC
and ZANU PF.
Negotiations between ZANU-PF and the MDC
started as a result of the economic problems
experienced in Zimbabwe prior to 2007 but were
accelerated by the political violence in March 2007.
The Mbeki regime, in South Africa, spurred by the
international community, pushed ZANU-PF into
negotiations with the MDC parties. South Africa
hosted the negotiations and an agreement was
reached to, 1) amend the constitution to enable
elections to take place, 2) elect a more legitimate
government, and 3) restore stability in Zimbabwe.
Constitutional amendments facilitated the
development of statutory changes, which evened out
the political playing field, diluted ZANU-PF’s massive
advantages of incumbency and state control over
resources, the media and the electoral processes.
The MDC won the first round of elections, in
March 2008, albeit without a 50% plus 1 majority
required for outright control over the presidency.
The official presidential election results showed
that Tsvangirai [MDC-T] won 47.9% of the votes
cast while Mugabe of ZANU-PF won 43.2% of
the votes cast. Senatorial election results showed
that the MDC-T had won 30 seats, ZANU PF 24
seats and MDC-M, 6 seats.
The victory of the MDC was historic because it
broke the hold of ZANU-PF on Zimbabwe and
signalled the end of the hegemony of a liberation
party in Southern Africa.This election also signalled
the consolidation of the forces of democracy as it
became evident that a significant section of ZANU-
PF supporters within and outside the government,
also supported the process of democratisation.
Given that Morgan Tsvangirai had not won a 50%
plus one majority according to the protracted
official count, a run-off within 21 days was
mandated by the negotiated Amendment and
Electoral Act.
The presidential run-off
The Presidential run-off was characterised by
unprecedented violence on the population
in the Midlands, Masvingo, Manicaland and
Mashonaland provinces.
On the 22nd of June 2008, the MDC-T publicly
announced its withdrawal from the run-off
because of the violence unleashed on its
supporters by the ZANU-PF youth militia and
armed forces. Mugabe remained in the one man
 WO R L D
race, arguing that Tsvangirai’s withdrawal was
unlawful and had no legal effect. The international
and regional bodies tried to stop the run-off,
arguing that the conditions were not conducive
to free and fair elections. However, their
arguments were disregarded by ZANU-PF and
the run-off went ahead.
Mugabe was duly declared the winner and sworn
in hastily, thereafter departing to an African
Union summit, in Egypt, where his reception
was lukewarm. The African Union called for a
Kenya-style negotiated agreement amongst the
major political parties, demonstrating that there
was declining tolerance for governments which
encouraged violence in their political systems,
threatened property rights and the rule of law
and violated the rights of their citizens.
The SADC bloc in turn, pushed for a negotiated
political settlement in Zimbabwe as a result of
the findings by the Mbeki government’s delegation
of generals from South Africa, who had been sent
to investigate the state of affairs in Zimbabwe.
According to the Democratic Alliance and civil
society organisations in Zimbabwe and South
Africa, the generals confirmed the gross violence
against certain sections of the population. This
increased the impetus of the SADC in seeking
mechanisms for ensuring stability in Zimbabwe.
In July 2008, Mbeki brought ZANU-PF and the
MDC parties to the negotiating table.
The political agreement between ZANU-PF
and the MDC formations was crafted amidst
conditions of economic collapse in Zimbabwe.
The Zimbabwe dollar was no longer accepted
as currency by the majority; schools and
hospitals had closed and 95% of the population
were unemployed.
The negotiations continued into December
when on the 13th, the draft constitutional
amendment, which marked a major step towards
the formation of an inclusive government in
Zimbabwe, was gazetted. On the 5th of February,
2009 both houses of parliament passed the Unity
Government bill unanimously, with an eye on the
impending African Union Summit which endorsed
the agreement between the political parties.
The post-crisis period: politics
and policies.
President Mugabe and ZANU-PF have been
forced to undertake political modernisation
G O L D A N A L Y S T Z I M B A BWE 19
and generate new initiatives to restore their
legitimacy in Zimbabwe. While many governments
in the SADC may express solidarity with ZANU-
PF, a significant number of them have borne the
brunt of the economic meltdown in Zimbabwe
through hosting refugees and asylum seekers and
providing services to them. The long decade of
conflict with the internal democratisation forces
and the international community has taken its toll
on ZANU-PF, building sufficient pressure to force
ZANU-PF into a political compromise.
The crisis period was followed by uneven
recovery in the various sectors of the
Zimbabwean economy. Food and beverage
sectors recovered faster reaching just over 60%
capacity utilisation while other sectors recovered
more slowly at 30-40% capacity utilisation. While
the adoption of multiple currencies stabilised
the economy, limited liquidity in the economy
remained, which has also reduced the resources
available for patronage politics and forced
the state to focus on delivering services to
the people.
Specific measures have been developed to curb
the powers of various functionaries such as the
Reserve Bank governor, ministers and others in
the state sector. Strict cash budgeting has curbed
excesses and diversion of budgets to unbudgeted
expenditures. Results-based management also
makes politicians and civil servants accountable
for their performance whereas in the past,
political imperatives dominated the civil service.
This stabilisation also halted the worst excesses
experienced during the hyperinflation period.
Policy framework
While the state press give the impression that the
policies and dominance of ZANU-PF continue
uninterrupted, there have been major shifts in
policies and behaviour by the state. For example,
notwithstanding the continued rhetoric against
donors, western countries and NGOs that are
active in the governance and human rights sector,
Mugabe has not signed the NGO Bill into law.
There are indications that the Look East policy
of the government has also nudged some western
governments towards re-engagement with
Zimbabwe’s political class in order to re-engineer
a more workable relationship with them.
In the context of the economic and social
problems in Zimbabwe, there is some recognition
20 WO R L D G O L D A N A L Y S T Z I M B A BWE
But which way is political reform? (Photo: Paul Burton)
of the possibility of winning back support from
the public through re-building infrastructure
and services.
Erratic supplies of energy, water and aged
telecommunications, rail, road and air services
and infrastructure all lead to dissatisfaction on
the part of voters.
As the economy becomes more privatised, as the
state is unable to sponsor any economic activity,
business in general, and the small and medium
business sectors in particular, gain significance.
Large corporations in the mining, manufacturing
and service sectors are the sole providers of
significant social services. Key institutions such
as the Grain Marketing Board (GMB) and the
National Oil Company of Zimbabwe (NOCZIM)
that used to deliver patronage have receded
in strength and have been replaced by private
business entities.
Indigenisation and empowerment
While indigenisation and empowerment are
accepted in principle by the private sector, there
are concerns over its method of implementation.
There has been very spirited debate over this
issue, resulting in the agreement to negotiate
the regulations by sector, taking into account
the specificities of capital, skills and other
requirements in each sector.
It is significant that within ZANU-PF and the
MDC parties, segments of these parties were
wary of policies that could ruin the economy by
seeing a repeat of the poorly-planned land reform
that had wrecked the agricultural sector after
2000. Thus, the triumph of negotiation signalled
that a shift in policy and practice had occurred
notwithstanding the militant rhetoric that
emanated from the radical fringe of ZANU-PF.
In the context of the constitution-making process
currently in progress, both parties recognize
 WO R L D
that there is a price to be paid at the polls
by any party that does not take the demands
of the populace seriously. While the parties
in the agreement may stall the constitution-
making exercise for various reasons, it is quite
clear that it is no longer prudent to ignore or
circumvent the wishes of significant players in the
economy and society.
The increased privatisation
of the economy
There has been a significant shift in focus
towards the economy as the form and content
of the economy has changed. While rent-seeking
activities could provide windfall incomes, there
is recognition that in a stabilised economy,
significant economic activities requiring
investment in capital, time and skills have
gained importance.
Thus, the struggle over the diamond fields
in Marange shows the attempt by ZANU-PF
functionaries to participate in the diamond
sector on a more formal basis. In this respect,
many of the political players who accumulated
wealth during the hyperinflationary era desire
to institutionalise and internationalise their
businesses, creating linkages with existing and
established players within and outside Zimbabwe.
For these politicians, there is a significant
incentive to stabilise the economy and society, re-
engage the international community and re-join
all the international bodies that can help further
their economic interests. Thus, it is critical to
recognise that while there remains a radical fringe
which can destabilise the recovery, there is also
a moderate segment that is not willing to remain
marginal to the recovery, the economy and the
accumulation of significant wealth. This is the
element that can support business interests. Since
the mining sector, particularly gold and diamonds,
remain the focus of many politicians’ interest,
there is merit in engaging these politicians in
dialogue over progress in the mining sector.
Thus, the post-GPA period has lowered the
political temperature even though there are
episodes of strident and radical rhetoric of
previous years. The segments of ZANU-PF that
are inclined towards reform share some common
ground with their MDC counterparts, raising
the possibility of a moderate middle faction
comprising elements from both parties. The
decade of bitter struggle against the international
G O L D A N A L Y S T Z I M B A BWE 21
community has taken its toll on ZANU-PF while
the long struggle against ZANU-PF over two
decades has also exhausted the MDC and the
civil rights and democracy movement. Thus, the
fatigue on both sides creates the possibility for
accommodation, notwithstanding the struggles
for supremacy within and between these
political formations.
The gradual engagement of the International
Financing Institutions, western countries and
donors since 2007 indicates that the politics of
expediency have taken hold while the rhetoric
against capital, the west, imperialism and
colonialism may give the impression that the
situation remains the same. While the ZANU-PF
segment of the government continues to extract
resources such as diamonds, the stringency of the
IFIs’ funding conditions prevents significant access
to state coffers. There is an inexorable shift
towards regularisation of trade, commerce and
other activities as shown by the compromise and
negotiations with the Kimberley Process players.
Slow reform within ZANU-PF as the
economy becomes more regularised
ZANU-PF continues to face problems with
succession but this may be an issue only as
long as the securocrats’ stake in the economy
is not assured. Many of the securocrats may
become significant players in business and
institutionalisation of their interests post-Mugabe
may be the price of peace. They are anxious about
their fate and in these situations they are usually
bought off as the price for stability. If this were to
happen, it would enable the moderate segment
of ZANU-PF to open dialogue with all sectors of
the population and the international community.
This is the option that the successive Mbeki
and Zuma governments in South Africa appear
to favour on the basis that ZANU-PF, with
the support of the securocrats, can help
avert political strife and state disintegration
in Zimbabwe. The South African government
appears to have shared the securocrats’ fears
about the MDC-T, assuming that the MDC is
at best an unknown quantity and at worst, a
western puppet, with little support amongst the
‘liberation’ leaders in the region, making close
ties to ZANU-PF necessary if only to ensure that
the ANC is not isolated in the region and the
continent on the Zimbabwe question.
22 WO R L D G O L D A N A L Y S T Z I M B A BWE
This option has been overtaken by events as the
MDC has remained quite popular in comparison
with ZANU-PF. The problem of succession and
the structures in the party that have supported
Mugabe against other leaders in ZANU-PF have
split ZANU-PF into factions and frustrated
attempts to reform the party, in the process
weakening the party quite substantially.
Thus, political compromise with one or both
factions of the MDC has occurred. The agreement
that was reached after the violent run-off under
an unreconstructed ZANU-PF is supported
by slow economic growth. Thus, the business
community can play a critical role in hastening
economic growth, effecting an economic
transition, which will not be controllable by
politicians. With or without a new constitution,
economic growth can help to support social and
political liberalisation.
In many countries such as those of South
East Asia, which have experienced significant
economic growth, political and social transitions
have not necessarily been violent and traumatic.
This scenario would be ideal if it were allowed to
unfold through significant economic investment
and growth. This scenario appears to have
started unfolding slowly as food availability in
the shops has increased, schools and hospitals
have re-opened, albeit with very little staff and
resources to deliver basic services. There is a role
for business in general, and the mining sector
in particular, to accelerate the unfolding of this
scenario through investment, job creation and
economic growth.
2011– A new constitution
and elections?
Progress on a new constitution, to replace the
one drawn up in 1979, has been slow with the
two parties within the GNU disagreeing on issues
such as funding and who should be collecting
views on the constitution, despite the fact that
they agreed on formation of the new government
to write a new constitution within eighteen
months. The ‘outreach’ programme, whereby
analysts are sent out to garner feedback on the
constitution through a series of public meetings
with local communities, only started in June this
year, so there is little likelihood of anything being
drafted this year. According to observers the
process is almost a year behind schedule.
This long journey to a new constitution, one
that lessens the powers of the President and
guarantees greater civil freedom, is not going
to be easy one as there are already claims by
MDC-T and human rights group Zimbabwe Peace
Project and Zimbabwe Election Support Network
of intimidation of villagers by ZANU-PF members
during the outreach process. There are concerns
that the lead up to charter reform could be
marred by the kind of violence that the country
experienced in 2008 in the presidential run-off.
ZANU-PF has even stated that elections may
go ahead regardless of whether or not the new
constitution is in place. Clearly it plays into
their hands to frustrate the process for as long
as possible.
The SADC and its mediator, South African
President Jacob Zuma, will have a key role to
play here.
Meanwhile President Mugabe was back to his
most radical rhetoric recently, telling the West
to go to hell with their interfering and sanctions.
“We should not allow colonial thieves to take our
resources” he said.
That should encourage foreign investment!
3.3 The Economy
Hyperinflation
The country’s economy has just been through
a period of unprecedented turmoil, which saw
hyperinflation and a rapidly depreciating currency
that led to the removal of the Z$ and installation
of the US dollar (and the South African Rand) as
the country’s currency, at least until 2012.
The backdrop to this was that in May 2008, the
official Z$ to US$ exchange rate was revised to a
floating rate of about Z$165,000,000=US$1, from
a fixed rate of Z$30,000=US$1.
After the official inflation rate reached
231,000,000% in July 2008, the government
ceased to release consumer price index data,
mainly because there were few goods available
for purchase on the shelves of stores!
In August, the newly-issued Z$10,000,000,000
dollar bill was revalued to Z$1. Hyperinflation,
which was estimated to have reached
about 500,000,000,000% in September and
89,700,000,000,000,000,000,000% in November,
 WO R L D
A trillion isn’t worth what it used to be!
was finally dampened in late 2008 by the de facto
migration from the Zimbabwe dollar to foreign
currencies1.
STERP
One of the first acts of the unity government,
which came into office in mid-February 2009,
was to introduce measures to tackle the
unprecedented economic crisis. Its “Short Term
Economic Recovery Plan (STERP)” came in at a
time of “unprecedented levels of hyper-inflation,
sustained period of negative GDP growth
rates, massive devaluation of the currency, low
productive capacity, loss of jobs, food shortages,
poverty, massive de-industrialisation and general
despondency”2
One of the main aims of STERP was to ensure
that there was increased capacity utilisation
in every sector of the economy, especially
agriculture and mining, where the government
undertook to abolish the retention of commodity
earnings by any authority in Zimbabwe with
the promise, however, to “review upwardly
the taxation and royalty structures in line with
international standards”.
But the key response to hyperinflation was the
dispensation that “all enterprises are free to trade
in South African rands, United States dollars or
any other convertible currency”. This effective
G O L D A N A L Y S T Z I M B A BWE 23
dollarisation of the economy came in tandem
with the agreement that gold producers could
be paid international prices in US$, a move that
galvanised the industry back into production.
The improvement in economic fortunes was
immediate and dramatic in 2009 through to 2010
as the inflation rate was brought under control
and stability returned to the markets. Shops were
full again.
STERP was an emergency package to see the
country through to the end of the year. It was
to be followed by a five-year plan to guide the
economy through to 2015 but although this was
drafted it was never inacted and remains a ‘work
in progress’.
The Ministry of Finance did, however, follow up
in December 2009 with its 2010 Budget and a
subsequent The Three Year Macro-Economic
Policy and Budget Framework: 2010-2012 (STERP
II) the same month.
The aim of STERP II was to build on the
foundation laid by STERP and continue the
restoration of economic stability and growth in
the country. The Ministry of Finance recognised
that although inflation had been controlled,
there was still much to do with the economy
(still fragile with a number of challenges which
required urgent attention, including: capacity
24 WO R L D G O L D A N A L Y S T Z I M B A BWE

The centre of Bulawayo where trade has grown again (Photo: Paul Burton)

utilisation still low at below 50%); unsustainable GDP growth

debt of over US$5 billion and arrears of over
The Minister has revised growth rates for
US$3 billion, and capacity constraints in both
the economy after a better than expected
public and private sectors.
performance by agriculture but a poorer
State of the economy in 2010 performance from mining, because of the
In July this year, the government released its 2010 shortage of power. The following table shows
Mid-Year Fiscal Policy Review (FPR), so we have up- projected growth rates for selected key sectors
to-date data on how the economy is performing3. of the economy.
The tone of the FPR was rather subdued with an
Table 3.1: GDP growth
acknowledgement that the gains in the economy
in 2009 were being eroded by a threat to macro- Sector 2008 % 2009 % 2010 % (P)
(A) (E) Original Revised
economic stabilisation through the resurgence
of inflation, the lack of capital, modest recovery Agriculture -39 15 10 19
in capacity utilisation and a general drop in Manufacturing -33 10 10 5
confidence in the economy. Mining -17 9 40 31
Some of the key measures of performance are Overall GDP -15 6 7 5
A - Actual, E – estimate, P – projected Source: Ministry of Finance (3)
discussed below.
Inflation
Bank lending
Inflationary pressures picked up during the first
half of 2010 with year-on-year inflation recording There has been some increase in bank lending
0.7% in January, 1% in February, 3.5% in March, throughout the first half of 2010 but most loans
4.8% in April 2010 and 6.1% in May 2010. The remain short term (90 days or less) with longer-
Finance Ministry has revised average annual term loans accounting for less than 3% of the
inflation for the year to 4.5%. overall deposits. Credit can cost up to 30%.
 WO R L D G O L D A N A L Y S T Z I M B A BWE 25

Equity market dominated by a high wage bill constituting over

Trading volumes on the Zimbabwe Stock
Exchange have been low this year. The industrial
index which started the year at a high of 157, had
dropped to 127 by June 2010, whilst the mining
index, fell from an opening of 210 to 143.
Current account
The current account remains in deficit. Total
exports for the first four months of 2010
were US$870 million against imports of
US$1,545 million, resulting in a trade deficit of
US$675 million, which was largely financed by
SDR allocations and reduction in banks’ foreign
assets. The Minister of Finance expects the gap to
widen further in 2010, to US$1.3 billion.
60% of the budget. This situation leaves little
money left over to pay for the accelerated
reconstruction agenda.
Debt overhang
The debt overhang, which the Minister estimated
at US$6.7 billion, is probably the single most
critical factor that will inhibit any economic
growth. While it remains, the country will not be
able to access development assistance.
The IMF, in an April 2010 report back4, was
unequivocal in its assessment. “Zimbabwe
is in debt distress, which is compounded
by unresolved economic policy challenges”,
it concluded.

Challenges facing the government
and the economy
The Mid-Year Fiscal Policy Review identified
several challenges to sustained, rapid economic
growth, the most important of which we
discuss here.
Lack of inflows of capital
The estimated lack of inflows of investment capital
resources is US$10 billion annually or US$30
billion over the period 2010 – 2012. The bulk of
these resources can only come from external
sources. However, the country has not been able
to attract meaningful external support in the form
of lines of credit, foreign direct investment and
donor support, according to the Finance Ministry.
Lack of fiscal space
The Minister is having problems balancing
the budget. With a fragile economy, revenue
collections estimated at US$1.75 billion are
consumed largely by current expenditures
According to IMF statistics, at the end of 2009,
total public and publicly-guaranteed debt
amounted to US$6.9 billion or 157% of GDP, of
which 102% of GDP was in arrears. Zimbabwe’s
overdue financial obligations to IFIs include
the World Bank (US$731 million), African
Development Bank (US$483 million), and the
IMF (US$140 million).
The IMF report comments that achieving
debt sustainability would require a significant
strengthening of economic policies and an
improvement in relations with the international
community whose support is essential for
securing debt relief.
Reserve Bank problems
The IMF is blunt in its assessment that “The
Reserve Bank of Zimbabwe is in financial distress
and suffers from weak governance”.4
The government has taken actions and with
the amendment of the Reserve Bank Act and
the subsequent appointment of the Reserve

Table 3.2: Projected growth rates for selected indicators

Estimated Projected
2008 2009 2010 2011 2012 2013 2014 2015
Real GDP growth (%) -14.5 4.0 2.2 0.0 1.0 1.8 2.0 2.0
Nominal GDP (US$B) 3.9 4.4 5.1 5.5 5.8 6.2 6.5 6.9
Inflation (%) ots 6.5 5.0 5.0 5.0 5.0 5.0 5.0
Money supply , M3 (US$M) 314 1,276 1,511 na na na na na
Current account balance (US$M) -945 -1,323 -1,183 -724 -795 -839 -885 -915
Official reserves (US$M) 6 312 114 114 114 115 115 115
External debt (US$B) 5.8 7.1 7.7 8.1 8.7 9.3 9.8 10.4
External debt (% of GDP) 148 163 149 148 149 151 151 151
Source: IMF4  Ots = off the scale!
26 WO R L D G O L D A N A L Y S T Z I M B A BWE
Bank Board, the focus is now on implementing
the requisite governance reforms through
restructuring, and downsizing of the Bank to align
it to core functions under the multi-currency
regime. Central to these reforms, is also the issue
of addressing the indebtedness of the Reserve
Bank estimated at about US$1.5 billion.
Power supply
The supply of adequate power is a huge issue that
the government admits it has thus far not dealt with.
The Minister stated in the Mid-Year Review that it
was important that government deals urgently with
the key issues of power generation, including the
refurbishment and upgrading of power transmission
lines and of power stations. However, he has
allocated only US$15 million to the problem when,
by his own estimate, the upgrade of Hwange and
Kariba, the country’s main generating stations, will
require a total of US$139 million.
Mining legislation
The Minister is concerned that the mining
industry does not contribute enough to the
Companies need a Mining Lease to mine on a scale such as at Duration Gold’s ML 16 property (Photo: Paul Burton)
fiscus. Therefore he has urged amendments to
the Mining Act to include greater transparency
in exploration licence registration, the
entrenchment of the principle of ‘use it or
lose it’ with regard to claims, greater mineral
beneficiation and greater taxation of mining
companies with the warnng that “the current
legal structure codified in our Mining law that the
State can only look to corporate tax and royalties
from the mining sector is unsustainable”. He
has announced the increase in royalties on gold
revenue to 4%.
Economic prospects
Table 3.2 (previous page) shows projected
economic growth indicators according to the
latest IMF report4.
3.4 Mining Law & Mineral Policies
The Mines and Minerals Act is the principal law
governing mining in Zimbabwe. This law provides
security of tenure and has clear provisions for
acquisition, maintenance and relinquishing of
mining title.
 WO R L D G O L D A N A L Y S T Z I M B A BWE 27

The Act (as amended) has been in force since process of signing off EPOs already approved will
1965. Currently it is being amended again to resume later in 2010.
improve the administration and management of
A Mining Claim is a permit to prospect and
the ‘use it or lose it’ policy and government and
mine over a small area and usually several claims
the Chamber of Mines have consulted with each
are grouped to form a block of claims. Ordinary
other throughout the process. The revised Act is
claims are up to 25 ha and a block of claims may
likely to be finalised in Q3 or Q4 this year. This
be transformed into a Mining Lease for simplicity
will go a long way to removing uncertainty over
of administration.
what is expected of the industry.
Meanwhile, there are two types of mining licences
The Act is enforced by the Ministry of Mines &
available for gold companies.
Mineral Development (MMMD).
A Mining Lease confers the exclusive right of
Although not solely applicable to the mining
mining any ore or deposit which occurs within
industry, the Indigenization and Economic
the vertical limits of the area covered by the
Empowerment Act 14, 2007 was signed into law
lease. A Special Mining Lease (SML), on the
in April 2008 and provided for all companies
other hand, applies where the holder of one or
operating in Zimbabwe to arrange for 51% of
more contiguous registered mining locations
their shares or interests therein to be owned by
intends to establish or develop a mine where the
indigenous Zimbabweans. The COMZ has put
investment will be wholly or mainly in foreign
forward the views of the mining industry that
currency and will exceed US$100 million and the
the equity component should be restricted to
mine’s output is intended principally for export.
15%, with credits in equity equivalents, including
SMLs are valid for 25 years.
local procurement and support to the small scale
mining sector, making up the remainder (see 2010 budget and mining
section 6.3 for more details). There were a number of provisions brought in
Mineral rights and licences in this year’s Budget that will affect the mining
industry. Among these were conditions to enforce
All mineral rights are vested in the President and
the “use it or lose it” philosophy as it applies to
an application to take out a licence must be made
mining claims. In order to discourage holders of
to the MMMD through a process defined in the
mining claims from retaining un-worked ground
Act. The Mining Commissioner issues exploration
for speculative purposes, the Minister introduced
licences, of which, for gold, there are two main
a fee of US$100 per ha per annum on unworked
applicable types.
claims and removed the option to spread taxable
A Prospecting licence may be taken out by any income earned from the sale of mining claims
person who is permanent resident of Zimbabwe over a period of four years.
for a period of two years. This licence entitles the
Also in the Budget, the royalty rate for gold was
holder to undertake reconnaissance work but they
increased from 3% of gross market value to 3.5%,
are not allowed to drill or remove any materials.
from the start of 2010. However, the Minister of
Any person or company (local or international) Finance recently further increased the royalty
may take out an Exclusive Prospecting rate to 4%, effective October 1, 2010. Designated
Order (EPO) for a period of three years with financial institutions now collect the royalties
an option to extend the period by an additional instead of Fidelity Refineries.
three years. The area under licence was limited
The Budget also had bad news for gold miners
to 65,000 ha in the case of gold, but in the 2010
in the shape of an increase in the corporate tax
Budget (presented on December 5, 2009) the
rate to 25% in line with other industry sectors.
Minister of Finance proposed a reduction to a
Previously the gold producers received a special
maximum 20,000 ha for each EPO. The Minister
dispensation that had them paying just 15%, while
further proposed that application and renewal
the basic corporate tax rate was 30%.
fees for EPOs be set at US$100,000.
The COMZ is also working with the MMMD on a
Incidentally, the President has not signed any
new mineral development policy for the country.
EPOs since 2002 but the Ministry of Mines and
Mineral Development has announced that the Presently, government participation in mining
28 WO R L D G O L D A N A L Y S T Z I M B A BWE

is through Zimbabwe Mining Development

Corporation (ZMDC).The ZMDC was formed in
1982 for government to participate in the mining
sector and to save companies that were being
threatened to close. It is active in exploration,
mining and giving assistance to cooperatives and
small-scale miners.
The Minerals Marketing Corporation of
Zimbabwe (MMCZ) was formed in 1992 and is
responsible for marketing all the country’s non-
gold minerals and metal products.
References:
(1) USGS, The Mineral Industry of Zimbabwe, USGS Minerals Yearbook 2008, April
26, 2010
(2) Short Term Emergency Recovery Programme (STERP) launch report, Ministry
of Finance, February 2009
(3) Mid-Year Fiscal Policy Review, Ministry of Finance, July 2010
(4)  IMF Staff Report for the 2010 Article IV Consultation, April 29, 2010

Bibliography
Biti, Tendai. “The Death of Constitutionalism: Constitutional Amendment No. 17 and
the State of the State.” Unpublished paper, 2005.
Bracking Sarah, ‘Development Denied: Autocratic Militarism in Post-election
Zimbabwe.’ Review of African Political Economy, Nos: 104/105, 2005, pp 341-357.
Brett E.A. “Political Victories and Economic Defeats: Managing the Post-Election crisis
in Zimbabwe.” Unpublished paper. 2005.
Games, Dianna. A Nation in Turmoil: The Experience of South African Firms doing
Business in Zimbabwe. Business in Africa Report NO. 8, South African Institute for
International Affairs, 2006.
Hawkins, Tony. ‘Still Standing: The economic, political and security situation in
Zimbabwe 2006 and implications for the SADC region.’ Paper presented to the
Institute for Security Studies, University of Pretoria, 4th May 2006.
Hilsum Lindsey, ‘Briefing: Re-enter the Dragon: China’s New Mission in Africa,’
Review of African Political Economy, 2005, pp 419-425.
International Crisis Group, “Zimbabwe’s Continuing Self-Destruction”. Africa Briefing
No 38, Pretoria/ Brussels 6th June 2006.
Lodge Tom, ‘Quiet Diplomacy in Zimbabwe: A case study of South Africa in Africa.’
Unpublished mimeograph. 2004.
Maroleng Chris, ‘Situation Report: Zimbabwe: Increased securitisation of the state?”
Institute for Security Studies, September 2005.
Movement for Democratic Change (Tsvangirai), “MDC Proposals for the
Resolution of the Zimbabwean Crisis: Sign posts to Peace, Democracy, Legitimacy,
Reconstruction and National Healing.” Harare May 2006.
Muleya Dumisani, ‘Government Spooks run Economy’, Zimbabwe Independent
7th April 2006.
Raftopoulos, Brian. ‘Reflections on the Opposition in Zimbabwe: The Politics of
the Movement for Democratic Change (MDC).’ Raftopoulos, Brian and Alexander,
Karin. (eds) Reflections on Democratic Politics in Zimbabwe. Institute for Justice and
Reconciliation, Cape Town, 2006.
Rupiya, Martin. ‘Explaining the Transformation of Relations between the Armed
Forces and Society in Zimbabwe since 2000,’ in Karen Alexander (ed) The Future
of Democratic Politics in Zimbabwe Institute for Justice and Reconciliation, Cape
Town 2005.
 WO R L D
Chapter 4 – Geological Overview
of Zimbabwe
by Paul Wheeler BSc, ARSM
Z imbabwe’s geology can be divided into two
main regions: a large portion of the central,
east and south of the country is underlain by
basement complex rocks (deformed metamorphic
and granitoid rocks) of the Zimbabwe Craton;
while the smaller western and northwestern
portion of the country is composed of younger,
folded and deformed sedimentary rocks of the
Magondi Basin and Karoo Supergroup, large tracts
of which are covered by Tertiary sands. A third
significant feature of the country’s geology is the
Great Dyke, a SSW-NNE trending ultramafic-mafic
dyke complex that cuts across almost the whole
country.
The Zimbabwe Craton is bordered on three
sides by younger mobile belts made up of
meta-sedimentary and meta-volcanic rocks: the
Zambezi Belt to the north, the Mozambique Belt
to the east and the Limpopo Belt to the south.
The craton is made up of highly deformed and
regionally metamorphosed grantitic gnesses
and granitoids of Archean age (older than
2,500 million years) that formed in the root
zones (basement) of mountain building regions
of the crust. The great age of the terrane means
that these basement rocks have been uplifted
and deeply eroded to produce the current level
of exposure.
The granitoid rocks of the basement complex
consist of coarsely crystalline rocks with
compositions from tonalite through to
adamellite; true granites are rare. The gneissic
rocks are foliated or banded grey gneisses
and darker coloured migmatites, the majority
of which are tonalitic in composition. Both
granitoids and gneisses contain cross-cutting
and conformable sheets and veins of quartz and
aplite and xenoliths of ultramafic and banded iron
formations are common, particularly in the gneiss.
A younger generation of granitoid rocks intruded
the basement complex some 2,650 million years
ago. These rocks are predominantly medium-
coarse grained adamellites and they form
G O L D A N A L Y S T Z I M B A BWE 29
extensive sheets and batholiths in the central and
eastern parts of the country.
Greenstone belts are widely superimposed upon
the underlying crustal basement throughout
the craton and are the principal source of gold
mineralisation. In the northeastern part of the
craton innumerable dolerite sills, dykes and
sheets occur, the volumetric quantities of which
represent a significant magmatic activity.
The Zimbabwe Craton is separated from the
Kaapvaal Craton to the south by an extensive
zone of ENE trending high grade metamorphic
rocks, some 600 km long and 300 km wide,
known as the Limpopo Mobile Zone. Within
Zimbabwe the mobile belt is largely represented
by amphibolites, gneisses and granulites of an
amphibolite -granulite facies, which show a
penetrative ENE foliation.
In the north of the country the Zambezi
metamorphic belt extends for some 900 km
from Wankie in the west through Kariba to
the northeast, although much of the western
part is covered by much younger cover rocks.
Deformation in the high-grade metamorphic belt
is complex and the lithologies are dominated
by garnet-mica-schists and granitic-gneisses
and granulites.
West of the Zimbabwe Craton, the Magondi
Basin was formed during a period of crustal
extension after the emplacement of the Great
Dyke, and represents the northwestern margin
of the Zambezi Basin. The basin is filled with a
thick sequence of sediments of Pre-Cambrian
age, subdivided into the Deweras Group in the
east, comprising arkoses, greywackes, argillites
and basaltic lavas, overlain by the Lomagundi
Group consisting of quartzites, slates and
greywackes and to the west by the Piriwiri Group
of extensive phyllites and greywackes. Felsic and
mafic volcanics are intercalated with sediments
near the base of the sequence and all rocks are
deformed and metamorphosed.
30 WO R L D G O L D A N A L Y S T Z I M B A BWE
The southern part of the Magondi Basin is
covered by sediments of the Karoo Supergroup
and Tertiary sandstones and aeolian sands of the
Kalahari Group. The Karoo sediments were laid
down in three major basins during the Permian
to Jurassic, with similar lithologies in all the
basins. Terrestrial clastic sediments predominate,
with feldspathic sandstones, mudstones and
shales, and including the coal beds of the Wankie
Coalfield. These sediments are overlain by a thick
succession of basaltic lavas.
The Karoo basalts are most spectacularly
revealed in the Victoria Falls on the far western
border with Zambia, but they reach their most
extensive outcrop in the south and south-eastern
part of Zimbabwe, where they are intruded by
several large granophyre bodies.
The Kalahari sediments occur extensively
between Bulawayo and Victoria Falls in the
western part of Zimbabwe and consist of poorly
consolidated sandstones and sands.
Greenstone belts
Zimbabwe’s greenstone belts are principally
composed of bimodal assemblages of mafic,
ultramafic and felsic volcanics and associated
intrusives, clastic meta-sediments and banded
iron formations (BIF). These assemblages of
rocks were emplaced as a pronounced series
of elongate, linear volcanic belts; tens of kms
wide and several hundred kms long; the term
greenstone reflecting the colour of chloritic and
epidote alteration seen in the typical assemblage
of basic volcanic and volcanoclastic units.
Thirteen major greenstone belts have been
identified, and are believed to have developed
in three successive stratigraphic phases: the
Sebakwian Group, the Bulawayan Group and the
Shamvaian Group. Each of the greenstone belts
has its own distinctive structural and lithological
setting, but are commonly intensely folded and
faulted with major strike-slip ductile shears and
are separated from each other by granitoids and
gneissic rocks of the basement complex. The
metamorphic grade and intensity of deformation
various between the greenstone belts but is
mainly in the lower to medium greenschist facies.
Dominant lithologies in the Sebakwian Group are
komatitic and tholeitic basalts, intercalated clastic
meat-sediments, BIFs and ultramfic intrusions.
The Bulawayan Group is the most important
host for gold mineralisation and has been divided
into an older Lower Greenstone sequence and
a younger Upper Greenstone sequence, which
volumetrically is the dominant greenstone
assemblage. The Shamvaian Group is the youngest
division within the greenstone stratigraphy
and is dominated by rhyolite-dacitic tuffs and
agglomerates, porphyry intrusives and clastic
meta-sediments, in particular greywackes.
Within the Lower Greenstone sequence of
the Bulawayan, bi-modal basaltic and andesitic
volcanics and volcaniclastics predominate, with
interflow BIFs and meta-sediments. The Upper
Greenstone sequence includes a lower meta-
sedimentary unit (greywackes, conglomerates and
limestones), which is an important stratigraphic
marker horizon; overlain by a thick assemblage of
komatiitic lavas, tholeiitic basalt to andesitic lavas
and pyroclastic rocks, capped by volcaniclastic and
clastic and chemical sedimentary rocks.
Historically the Midlands (Kadoma-Hartley) gold
belt, around KweKwe and Gatooma in central
Zimbabwe, was the most significant greenstone
belt, hosting the country’s two largest (both in
excess of 4 Moz) production mines at Cam and
Motor and Globe & Phoenix as well as numerous
smaller operations. Brownfields exploration
around former mines in the Midlands belt is
the focus of a number of junior companies,
notably New Dawn Mining at Dalny and African
Consolidated Resources at Giant-Gadzema.
To the south of the Midlands Belt, the Shurugwi-
Gweru belt is centred on the city of Gwelo,
and the Selukwe mining district hosted
significant deposits at Wanderer and Tebekwe.
The former lies at the centre of a package of
concessions, including Camperdown and Golden
Quarry, which are being re-explored by New
Dawn Mining.
In more recent years the production and
exploration focus switched to the Shamva-
Harare, Bulawayo-Buli and Gwanda belts, centred
on their namesake cities in the northeast and
south west and south of the country respectively.
As well as the historic Shamva mine (1.5+ Moz),
the Shamva-Harare belt currently hosts one of
the country’s main producers, Mwana Africa’s
Freda-Rebecca mine.
One of the country’s other key producer in
 WO R L D
recent years has been Caledonia Mining’s Blanket
mine, in the Gwanda belt. On account of the
close proximity of the Gwanda belt to the
Limpopo Mobile Belt, the grade of metamorphism
at Gwanda is distinctly higher than in the typical
Zimbabwean greenstone belts, reaching upper
greenschist to amphibolite facies.
Great Dyke
The Great Dyke forms a band of hills and ridges
that trends nearly 540 km, north-south through
the centre of Zimbabwe. In geological terms
the Great Dyke is not a dyke, but a long, linear
series of lopolithic (lenticular) shaped ultramafic
intrusions, from 3 to 12 km wide, that been
emplaced stratiformly along a NNE-SSW trending
graben structure.
Four complexes have been identified from north
to south, the Musengezi, Hartley, Selukwe and
Wedza complexes. Each of these complexes has
an elongate, gently dipping synclinal structure
and can be sub-divided stratigraphically into a
lower ultramafic sequence of peridotites (dunites
and harzburgites) and pyroxenites together with
narrow bands of chromitite; and an upper mafic
sequence consisting of a variety of plagioclase-
rich rocks, such as norites and olivine gabbros.
The dyke lies within the Zimbabwe craton and
is flanked by granitic rocks for most of its length.
The Great Dyke has been dated at 2,575 million
years old and is essentially undeformed, which
indicates that the last phase of major deformation
in the craton occurred before its emplacement.
Economically the Great Dyke is of significant
importance, with major chromite and platinum
resources. Chromite occurs in a varying number
of bands towards the ultramfic base of each
complex and is mined throughout the Dyke.
Base-metal sulphides (Ni-Cu-Co +/- Au) and
platinum group metals (PGMs) occur in the
uppermost pyroxenite unit just below the
ultramafic-mafic contact.
Gold mineralisation
At least 95% of Zimbabwe’s total gold production
has been derived from orogenic lode-gold style
mineralisation which occurs within many of
the greenstone belts. Lode gold mineralisation
is predominantly structurally controlled with
G O L D A N A L Y S T Z I M B A BWE 31
a broad spectrum of styles from extensively
mineralised ductile shear systems through
stockworks and multiple anastomosing and
bifurcating quartz veins to massive quartz veins
and breccias. In around half the known deposits,
the host rocks are mafic volcanics but ultramafics,
banded iron formations and granitoids are
also important.
Shear zones are typically steeply dipping to
vertical on average; individual fractures within
the main shear zones exhibit a broad range of
orientations with patterns reflecting riedel and
compressive fracturing which has developed by
consistent progressive deformation. Lode systems
may have strike lengths in excess of 1,000 m but
individual ore shoots and veins are usually only of
the order of 10-100 m in strike length.
In lode-gold deposits, gold and gold-bearing
sulphide mineralisation is present in quartz-filled
shear zones and in altered wallrocks adjacent
to the shear zones. Gold occurs as free gold
intimately intergrown with quartz, as microscopic
grains with sulphide minerals and as late gold in
fractures within vein quartz or coating sulphides.
Gold is most commonly fine grained, although
occurrences of coarse visible gold have been
found in numerous orebodies.
Although quartz vein related mineralisation is
most commonly seen, in some deposits (or even
as a second type of mineralisation within the
same deposit) disseminated, sulphide replacement
mineralisation hosts the bulk of the gold. Typically
these zones have little quartz, silica is present
as chert or chalcedony, and sulphide minerals in
various combinations are major components.
Sulphide mineralisation is principally disseminated
assemblages of pyrite, pyrrhotite, arsenopyrite
and galena, with lesser amounts of chalcopyrite,
tetrahedrite, stibnite and minor tellurides and
scheelite. Sulphide-rich ores are generally not
refractory and respond well to conventional
treatment in gravity-CIL/CIP circuits; although
increasing proportions of sulphides may require
preparation of a flotation concentrate prior
to leaching.
Numerous small deposits and several larger ones
are associated with banded iron formations or
granitioids. In the latter, gold bearing quartz-
sulphide veins and shear-hosted disseminated
mineralisation is of a similar style to orogenic
32 WO R L D G O L D A N A L Y S T Z I M B A BWE
Figure 4.1: Simplified geological map of Zimbabwe showing main greenstone belts (courtesy, Duration Gold)
type, but there is a much clearer relationship with
the emplacement of granitoid intrusions and the
subsequent remobilisation of gold.
These BIF units typically form topographic
features of considerable strike extent and are
hard, cherty ferruginous rocks with repeated
magnetite-quartz +/- grunerite bands which
in many deposits are tightly folded and heavily
fractured. Auriferous sulphide minerals occur as
a replacement of the iron-rich minerals along
fractures and in the hinges of the folds.
In all deposit types, wallrock alteration is
dominated by carbonatisation, with siderite
and ankerite the commonest phases. Sericite
is very common in mafic and granitoid hosts,
with magnesite , fuchsite and talc common in
ultramafic hosts and pyrite and pyrrhotite in
banded iron formations. Pyroxene rich wall rocks
are commonly altered to hornblende, chlorite
and carbonate.
Gold deposits are found in the Limpopo Mobile
Belt, outside of greenstone belts, but the type of
mineralisation is also that of orogenic lode gold,
with similar styles and ore mineralogy. Minor gold
production is reported as a by-product of base-
metal and PGM production from mines on the
Great Dyke.
Placer (alluvial) deposits in streams draining
areas of primary gold mineralisation are not
significant sources of gold in Zimbabwe. Gold in
the weathered, eluvial (“float”) profiles of primary
deposits is more widespread; but its exploitation
is largely by small-scale, artisanal mining using
traditional panning and sluice methods.
Key References
Foster R.P. and Piper D.P. 1993, Archean lode gold deposits in Africa. Ore Geology
Reviews 8.
Schulter.T. and Trauth, M.H. 2008; Geological Atlas of Africa 2nd Edition, Springer
Stagman.J.G., 1978 An Outline of the Geology of Rhodesia, Zimbabwe Geological
Survey Bulletin No.80 (Reprinted 1981).
 WO R L D G O L D A N A L Y S T Z I M B A BWE 33

Chapter 5 – Mineral Production

in Zimbabwe

A ccording to the US Geological Survey1,

Zimbabwe’s diverse mineral output in 2008
included about 3% of the world’s chromite and
in terms of export revenues minerals play an
important role accounting for some 35-40% of
foreign exchange earnings historically.
platinum production, and about 2% of the world’s In the strictest sense Zimbabwe is not a
asbestos, lithium, palladium, and vermiculite resource-based economy – agriculture still is
production. Significantly, gold production is not the major contributor to GDP – but mining is
mentioned in world terms. a significant contributor to the economy and, in
fact, should be a bigger component of the nation’s
There are approximately thirty minerals or
wealth generating enterprises.
mineral-based commodities produced in
Zimbabwe, which account for about 4% of But while the platinum industry has been able
the gross domestic product (GDP), with the to capitalise on the commodity price boom of
platinum-group metals the most economically the last few years, the gold mining industry, and,
significant. Although not significant in GDP terms, through taxes and royalties, the country’s coffers,
have missed the chance to capitalise on record
high prices. Historically gold has been the main
Figure 5.1: Mining Contributions to Zimbabwe Economy3
contributor to value of mineral production in the
country, accounting for 44% but this fell to 27%
in 20072 and has no doubt fallen even further
Agriculture as gold production slumped in 2008 and 2009,
despite record high gold prices.
Govt.
I will go into more detail on the reasons why
Other Services gold output has suffered so dramatically in the
following chapter, but first a brief look at the
Manf. platinum industry and some of the other mineral
commodity sectors within the country.
Finance
Platinum
Trans & Comm
Zimbabwe hosts the second-largest known
Trade platinum reserves in the world. It is the third
largest platinum producer in the world with
Real Est production of 229 koz in 2009 (up 27% from
2008) and the fifth largest palladium producer
Tourism with output also rising 27% in 2009, to 177 koz4.
Production for both metals was at an all-time
Water, Elec
high as both producing mines in the country
Mining
completed expansions during the year.
Impala Platinum (Implats), the world’s second-
Construction biggest platinum producer, controls the country’s
largest platinum mine, Ngezi, through Zimplats
0 5 10 15 20
(87% owned).The Ngezi mine completed Phase 1
Source: Mining Sector: Engine for Economic Growth. Douglas Munatsi3
of what may turn out to be multiphased expansions
34 WO R L D G O L D A N A L Y S T Z I M B A BWE
in September 2009, as the concentrator reached
design throughput of platinum-in-matte of 180 koz,
almost double the production in 2008. Production
in 2009 was 131 koz of platinum and 100 koz
of palladium.
According to Reuters, Zimplats recently said
it planned to go ahead with its US$500 million
expansion project to lift annual output by 50% to
270 koz of platinum. It’s Hartley mine remains on
care-and-maintenance.
At Mimosa (Zimplats 50%, Aquarius Platinum
50%), the Wedza Phase 5 expansion project
was completed in mid-2009 and production of
platinum-in-concentrate has risen to a fraction
below design capacity of 100 koz of platinum.
Anglo American Platinum (Amplats) the world’s
top platinum producer, is due to start production
at its Unki mine in Q4. It will eventually produce
65 koz/y.
Kazakh miner ENRC owns 60 % of the Bokai
platinum project, which is undergoing a feasibility
study. The first stage is expected to produce
163 koz/y of PGMs in concentrate.
Platinum reserves and mines are centred on the
Great Dyke, a highly elongated, layered igneous
intrusion that runs about 550 km through centre
of the country with geology similar to the Bushveld
Igneous Complex, in neighbouring South Africa.
The most important economic sequence of
ultramafic rocks is the Main Sulphide Zone
(MSZ), a lithologically continuous layer that is
typically between 2 m and 3 m thick that forms
an elongated basin. It generally contains iron–
nickel–copper sulphides, while elevated PGM
concentrations occur towards its base.
Last year, Zimbabwe Chamber of Mines president,
Victor Gapare, told a conference in Johannesburg
that Zimbabwe was expected to be producing
1 Moz/y of platinum within the next ten to
fifteen years.
Base metals
Bindura Nickel Corp, which is majority owned
by gold producer, Mwana Africa, is the only
integrated nickel miner, smelter and refinery in
Africa. It was shut down in November 2008 and
Mwana is seeking to raise finance to reopen the
firm’s Trojan mine before the rest of the complex.
Meanwhile, RioZim, another company with gold
operations, aims to refurbish its Empress nickel
refinery, which refines nickel and copper matte
from Botswana. It also hopes to start chrome
mining in a joint venture project and produce
30 kt/y of chrome concentrate a year from 2012.
Zimasco, owned by Chinese mining and trading
group Sinosteel Corp, has a capacity of around
200 kt/y of ferrochrome, making it the country’s
biggest ferrochrome producer.
Diamonds
Rio Tinto owns 78% of the Murowa diamond
mine, and RioZim owns the rest. Rio Tinto has
begun preparatory work for a US$300 million
expansion programme to raise capacity sixfold.
A review of expansion feasibility studies is due
to be completed by the end of 2010. Capacity is
300 kct/y, but output was only 124 kct last year.
Coal
According to Chamber of Mines’ figures,
Zimbabwe’s coal output has sharply declined
from nearly 6 Mt in the 1990s to just over 1.7 Mt
in 2009. The decline in coal output is largely
due to lack of funds to recapitalise the Hwange
Colliery Company, in which the cash-strapped
Zimbabwe government is the largest single
shareholder, with 43%.
RioZim owns the Sengwa coal mine in north-
western Zimbabwe in a 50-50 joint venture
with Rio Tinto. Small-scale mining at Sengwa,
which produced 25 kt/mth for the local tobacco
industry, was stopped in May 2008 at the peak
of Zimbabwe’s economic crisis. Sengwa has ore
reserves of 519 Mt and a total resource of 1.3 Bt.
The company is currently holding discussions
with undisclosed potential investors interested in
setting up a coal-fired power plant at the mine.
References:
(1) “The Mineral Industry of Zimbabwe” by Philip Mobbs, US Geological Survey
2008 Minerals Yearbook, April 2010
(2) Working Paper 1, “The Mining Sector in Zimbabwe and its Potential
Contribution to Recovery”, by Professor Tony Hawkins, 2009 United Nations
Development Programme, Comprehensive Economic Recovery in Zimbabwe
(3) “Mining Sector: Engine for Economic Growth”, Douglas Munatsi, Group
Chief Executive Officer, BancABC, 6th Annual International Mining in Africa
Conference, June 2009
(4) Platinum & Palladium Survey 2010, published by GFMS, 2010.
 WO R L D
Chapter 6 – The Gold Industry:
A SWOT Analysis
6.1 Characteristics of the gold mining
industry
Zimbabwe’s gold mining industry is
characterised by:
•  Rich greenstone belts, that support
•  Many small gold mines (>5,000), which are
•  In many cases, underground, and are
•  Often privatively owned, and
• Undercapitalised and seriously lacking in
modern plant.
Let’s look in more detail at each of those points.
Greenstone belts
As readers will have learned in Chapter 4, the
Zimbabwe Craton hosts some of the world’s
great greenstone belts. Greenstones are one of
the most extensive and productive sources of
gold on the planet and as such the Zimbabwean
rocks represent a huge potential treasure chest
for miners.
A number of the Zimbabwean gold producers
have noted the comparable size and make-
up between the Zimbabwe Craton and the
Yilgarn Craton, of Western Australia. Although
the Zimbabwean version has a slightly
different structural history, the rock types and
mineralisation styles are very similar. Also there
are often comparisons made between the
Zimbabwean greenstones and the metavolcanic
rocks found in the Barberton area, of South
Africa, and the Abitibi Belt, in Canada.
The Yilgarn and Abitibi belts in particular, are
well-endowed gold regions that have supported,
and continue to support, large, world-class gold
mining operations. The same cannot be said
of Zimbabwe.
Small mines syndrome
That brings us to the second characteristic of the
Zimbabwean gold mining industry – many small
mines. There are probably no accurate records,
G O L D A N A L Y S T Z I M B A BWE 35
but having been on the ground there, a figure of
5,000 mines does not sound unreasonable. There
are certainly that many deposits.
The density of shafts dotted around the
countryside on the greenstone belts is
reminiscent of the huge number gold mining
tenements and individual shafts in Bendigo, when
the Victorian gold rush was on, or the hundreds
of tin and tin/copper mines that surrounded Carn
Brea at the height of Cornwall’s tin mining boom
in the 1800s.
As an illustration of the number and scale of
operations, a recent technical report, prepared
for New Dawn Mining, catalogues one hundred
and sixty nine mines in the Chakari area alone,
with historic production ranging from just one
ounce (the aptly named Tiny mine), through 6 koz
at Melton, to 36 koz at Brilliant, to the largest
Dalny, which produced over half a million ounces.
Elsewhere, in the Gwanda greenstone belt,
Caledonia Mining claims that its Blanket mine
is the largest of the three remaining large gold
producers in a gold resource area that has given
rise to no fewer than two hundred and sixty eight
gold mines.
The potential, and need, for consolidation is great.
Underground works!
And most of those are underground mines.
The Zimbabwean miners do love to burrow
underground out of the hot, African sun! I saw
numerous old workings underground where the
old time miners simply followed the quartz veins
along narrow drives, mining the veins as they
went along. And this was often their only form
of exploration – sink a prospecting shaft and
develop along the strike of any veins.
There are, of course, some open pits, but these
are very small, oxide diggings that are reminiscent
of the surface scratchings in the Western
Australian goldfields 30 years ago or more before
Alan Bond orchestrated consolidation which led
to the formation of Kalgoorlie’s famous ‘Superpit’.
36 WO R L D G O L D A N A L Y S T Z I M B A BWE
Figure 6.1: This chart shows how weak the Zimbabwean banks are in relation to other Southern African countries’ banks
Source: Mining Sector: Engine for Economic Growth”, Douglas Munatsil
Private land – keep out!
The fourth characteristic of the industry is the
high incidence of private ownership of the gold
mines. Although in itself this is not necessarily a
bad thing, it is often a sub-optimal way to run a
capital intensive enterprise. Private companies do
not have the same degree of access to the capital
and equity markets as a public quoted company
will have and that can limit the amount of finance
the company can raise to build mines, construct
new plant and fund exploration programmes.
Metallon Gold, for example, is the country’s
largest gold producer, yet it is a private company,
owned ultimately by Metgold Ltd, a London-
based company. As readers will discover later
in Chapter 7, the company wants to pursue
an aggressive growth strategy that will see it
produce 1 Moz/y of gold within five years. To
achieve its targets, the company needs to raise, by
its own estimates, some US$600 million to invest
in capital projects. It can’t do that as a private
company. Therefore, Metallon is looking to go
public and list on one of the world’s international
resource stock exchanges (probably London).
It’s not alone. Duration Gold and Bilboes
Holdings, two other private gold producers,
are intent on obtaining listings to be able to
tap into the international capital markets to
fund expansion.
International funds needed...
I would stress the international markets as
being a key to unlocking a supply of funds for
much needed capital injections. Unfortunately,
the local Zimbabwean Stock Exchange does not
have the appetite or the resources to support
large financing programmes. RioZim, which owns
the Renco mine and is looking to re-develop
the famous Cam and Motor mines, is only listed
locally. Last year it abandoned an attempt to raise
US$40 million through a placement of its shares.
This year it is looking to try again.
A raising via equity is the only real option
open to most companies as there is a lack of
enthusiasm from local banking institutions in
supplying such risk capital. To be honest they
probably don’t have the funds. A recent paper1
suggested that the country’s bank deposits total
just US$400 million against the country’s needs of
US$8.5 billion.
Looking at the funding situation on a regional
comparative basis, figure 6.1 (above) shows how
Zimbabwe’s banking sector measures up against
some of its neighbours in terms of number of
banks’ size of deposits.
...to buy plant and explore
Finally, in this look at the characteristics of the
Zimbabwe gold industry, I have noted that it is
undercapitalised and lacking modern plant.
 WO R L D
I intimated this in the discussion of funding
above. Invariably, with all the gold producers
and explorers that I saw or spoke to, they have
some exposed oxide ore on surface, which, taken
with old heap leach dumps, can be processed
through rather old mills and plants to get some
cashflow. But that is not their long-term goal.
They generally have an idea of the sulphide
potential that lies not far below the surface but
need intensive drilling programmes to define this
potential. For this they will require an injection
of capital, firstly to bring existing plants up to
scratch to process the surface material and
secondly, to expand the operations. This is what
Metallon, Duration et al are striving to do.
6.2 Is there potential to develop
the industry?
We have learnt in the preceding section
that Zimbabwe has the right rocks for gold
production, but there are questions as to
whether the geometry and scale of the
mineralisation and deposits is such that they can
support larger scale operations or are miners
restricted in what they can achieve by physical
dimensions of deposits? The answer seems to be
that, for historic reasons, most of the restrictions
are of the miners own making. The norm of
small mines doesn’t have to be the template
going forward.
A very interesting article by the Zimbabwe
Geological Society (ZGS) in 20052 argued
passionately that conventional wisdom on lack of
reserves, and a geology that was only amenable
to hosting small scale mines, was wrong.
So let’s evaluate the industry characteristics in a
more objective fashion.
Common ground in greenstones
Firstly, the issue of geology of the greenstones. As
the ZGS article explains, terranes like the Yilgarn
and the Abitibi have greenstone belts associated
with crustal scale shear zones, whereas in
Zimbabwe the gold deposits are found in
association with more localised shear zones. The
authors also note the difference between the
classical greenstone belts and Zimbabwe with
regard to the width of alteration zones – the
Australian/Canadian belts have much wider
alteration zones.
They commented, “These features would tend
G O L D A N A L Y S T Z I M B A BWE 37
to suggest that the geological environment in the
Zimbabwe Craton was not favourable for the
development of large gold deposits. However,
current exploration is indicating that world-class
deposits are not necessarily associated with large
alteration zones and crustal scale shear zones”.
They go on to conclude that, “Recent work has
shown that the Zimbabwe Craton, like other
similar geological environments elsewhere, is
highly heterogeneous, being cut by crustal scale
shear zones that impart a conspicuous control
on gold localisation. It is therefore becoming
increasingly apparent that structural and
lithological controls affecting localisation of gold
deposits in Australian and Canadian Cratons are
in many ways analogous to the Zimbabwe Craton
situation. There is no reason why mines of the
same significance as those in other Archaean
granite-greenstone terrains should not be found
in the Zimbabwe Craton”.
Many, small mines – blame the British!
The next point in our checklist of characteristics
is the fact that there are a great many gold
mines and they are invariably small scale. From
the discussion above, the geological potential
seems to be there, so what has stopped the
development of gold operations to rival those
in Australia and Canada? For an understanding
of that conundrum we have to look back in
history to see how the mining industry developed
within the country.
Zimbabwe’s countryside is littered with a vast
number of ancient gold workings as the first
miners discovered and worked the easy-to-find,
easy-to-extract auriferous quartz veins where
they outcropped on the hillsides. The Portuguese,
and more latterly the British, came to the country
and took over where the ancients left off.
As a slight, but interesting digression, the country
was first formally occupied by the British
South Africa Company, under Cecil Rhodes,
in September 1890, under a Royal Charter
granted by the British Government. As one
modern day explorer notes, “Whilst this Charter
conferred both administrative powers as well as
commercial rights, it was probably the only British
proclaimed territory ever settled primarily for its
mineral wealth”6.
Anyway, by concentrating on the old, recognised
deposits the Europeans sought to short cut the
38 WO R L D G O L D A N A L Y S T Z I M B A BWE
The Vubachikwe mine, owned by Duration Gold, is typical of the many underground mines in private ownership, although the depth of
workings at 1,200 m is far from typical (Photo: Paul Burton)
more formal exploration process in order to
extract the gold as quickly as possible. In many
ways they worked in a similar fashion to the band
of small and informal miners that continue such
practices to this day.
“The usual methods of exploration by the early
Europeans were to get information from local
villagers about the existence of old workings,
on which prospecting shafts were sunk”, the
ZGS notes.
Such methods are notoriously inefficient as they
fail to take into consideration the geological
setting and the potential of the whole mineral
deposit. With a more systematic and objective
approach they could determine not only the
scope of the whole deposit, but also which
techniques would serve them best for optimal
exploitation of the mineral wealth.
One reason they were constrained in what
development they could do was the fact that
they often did not have rights over more than
a small patch of land and so couldn’t investigate
and expand along strike. For that we must
blame the piecemeal division of the land to the
prospectors by the early chiefs. Breaking up a
discrete mineralised zone into small parcels to
appease demand from a hoard of prospectors
with gold fever in their eyes, may have seemed
like a good idea at the time but it is self-defeating
in terms of sustainability. Nature, in her wisdom,
doesn’t work with such artificial boundaries. But
such criticism with the benefit of hindsight is
probably harsh.
Again, the ZGS article sums it up well. “...
strike extensions of many mines have not been
investigated because of an entrenched tradition
of going underground before fully understanding
lateral extensions of the ore bodies – a result
of the lack of usage of geologists by many
mining companies. Probing of lateral extensions
of ore bodies is also prohibited by adjoining
 WO R L D
The many mapped vein systems near surface at the Dalny mine, which new owner New Dawn Mining will investigate and evaluate for
open pit potential (Photo: Paul Burton)
mining claims belonging to different individuals”,
they conclude.
Failure to recognise the ‘big picture’ has been an
enduring fault with the industry but, hopefully,
perspectives will change.This is not to say that
all mines should be big. Many deposits may not
be suitable and in any case there are unique
circumstances in Zimbabwe, such as empowerment
and social welfare issues, that suggest there is a
continuing role for a small mining sector.
Open pits are also mines!
So the mine developers went ‘down’ and not ‘along’
on their leases, leading to the still-current fascination
with working underground. As the ZGS states, “It
is astonishing to note that this form of exploration
became so entrenched in the exploration culture
of Zimbabwean prospectors that it has remained
basically unchanged up to today”.
So to recap, the geology should not be a
G O L D A N A L Y S T Z I M B A BWE 39
constraint to large scale mining but the miners
have a mindset that favours small, underground
mines as the default option.
As I’ve tried to explain in the proceeding
paragraphs, there is now no reason why they
can’t start to think in terms of the large open pit
model that has been applied so successfully in
Western Australia. Perhaps even more compelling
than the Australian experience are some of the
developments on the Abitibi greenstone belt, in
Canada. At Detour Lake, for example,the former
owner mined the deposit for the bulk of its life
as an underground operation. Between 1987 and
1999 the underground mine produced 1.5 Moz of
gold at a grade of 4.98 g/t before it closed because
of low gold prices.
In the last few years, with gold prices much higher,
a new company, Detour Gold, has evaluated
the deposit as an open pit prospect with
phenomenal results.
40 WO R L D G O L D A N A L Y S T Z I M B A BWE
A feasibility study released in mid-2010, has
confirmed reserves of 11.4 Moz of gold
contained, capable of supporting production
of almost 650 koz/y for a capital investment
of almost US$1 billion. Could any of the
Zimbabwean underground mines be re-invented
in such a spectacular fashion, I wonder?
A lesson from West Africa
But for that type of mining they need access to
funding, which takes us to another characteristic
of the industry, the fact that it is undercapitalised
and seriously lacking in modern plant.
Here’s where the government has a major role to
play. The country needs a stable, democratically
elected government with sensible mining laws and
tax regime that is not punitive to the industry
in order to encourage inward investment from
abroad. The government only has to look to
the western limb of the continent to see how
successful Ghana, for instance, has been in
attracting capital and building a major gold mining
industry for the benefit of the economy and
ultimately, its people.
Or what about the dramatic rise in gold
production in Burkina Faso and Mali, two other
countries situated on the greenstone belt of the
West African craton? Burkina Faso’s production
grew from 2.7 t in 1999 to a forecast 13.5 t last
year and Mali saw its gold output increase from
25.4 t in 1999 to 56.9 t in 2006, before declining
slightly to 48.9 t3 as a result solely of exploration
and development by foreign mining companies.
We’ll pick up again on the critical, but thorny,
issue of government support in a later section,
but I think the industry needs to change its
approach and look to consolidate leases/
claims which cover identified mineralised zones,
especially when they are a continuation of one
strike, so they can then properly investigate
prospective claims through the use of modern
geophysical and geochemical techniques (instead
of just following a quartz vein) and design
operations to suit the size of the deposits.
To be fair, all the companies I spoke to realise
this and if they haven’t already started to employ
modern exploration methods to define the
sulphide potential, then they have them in their
plans, they just can’t afford them yet!
And as far as M&A activity is concerned, New Dawn
Mining has just moved to acquire another producer
paralysed by debt and taken a big step in the path to
sensible consolidation within this industry.
6.3 Major risk factors that will
challenge growth
In this section we will look at some of the most
critical challenges that the gold producers and
the politicians face in order to ensure a thriving
gold mining industry. Some can be overcome by
structural political overhaul; others by capital
investment which can only come after the first
condition is satisfied.
Politicians need to get it right
Looking from the outside, the level of political risk
in Zimbabwe is the most fundamental hindrance
to the development of a robust gold (and other
minerals) industry. The government has a key role
to play in making sure Zimbabwe loses its image of
being one of the pariah states in world investment
terms and starts to be a favoured destination for
mining companies and a place where investors feel
comfortable putting their money.
One of the most authoritative reports on mining
investment moods each year is conducted by
Canada’s Fraser Institute4. The Fraser Institute
surveys companies worldwide and compiles a
“Policy Potential Index”, which, as the Institute
explains, serves as a report card to governments
on how attractive their policies are from the
point of view of an exploration manager.
The Policy Potential Index (PPI) is a composite
index that measures the effects on exploration
of government policies, including uncertainty
concerning the administration; interpretation,
and enforcement of existing regulations;
environmental regulations; regulatory duplication
and inconsistencies; taxation; uncertainty
concerning native land claims and protected
areas; infrastructure; socioeconomic agreements;
political stability; labour issues; geological
database; and security.
As the Institute notes in its introduction, “In
today’s globally competitive economy where
mining companies may be examining properties
located on different continents, a region’s policy
climate has taken on increased importance in
attracting and winning investment”.
In the 2009/10 survey, published a few months
ago, Zimbabwe scores poorly (as it has done for
 WO R L D
many years). On the composite index scoring
it came 69th out of 72 countries, with only the
Philippines, Ecuador and Venezuela below it
(Quebec was number one).
As the Institute commented, “Unfortunately, (out
of the bottom 10 scorers) except for California,
these are all developing nations which most need
the new jobs and increased prosperity mining can
produce”.
Breaking down the PPI into its component
factors reveals some interesting observations
with regards to the political risk perception of
Zimbabwe. For instance, 96% of the respondents
said that the lack of political stability within
Zimbabwe was either a strong deterrent or
dissuaded them completely from investing there.
76% felt as strongly about physical security within
the country.
On the issue of “Mineral potential, assuming
current regulation/land use”, the country was
placed 67th out of 72, with only 9% of those
surveyed indicating that the current situation
encourages investment. However, this figure
rises to 41% when “Policy/mineral potential,
assuming no land use restrictions in place, and
assuming industry ‘best practices’” is the question
asked, which is an indication of how geologically
prospective the land is deemed.
Financial and funding risks tied
to credible government
There are certainly signs that the government is
responding to the country’s problems and it may
not be just coincidence that this happen since
the formation of the GNU in early 2009. The
dollarisation move and the introduction of “Short
Term Economic Recovery Plan (STERP)” was a
very effective measure, but they needed to do
something as having hyperinflation and a currency
that devalues by the minute is no good for the
economy or would-be investors. Obviously,
investors want to see stability and a clear path
forward for economic and political reform. Thus
the installation of a new constitution and free
elections will be critical landmarks.
The longer term, fundamental reason for the
slump in gold output within the country over the
past few years, was the deteriorating economic
situation, which meant that there was a lack of
investment by companies in mine infrastructure
not only because of rampant inflation but also
G O L D A N A L Y S T Z I M B A BWE 41
because producers were unable to benefit from
the rising gold price and increase cashflow. They
were either paid in Z$ of eroding value or, as
happened eventually last year, were not paid at all
by the Reserve Bank of Zimbabwe.
Under the legislation that existed up until
early 2009, the gold miners were forced to sell
their gold production to the Reserve Bank of
Zimbabwe’s subsidiary, Fidelity Printers and
Refiners, but when that organisation found itself
in dire straits in 2008 it reneged on agreements
and refused, or was unable, to pay the mining
companies. The companies were left with little
alternative but to place their mines on care-and-
maintenance.
The unity government, to its credit, recognised
that something had to be done as up until recent
years gold mining had become an important
source of income, accounting for more than
50% of export earnings. And so, the government
introduced STERP in an effort to stimulate the
economy by liberalising the mining sector.
Probably the most significant initiative in the
reform package was the deregulation of gold sales,
which meant that gold producers were removed
from the obligation to sell their gold production
to the Reserve Bank and were free to sell on the
international market and get paid in US$.
These days, gold bullion is delivered, as still
required by Zimbabwean gold-mining law, to
the government-operated Fidelity Printers and
Refiners, but for sampling only and onward
delivery, often to the Rand Refinery in South
Africa. The Rand Refinery undertakes final
refining and sell the resultant gold with 100%
of the proceeds being credited to companies’
Zimbabwean bank accounts in US dollars within
5 days of sale.
When the Reserve Bank stopped paying for gold it
issued bonds in lieu of payment, which were due to
be redeemed in August this year but thus far many
companies have been left holding their certificates
when they are in desperate need of cash!
Power to the industry
The limited availability of power in Zimbabwe
has severely hampered miners over the past year
or more at a time when they are trying to ramp
up production to installed capacity levels after
the 2008 hiatus. Capacity utilisation of mining
operations and treatment plants is only about
42 WO R L D G O L D A N A L Y S T Z I M B A BWE

40% at present because of the inability of the by poor reliability of the power stations and
state power provider, ZESA, to maintain output faults in the grid system, which has meant
to match demand. that supply has often been closer to half the
Last year, at least, the schedule of load shedding was country’s needs. Essential maintenance work at
agreed between ZESA and the individual miners so Kariba and Hwange requires US$139 million,
that they could plan their operations accordingly. according to the Minister of Finance. He has
This year the industry has been hit by random allocated US$15 million from this year’s budget
outages that they have struggled to cope with. for the maintenance work. To add generating
capacity, Zimbabwe would need to spend some
New Dawn Mining reported at some length US$4 billion for expansions at Hwange and
earlier this year in its March quarterly results, Kariba (US$0.8 billion), and new power stations
highlighting how critical this issue is. New Dawn at Gokwe North (US$1.6 billion) and Bakota
said, “Management has previously identified the
(US$1.8 billion).
reliability and availability of power as one of
the main strategic threats to its operations and The current situation according to the Minister
growth plans. The reason for this is that, generally of Finance, is shown in the following table.
in the southern African region, there has been
a shortage of power for a number of years and Table 6.1: Power generating facilities in Zimbabwe
in particular Zimbabwe has, for a considerable Power Station Installed Current
period, experienced rotating scheduled outages Capacity Output
(load shedding), as well as unexpected power cuts Kariba South 750 KW 735 KW
at irregular intervals”. Hwange thermal 920 KW 574 KW
Harare thermal 80 MW 0
Demand for power countrywide is of the order
Munyati thermal 80 MW 0
of 2,000 MW. Zimbabwe has power generating
capacity of around 1,900 MW (920 MW at Bulawayo thermal 90 MW 0
Source: Ministry of Finance5
Hwange coal-fired power station and 750 MW
at the Kariba hydro plant)5 and, in theory, can
import some 300-500 MW from neighbours New Dawn Mining’s management is fairly gloomy on
Zambia and Mozambique. So there is already a the matter. “Due to this general shortage of power
capacity shortage, which has been exacerbated in the southern Africa region, Zimbabwe cannot

China’s Gold Industry –
A case study in attracting
foreign capital (and then
driving it away!)
China’s gold production has risen
significantly in recent years to a
position, where with an output of
324 t in 2009, it was the world’s
largest gold producer, a position it
has held for three years.
This success comes as a result of
substantial government investment
during the 1990s, and despite the
still fragmented and archaic nature
of most mining operations.
Gold mining in China stretches
back into antiquity but the
country has not, until recent years,
been a producer of significance in move away from State control and
global terms. towards private ownership.
Most of the China’s production In the 1980s and 1990s the State
comes from small, underground poured money into the gold
mines working vein deposits with industry in an effort to consolidated
little mechanisation or infrastructure. production units and encourage the
There are thought to be over 1,000 growth of large mines. But by 2000,
small to medium-sized mines in although the country’s output had
operation throughout the country grown annually at a rate of 10%,
with the average mine producing in few mines of any size had been
the region of 16 koz/y. built, and most still contributed only
This could almost be a description 10 koz/y.
of Zimbabwe’s gold mining industry! The government then decided
to change its approach and
Since 1998, the Chinese gold
industry has undergone two phases moved funding away from direct
of major restructuring aimed at investment in gold mining, deeming
creating a much more liberalised it ‘unproductive’, to concentrate
industry, with the central thrust a more on infrastructure construction
 WO R L D G O L D A N A L Y S T Z I M B A BWE 43

import its power deficit”, it observes.The prognosis
does not seem to be any better according to the
company. “Given the lack of available government
funding for investment in major infrastructure
projects together with the uncertain political
environment, it is probable that, for the foreseeable
future, the power supply will continue to be
unreliable and unpredictable”, it concludes.
The government is acutely aware of the problem.
Addressing the Chamber of Mines AGM in May
this year, President Mugabe stated that it hopes
to attract investment into new power generating
facilities6. “I wish to inform this meeting that
several power projects requiring new investors
are pending, including the Hwange Power Stations
7 and 8, Kariba and Batoka”, he affirmed, going
on to say that “...Government will institute the
necessary energy sector reforms required for
attracting new investment in that sector”.
In the meantime, the gold producers have, or are,
implementing contingency plans by installing their
own power generating facilities to counteract
the load shedding and outages that have blighted
operations. It is more expensive but at least they
can guarantee the mine and plant can operate to
increase operations up to installed capacity.
Power to the people – Indigenisation
The subject of indigenisation is one of the most
divisive issues that government and the mining
industry have to resolve for the greater good
of the country’s economy. Clarity on what the
government’s intentions are is needed urgently
to remove the uncertainty that hangs over the
mining industry and deters foreign investment.
Incidentally, indigenisation was another
high negative scorer in the Fraser Institute
report mentioned earlier, with 60% voting
against investment because of the uncertainty
surrounding the issue.
The Indigenization and Economic Empowerment
Act 14, 2007 was signed into law in April 2008
and provided for all companies operating
in Zimbabwe, with a value greater than
US$0.5 million, to arrange for 51% of their
shares or interests therein, to be owned by
indigenous Zimbabweans.
Over two years later the industry is still waiting
to see exactly what the 51% requirement means,
although it is understood that the government is
not pressing for a simple transfer of ownership
to Zimbabweans. Rather the process is likely to
involve a series of credits against the 51% as an
acknowledgement of giving certain concessions
in social and welfare areas.
In January this year, the Zimbabwe Government
published regulations with respect to the
Act that included the requirement for
companies operating in Zimbabwe to provide

throughout the country. It also
opened up the industry and
invited foreigners to participate
with the anticipation that foreign
investment would immediately
replace state funding.
However, it was only later, with
economic reform (China became
a member of the World Trade
Organisation in 2001) and a
greater openness to foreign
investment, with foreigners
permitted to own gold deposits
in 2002, that Australian and
North American companies felt
comfortable enough to seriously
begin investigating the recognised
gold potential of this vast country.
Local organisations, meanwhile,
now starved of central
government funding, were
amenable to courtship by the
foreigners and hence there was
a willingness on each side to
do business.
So there was something of a
flood into the country based
on its geological prospectivity. In
GFMS World Gold’s 2005 Special
Report on China, we catalogued
the activities of almost sixty
foreign gold companies engaged in
over one hundred projects.
However, since that time, the
flood has dwindled to a trickle
and, in fact, has reversed as
companies have exited after
having been frustrated by
bureaucratic impediments and
uncertainty of licence tenure. So
China provides an object lesson
in what to do right but with
warnings on how to sustain this
inward investment. The Chinese,
however, are now self-reliant and
have become the world’s largest
minerals investor, so they are
hardly concerned with the lack of
foreign investment. They generate
enough funding through their
domestic economy.
Zimbabwe will never be in that
position so will always need a flow
of foreign capital into its mining
and industrial sectors.
44 WO R L D G O L D A N A L Y S T Z I M B A BWE
specified information to the Minister of Youth
Development, Indigenization and Empowerment,
including an indigenisation implementation
plan, by April 15. The government planned to
use this information as a basis for determining
what amount less than 51% would apply to any
sector or subsector and the maximum period for
achieving indigenisation. The regulations require
the Minister to complete the determinations by
the end of February 2011.
The Chamber of Mines of Zimbabwe is actively
consulting with the relevant government
authorities to convey its members’ views on
this matter and to work towards finalising the
indigenisation and empowerment metrics for the
mining industry.
At the Chamber of Mines AGM in May this year,
Chamber President,Victor Gapare, expressed
the industry’s broad support for the sentiments
expressed in the Act and outlined the industry’s
recommendations on how empowerment could
be achieved.
Broadly, as presented by Mr Gapare, these include
the following:
• Equity of at least 15% as a minimum, which
means it is possible to have even up to 100%
equity being locally owned. Ministers have
confirmed that companies could use listing on
the ZSE as a way of achieving indigenisation.
• Credits in equity equivalents which include
local procurement, CSI, support to the small
scale mining sector, skills development, starting
new businesses and any other socially and
economically desirable activities.
At the same COM AGM in May, President Mugabe
confirmed that a system of credits would form the
basis of compliance with the Act. He stated in his
speech to the assembled members of the mining
industry that, “Government has also accepted the
principle of empowerment credits as an integral
component of the 51% and this is detailed in
Section 5(4)(c) of the (Indigenization and Economic
Empowerment) regulations.”, although clearly
whether “integral component” means the 36% that
the Chamber is seeking remains open for debate.
But the principle is acceptable to all concerned
and there now needs to be some horse trading
to set the level of equity participation.
Listing on the Zimbabwe Stock Exchange has
generally been accepted as a form of compliance
and some companies’ proposals have already been
accepted on the basis of a public listing in 3 to 5
years. The COM also believes that mineral rights
in Zimbabwe (of which over 50% are already held
in local hands and state controlled organisations,
according to the COM) should form the basis of
an empowerment programme. “Owners of mineral
rights should use these rights as their contribution
in joint ventures with foreign investors who
should bring capital to develop the mineral rights.
I would urge those holding such mineral rights to
be creative and start engaging international capital
to achieve development of the mineral rights”, Mr
Gapare told this May’s AGM.
Security of tenure – nationalisation/
expropriation
If indigenisation possibility represents a form of
creeping nationalisation, overt nationalisation still
hovers as a perceived threat to many looking
at the country and the administration from
London, New York, Toronto, Johannesburg or
Sydney. The fear is generated by the government
sponsored actions of the early part of the decade
that saw expropriation of land owned by white
farmers, and particularly the acts of violence that
accompanied the re-distribution moves.
Such fears may be unfounded, however, as
President Mugabe has publically denied that
nationalisation is on the agenda. At the COM
AGM, he addressed the subject head on.
“Government has no intention of expropriating
the mining industry”, he stated. He went on to
stress the government’s record on this issue. “No
mine has been nationalized since independence”,
he stated and continued with an explanation
of the government’s goal for the nation to own
natural resources in circumstances in which
they could share with other friendly countries
as equitable partners. “This sense of direction,
of seeking to correct historical wrongs, has
persuaded Government to explore the path
of profitable partnerships and joint venture
initiatives with foreign investors in the mining
sector”, he confirmed.
The ongoing dispute over the ownership of
diamonds found and mined in the Marange area,
with government-owned mining companies
seemingly disregarding the Supreme Court’s
instructions to stop mining and selling the
diamonds until ownership has been determined,
 WO R L D
has made international headlines. There
is apparently a hoard of diamonds worth
US$1.7-1.8 billion at play here so the stakes are
high for a cash-strapped government.
The saga of the Marange diamonds, the Kimberley
Process and explorer African Consolidated
Resources is described in the box (overleaf).
Infrastructure
The question of appropriate level of
infrastructure to support mining is an important
one that would-be explorers and miners place
high on their list of desirables when considering
investing in a particular country.
We have discussed the power situation earlier in
this chapter and it remains a very real concern
for mining companies.
Elsewhere, the country is well served with over
90,000 km of roads. Main roads seem to be well
maintained (there is a toll on many roads now
to pay for upkeep) although some of the more
rural roads need substantial upgrading. When I
travelled to minesites, some of the metalled and
dirt roads were in poor condition, but at least
there are road connections.
The rail network needs an upgrade with ageing
equipment hampering operations. Some 415 km
of track is operating under cautions/speed
restrictions.
As with most African countries, water is always
a concern and droughts have often disrupted
power supplies.
Skills
Lack of appropriate skills at all levels of the
industry is of great concern to mining management
and a very real limiting factor on growth. Many
Zimbabwean professional geologists and mining
engineers have long since left the country to
undertake careers in other mining friendly countries
such as South Africa, Australia and Canada.
Also, it is reported that something like 3 million
people have left the country in recent years, with
many across the border in South Africa.
The COM sums it up thus, “The industry has lost
a lot of skills in the last decade. The skills base
which had been developed in this country since
1980 were second to none and today, if you go
anywhere in the world, Zimbabweans are running
major undertakings. This is good in a way as
G O L D A N A L Y S T Z I M B A BWE 45
these migrants are gaining valuable experience.
However, we need to make plans to get these
Zimbabweans back as our economy takes off”.
The COM is a major sponsor of the School
of Mines and as part of the indigenisation and
empowerment programme; mining companies
have undertaken to make skills development a
major priority.
6.4 SWOT analysis
Strengths
• World class greenstone belts
Zimbabwe has a proven gold producing record
and there may be deposits of greater size than
those already exploited.
• Evidence of extensive, generally unexploited
sulphide resources
Sulphide potential needs to be quantified as little
structured exploration work has been undertaken
thus far throughout the long history of the
industry. If delineated, sulphides offer not only large
deposit potential but also open pit mining potential
which could increase production dramatically.
•  Long mining heritage and culture
An understanding of mining, it’s importance
plus the skills needed to develop the
industry (although they might not all be in
Zimbabwe currently)
Weaknesses
•  Perceived security risks
Perception probably doesn’t represent the
situation on the ground within the country now
but perceptions count. Investors need reassurance
from a government tough on law and order
•  Lack of consolidation, too many small mines
Sub-optimal working of deposits. Opportunity,
though, for aggressive companies to lead the
consolidation process.
•  Extensive private ownership
Aggravates the small-mine syndrome. Little capital
to expand and little chance to obtain capital as no
market to tap into
•  Undercapitalised
Again, lacking money to build more logically-
sized mines
46 WO R L D G O L D A N A L Y S T Z I M B A BWE

•  Power supply problems
Limiting normal operating and constraining
expansion. Mines are installing their own
generators but this is costly.
Opportunities
•  Evidence of near-surface sulphides
Possibility of developing large open pits to exploit
sulphides. Lower cost, more productive than
underground mining.
•  Use of modern exploration techniques
Huge amount of ground in Zimbabwe’s
greenstone belts has not been explored using
modern methods. Opportunity to discover
more goldfields.
•  Consolidate claim areas
Opportunities to consider more regional scale
exploration and exploitation, which could lead to
more optimally-sized mines.
• Political pressure from SADC and South Africa,
in particular.
South Africa’s President Zuma, in particular,
must play a major role in conciliating between
the two parties in the GNU and also in keeping
pressure on the government to move forward
on elections.
Threats
• Failure to install new constitution and hold
democratic and free elections.
It is critical that the GNU continues to move the
process of rewriting the constitution forward
and keeps momentum towards elections. Already
the timetable has slipped and elections look like
being delayed, perhaps until 2012 or even, as this
Professor Gaidzanwa suggests in this report, to
2014. The country is desperate for foreign capital
and the mining industry needs to attract investors
and this will not happen at the scale required
until there is a stable, democratic government.

Diamond’s are a...
government’s best friend
The Kimberley Process
& ACR
In August, the Zimbabwean
government sold 900 kct of
certified diamonds, out of a
stockpile believed to be as large
as 4.5 Mct, raising US$72 million
in the process, according to Mines
Minister, Obert Mpofu. That’s one
part of the story, the other being
that a London-listed minerals
exploration company is in dispute
with the government over
ownership of those diamonds.
The first part of the story is
interesting in that it shows that
the Zimbabwean authorities can
work with a world monitoring
body, but the second part is
perhaps more absorbing for
would be mineral investors as
there may be clues as to how the
government will act on mineral
rights in the future.
The diamonds that were sold
were from the Marange-Chiadzwa
kimberlite field. Sales had been
suspended last November by
the influential Kimberley Process
Certification Scheme (KP), which is
a body set up in 2003 by the United
Nations to certify the source of
rough diamonds with powers to
sanction trade of any diamonds
they believe are so-called ‘blood
diamonds’. After a monitoring
mission, the KP officials alleged
that they had found instances of
non-compliance and human rights
violations when government cleared
illegal miners (Reuters report up to
30,000) from the site of the mines.
This dispute was resolved in July at
the World Diamond Council’s 7th
annual meeting in St. Petersburg,
when the KP reached consensus on
an agreement to enable the renewal
of rough diamond exports from the
Marange fields. Wasting no time the
government took the first diamonds
to auction in August. Although
the process went off smoothly,
the influential US-based Rapaport
Diamond Trading Network said it
will not allow its members to trade
in them.
Meanwhile, the wrangle over
ownership of these diamonds
continues. The two protagonists are
the government and explorer African
Consolidated Resources (AGR).
The diamonds fields at Marange
were discovered by ACR in 2006,
after it picked up claims originally
held by De Beers as its EPO
expired that year. The government
has revoked any claims the London
company has and gone ahead with
mining operations and the recent
auction sales of mined diamonds
seemingly in direct opposition to
High and Supreme Court rulings.
When ACR listed in London in
2006, its admission document
listed three groups of claims in the
Mutare region of eastern Zimbabwe
held by three 100% subsidiaries of
ACR. The company simply stated
that it had acquired ground in the
eastern part of Zimbabwe where
 WO R L D G O L D A N A L Y S T Z I M B A BWE 47

•  Political unrest and turmoil
Clearly this will deter investors.
•  Low economic growth
Dollarisation’ has lowered inflation and stabilised
the economy to a degree. Forecast GDP growth
for this year is 5%, which is better than many
developed countries, but the finance minister
is still having problems funding the current
account. In addition, the country has a serious
debt problem. Without foreign financing packages
the minister will not be able to fund any capital
infrastructure projects which the country
badly needs.
• Worldwide recession and economic crisis.
If major western economies fail to grow or if
they fail to lower their high debt levels then they
may not be able to assist Zimbabwe whatever the
political state of the country.
•  Gold price weakness
Costs are relatively high in the low grade,
underground mines especially when they are
not working at full capacity owing to the power
problems. Significant and sustained gold price
weakness to U$850/oz would threaten any
recovery of the gold mining industry.
•  New mining legislation
The government is in the process of amending
the Mining Act and is making noises that the
mining industry does not contribute enough to
the fiscus. The Minister of Finance has already
removed the mining companies’ favourable tax
regime (corporate tax has been increased from
15% to 25%) and imposed a royalty of 4% of
revenue. A more punitive tax regime will further
deter investors. Allied to this is the indigenisation
legislation issue, which is still surrounded by
uncertainty. The industry fully accepts the
principle of empowerment and favours the model
whereby equity is put into indigenous hands to
the level of 15% with credits on socially desirable

previous exploration identified
kimberlite indicator minerals and
was re-sampling the area.
Within three months, in
September 2006, it made the
simple announcement of “a
diamond find in Zimbabwe”,
without giving any details.
But by November 2006, not only
had the company had to deal
with the influx of illegal miners
but it also announced that there
was disagreement between
the company and the Mining
Commissioner’s office over the
validation of ACR’s claims.
In a press release in December
that year, the company advised
that the Ministry of Mines had
invoked a clause in the Zimbabwe
Mines and Minerals Act and
intended to cancel registration
of the company’s title to the
Marange diamond deposit on
the grounds that title should not
have been granted in the first
instance because of a pre-existing
exploration licence over the
same area.
The situation remained
unresolved until September 2009
when the High Court upheld
ACR’s title. The government
appealed to the Supreme Court,
which issued a Judgment on 16
February 2010, which ordered
that all diamonds acquired from
the Marange Claims Area be
surrendered to the Reserve Bank
of Zimbabwe, and that all mining
activities on the Marange Claims
Area cease until determination
of the appeal against the 25
September Judgement in the
Supreme Court.
ACR has stated that only the
diamonds mentioned in the
25 September Judgement were
lodged with RBZ, whereas ACR
understands that diamonds are still
being mined, which are continually
stockpiled by the companies
mining upon the Marange Claims
Area (Mbada and Canadile) are
retained by those companies.
ACR has suggested a holding
agreement until the Supreme
Court ruling has been made on
ownership, which it claims the
government has ignored. The
company thus sought an urgent
injunction through the High Court
to stop sales of any diamonds
held by Mbada and Canadile and
that the stockpile be deposited
with the RBZ as per the Supreme
Court ruling. The High Court
dismissed the application on the
basis that the matter was not
urgent, and ACR is now obliged
to re-lodge the application
as a normal (i.e. non-urgent)
application in the High Court,
which ACR has now done.
The issue here is one of security
of tenure that international gold
companies will no doubt, be
following with avid interest as it
may be a better measure of the
government’s true intentions
with valuable minerals than their
rhetorical statements in speeches
at mining conferences.
48 WO R L D G O L D A N A L Y S T Z I M B A BWE

activities making up the remainder to 51%.

Investors will be loath to put money into the
industry if they are then going to lose control of
any mining companies.
References
(1) “Mining Sector: Engine for Economic Growth”, Douglas Munatsi, Group
Chief Executive Officer, BancABC, 6th Annual International Mining in Africa
Conference, June 2009
(2) “Zimbabwe’s Gold Potential” by Forbes Mugumbate, Fadzanayi Bornwell Mupaya
and George Tendai Kwenda of the Zimbabwe Geological Survey, article in Mining
Review Africa, Issue 5, 2005
(3) GFMS Gold Survey 2010
(4) “Survey of Mining Companies 2009/2010” by Fred McMahon and Miguel Angel
Cervantes, published by The Fraser Institute, April 2010.
(5) The 2010 Mid-Year Fiscal Policy Review, Ministry of Finance, July 2010
(6) ACR AIM listing document, 2006.
 WO R L D G O L D A N A L Y S T Z I M B A BWE 49

Chapter 7 –
Gold Production Review
7.1 Historic gold production in Zimbabwe
Our parent company, GFMS Ltd, has been collating and publishing annual data on global
gold supply patterns in its Gold Surveys since the mid-1970s, when it was an internal
department within Consolidated Gold Fields, so its proprietary records have given us a
great source of statistics to chart the rise and fall of Zimbabwe’s gold mining industry.

In 1975, despite being in the middle of a civil

war, the country (then known as Rhodesia)
was ranked the fifth largest gold producer in the
world, with production of 18.6 t, behind the USA
but, significantly, ahead of Australia.
By 1980, the year that Zimbabwe gained its
independence and the gold price peaked at a
record US$850/oz, production had slumped to just
11.4 t, but the new Renco mine was on the horizon.
GFMS’s predecessor stated in its Gold Survey at the
time that the country’s industry was facing “rising
cost, restrictions on foreign currency allocations,
and increased taxation of the mining industry”.
Despite these threats, by 1990, Zimbabwean
gold production had increased by almost 50%, to
17.0 t, with an increase in exploration also noted
in GFMS’s Gold 1991. The advent of good rains
in 1995, breaking the drought which had led to
power shortages, which hampered mining, saw gold
production increase to 26.1 t, the highest level for
50 years. The improved trend continued for the
rest of the decade until in 1999, GFMS’s analysis
showed that the Zimbabwean gold mining industry
produced 29.7 t (955 koz) of gold, a record which
made the country the 16th largest gold producing
nation in the world.
economy and which saw the currency weaken
sharply, resulting in a higher domestic price and
lower costs.This provided some breathing space
for an industry where many of the numerous small
operations were on the brink of closure under
pressure from spiralling costs of essentials such as
power and water. However, the crisis in the country
continues to deepen and, the outlook for the gold
mining industry – as for the rest of the economy –
is bleak, with a crippling fuel shortage exacerbating
the effects of 55% inflation, an overvalued currency
and increasing political instability”.
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005

However, the growth was not sustained in the 2006

new millennium and by 2008, output had slumped 2007
to just 3.5 t, which represented the lowest level 2008
for 90 years. It picked up marginally in 2009 to
2009
4.9 t as mines restarted their operations.
2010 (f)
Ironically, in the year that gold production peaked,
0 200 400 600 800 1000
1999, GFMS already notice that there were signs
Gold production koz
of an imminent crisis.The Gold Survey of 2000
commented, “...this growth (to 29.7 t) was achieved Figure 7.1: Annual gold production for Zimbabwe
partly as a result of the crisis which gripped the Source: GFMS & COMZ
50 WO R L D G O L D A N A L Y S T Z I M B A BWE

As mentioned earlier, Zimbabwe’s gold output Custom millers 9% 6% 11% 14% 17%
slumped in 2008, as the catastrophic economic + 1kg
situation and the Reserve Bank’s inability to pay Other producers 1% 2% 3% 1% 2%
for gold production gave owners little option but Ngezi + Mimosa 5% 9% 13% 16% 13%
to close operations for most of the fourth quarter. Total Gold 100% 100% 100% 100% 100%
Output recovered slightly in 2009 to 4.9 t. Production
This year, with mines sure of US$ receipts for their Koz 365 226 112 160 105
gold, production at most mines has ramped up but Source: complied from COMZ data

is still constrained now by the lamentably poor

power supply situation and insufficient working and 100
investment capital that means that with first half
production reported at just over 4.0 t, the industry 80
is probably working at only 40% of capacity.
The Chamber of Mines predicted that gold output 60
for 2010 would be 7 t but it looks as though that %
estimate may be exceeded, which is an encouraging 40
turnaround from the debacle of the last two years,
but still some way short of potential represented 20
by an installed capacity of 20 t.
0
7.2 Review of the main gold companies 2006 2007 2008 2009 2010
large small custom others by-product
This section reviews the status of the operations
and projects of the gold producers belonging Figure 7.2: Split of production on a percentage basis
to the Chamber of Mines, who are listed in
alphabetical order in the following table.
From Table 7.2 and Figure 7.2 we can make the
The top ten gold producers in the country in following observations:
2009 are shown in the table below:
• The deteriorating trend in output is clear. The
Table 7.1 : Top ten gold producers in 2009
shutdown of the main producers’ mines in late
2008 had a devastating effect on the country’s
Company Gold (koz)
production profile.
RioZim 24
Metallon Gold Zimbabwe 18
• The larger producers have been hardest hit over
the past few years by the financial and power
Caledonia Holdings Zimbabwe 10
problems. Collectively their proportion has has
Forbes & Thompson 10
fallen from 80% to 67%.
Casmyn 10
DTZ – OZGEO 7 • The custom millers represent an important
segment in the Zimbabwean production picture.
Pan African Mining 6
Their output has fallen since 2006, but based on
Sabi Consolidated 5
the first half of 2010 results, it could rise again
Calcite 4 this year. On a percentage basis, their influence
Ashanti 3 has increased over the years.
Source: COMZ
• Small miners now represent a small fraction of
the industry’s output.
Table 7.2 5-year production split
2006 2007 2008 2009 2010 • By-product gold from the platinum producers is
(H1) a significant segment of output and presumably
Total Large 80% 81% 72% 68% 67% will grow as the mines expand.
Producers
Total Small 5% 3% 0% 1% 1%
Producers + 1kg
 WO R L D G O L D A N A L Y S T Z I M B A BWE 51

Caledonia Mining Corp (TSX:CAL, AIM: CMCL)

Caledonia Mining is an African-focused mining and exploration
company, which owns the Blanket gold mine, in Zimbabwe; two
platinum-nickel exploration projects, in South Africa, and a cobalt-
copper exploration project, in Zambia.
The Blanket mine is located along strike from Duration Gold’s Lease
16 property, 150 km from Bulawayo and 16 km from town of Gwanda,
in Matabeleland South.
Caledonia Mining acquired the mine from Kinross Gold In 2006. Under
the former ownership the mine had produced up to 24 koz/y.
Blanket expansion
The company stopped production in late 2008 and then restarted
the mine in April 2009 with a production target of 40 koz/y by the
end of the year. However, although gold output reached over 1,800
oz in October 2009 the mine was unable to reach target because of
exhaustion of reserves above 14 Level and handling constraints on
the extraction of deeper ores, which were compounded by electricity
outages. Production has therefore only ranged between 1,200 and
1,500 oz/mth since recommencement.
The key to achieving the production target is the completion of the
US$3 million, 4-shaft expansion project, which is now expected to
be commissioned in September 2010, some two years later than
originally planned.
The 4-shaft project entails the installation of a new crushing and
loading facility below 22 Level (750 m) to replace the current mid-shaft
loading boxes on 14 Level (510 m) and thus open the reserves that lie
below 14 Level. The project will also see an increase in the secondary
crushing and milling facilities on surface, from 600 t/d to 1,000 t/d.
Table 7.3: Blanket production history
H1 2010 2009 2008 2007
Tonnes milled (kt) 58 103 82 100
Grade (g/t) 3.85 3.66 3.33 3.58
Gold (koz) 6.5 11.0 8.4 14.0

According to Caledonia management, the mine is currently producing

at a rate of 1,300 oz/mth and ramp up will commence in September to
achieve 3,300 oz/mth (40 koz/y) by the end of the year. The mill circuit
comprises gravity concentration plus CIL, with a capacity of 3.8 kt/d.
The installation of a 2.5 MVA diesel generator in June enabled the
company to press on with the 4-shaft work without delays because
of the power outages. The existing genset will also greatly aid steady
state production going forward by avoiding interruptions to mining
operations due to lack of power from the state grid. The company
estimates that it will need another two standby generators in order
to maintain the 40 koz/y rate. Power security does not come cheap,
however. Overall power operating costs are five times higher than for
ZESA grid power.
52 WO R L D G O L D A N A L Y S T Z I M B A BWE

No 4 shaft at Caledonia’s Blanket mine is nearing completion of an expansion project

The delay with the 4-shaft project was caused by lack of funds due to
the failure of the RBZ to pay for gold production in 2008 and 2009,
compounded by the subsequent failure of the RBZ to redeem Gold
Bonds, which matured in February 2010 with a redemption value of
US$3.16 million. The company secured US$2.5 million loan in May this
year to pay for this and the genset (see later).
Geology and reserves
Blanket is situated in a typical greenstone terrain; the 70 km long
by 15 km wide Gwanda Greenstone belt. The Blanket property is
the largest of the three remaining large gold producers, from a gold
resource area that has given rise to no less than 268 gold mines.
Blanket is part of the group that makes up the North Western
Mining camp extending from Sabiwa and Jethro in the south, through
Blanket itself to the Feudal, AR South, AR Main, Sheet, Eroica and Lima
ore bodies.
The geological sequence strikes north-south, dips vertically and consists,
from east to west, of a basal felsic unit (which is not known to carry
mineralisation), a higher ultramafic unit that includes a banded iron
formation (which hosts the eastern dormant cluster of mines and the ore
bodies of the adjacent Vubachikwe mine complex belonging to Duration
Gold), and finally the mafics that host the active Blanket ore bodies and an
andesitic unit, which lies to the west, caps this whole stratigraphy.
Ore bodies at Blanket are epigenetic and are associated with a later,
regionally developed deformation zone characterised by areas of high
strain, wrapping around relatively undeformed remnants of the original
basaltic lava flows. It is within the higher strain regime (highly sheared
rocks) that the wider of the orebodies are located.
 WO R L D G O L D A N A L Y S T Z I M B A BWE 53

The company has not updated its ore reserve statement since that
published and certified in terms of NI 43-101 at December 31, 2008.
Reserves amounted to 3.8 Mt at grade of 3.81 g/t for contained gold
of 465 koz. Additional Indicated resources were just 67 koz of gold
contained, although Inferred resources were estimated at 418 koz of
gold contained at the higher grade of 5.19 g/t.
Exploration
Elsewhere on the property, the company is investigating expansion and
extension opportunities within the existing orebody through its Lima
project. It is extending the 22 Level haulage from 4-shaft through to
the Eroica and Lima and orebodies to allow for underground resource
drilling down to 1,100 m. In a second phase, it intends to extend either
the Lima shaft or sink a new shaft at AR Main to 1,300 m in depth to
increase production capacity.
Outside of the mining lease, the company holds forty seven precious
metal claims covering 415 ha in the Gwanda greenstone belt. Blanket’s
main exploration efforts are focused on the potential for finding
satellite orebodies in the Blanket vicinity. After completion of the
4-shaft project, there will be 500 t/d of surplus milling capacity and
2,800 t/d of surplus CIL capacity that needs to be filled.
The main targets are at GG and Mascot/Penzance. GG lies
approximately 7 km from Blanket and the company has started
sinking a 140 m exploration shaft. The company plans to undertake
development at the 120 m level by the end of the year to gather data
for an in-house scoping study.
At Mascot/Penzance, located approximately 40 km from Blanket, the
company plans to refurbish the existing shaft and headgear before
following up on drilling results from over a decade ago.
Carslone Enterprises
Carslone is a subsidiary of the Reserve Bank of Zimbabwe which
owns the Globe & Phoenix, now obsolete, but it was once the second
largest historical gold producer in Zimbabwe with an output of almost
4.0 Moz at an average grade of 27.6 g/t. Carslone also owns the
Golden Kopje mine.
Casmyn Mining
Casmyn Mining is the wholly-owned, Zimbabwean subsidiary of
Canadian-domiciled, New Dawn Mining Corp. See New Dawn Mining
for more details of gold production activities.
Duration Gold
Duration Gold Ltd, a private company based in Jersey, Channel Islands
was formed in 2006, and holds an extensive portfolio of gold mines
and advanced stage projects in Zimbabwe. Duration Gold is wholly-
owned by the Jersey-based Clarity Capital Group.
Group gold mines
The company owns 112 gold deposits and prospects, which have now
been consolidated to enable the construction of four medium- large
54 WO R L D G O L D A N A L Y S T Z I M B A BWE

scale modern mines at (ML16, Athens, Gaika and Royal Family ),

which historically produced a combined total of 5.2 Moz.
The current producing mines are located at ML16 (Vubachikwe), Athens,
Queens, and Gaika , which are located in Matabeleland and the Midlands.
The company’s mines currently produce almost 20 koz/y, but the
company is targeting an increase in total production to 60 koz/y by the
end of 2012, followed by an expansion to in excess of 120 koz/y over
the next two years, contingent upon securing the required financing.
Duration’s objective is to develop its existing global historical resource
base of 4.2 Moz of gold into a 300 koz/y producer based on four bankable
feasibility studies on its core projects targeted for completion by 2015.
Location of Duration Gold’s projects

Expansion at Vubachikwe
Duration’s principal mine is Vubachikwe, located near the town of
Gwanda, some 180 km south east of Bulawayo, which currently
accounts for almost 60% of the group gold output.
The mine was originally operated by Lonrho before being acquired
by a family firm (the Thompsons) in 1955, who ran it until 2006 when
 WO R L D G O L D A N A L Y S T Z I M B A BWE 55

Duration came in as partner. The mine, one of the many on Duration’s

Lease 16, is situated on a 60 km-long mineralised strike that also
includes the Blanket mine, now owned by Caledonia Mining.
The Vubachikwe mine is currently working parallel Hangingwall and
Footwall reefs between 30 and 35 Levels (down to 1,200 m) with
grades of 5-6 g/t. Despite the depth, underground conditions are good
– the mine is warm, dry, and the rock is very competent and needs
little support. Development is in progress down to 40 Level from
where the company will undertake resource drilling down to 44 Level.
The deposit at Vubachikwe is part of the Thuli syncline, the north
limb of a massive regional shear zone. The geological setting is classic
greenstone with mineralisation associated with ultramafics and
banded iron formation (BIF). Gold is generally fine grained and may be
associated with arsenopyrite. The neighbouring Blanket orebodies are
hosted in a mafic unit that sits on top of the ultramafics.
The Vubachikwe processing plant, which includes a flotation circuit,
currently has a capacity of 12 kt/mth but a new 30 kt/mth CIL plant
is under construction and is expected to reach full capacity within
twelve months.
After the industry-wide 2008 production hiatus, mining recommenced
in February 2009 and the mine is currently producing at about

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56 WO R L D G O L D A N A L Y S T Z I M B A BWE

30 kg/mth (15 koz/mth), which is around 60% of capacity as a result

of the limited availability of power from ZESA. Cash costs are running
at US$700/oz but the target is US$500/oz. The company is about to
install a new generator to remedy the power problem.
Exploration within Lease 16
Along the 8 km strike length within Lease 16, there are a number of
other past-producing mines, which the company is investigating with a
view to recommencing and expanding operations.
At the Black Cat prospect, the company is currently developing
through from Vubachikwe along 6 Level and drilling with two rigs to
determine the extent of the orebody and assist with modelling the
oxide, open pit potential.
At Magano, there is currently limited production from shallow
underground workings beneath an open pit with underground
development down to 6 Level and underground drilling in process. The
company plans to conduct a surface drilling programme to further test
strike and depth extensions.
Further south, in the Central area a number of mines have been
consolidated and are accessed via a vertical shaft which is being
brought back into production. Further south again, the Bar 20 has been
developed down to 6 Level and prospects between Central and Bar
20 include Champion and Turquoise. Bar 20 ore was originally treated
as being refractory and concentrates were sent to be roasted in

Main shaft at Vubachikwe (Photo: Paul Burton)

 WO R L D G O L D A N A L Y S T Z I M B A BWE 57

Kwekwe by previous owners, but the company now believes that not
all ore accessed from Bar 20 Shaft is refractory.
The company is also looking at options to process the 1.2 Mt
refractory concentrate dump, with ultra fine grinding or BIOX
technologies being considered. A feasibility and optimisation study is
currently underway on this.
Other operations
Outside of Lease 16, Duration has resumed operations at the Athens
mine and commenced a resource drilling programme in 2009.
In addition, the company has resumed operations at the Umviga
properties with development ore currently being trucked to Queens
mill for gold extraction. Pending completion of a final study, the
company will look to refurbish the Umviga plant for the treatment of
tailings and sand dumps.
At the Gaika mine (KweKwe) where a small vat leach programme
is currently being run, the company is planning to start an open pit
operation (20 kt to 30 kt/mth) in 2013 with the view to producing
around 24 koz/y.
On the exploration front, Duration is undertaking resource drilling at
Athens, Gaika,Vubachikwe, and Royal Family, while commencing scout
drilling at the Auric, Carry, Tuff Nut, Kernel and Tiberius mines, all in
the Bulawayo area.

Part of the old plant at Vubachikwe with the new CIL plant in the foreground (Photo: Paul Burton)
58 WO R L D G O L D A N A L Y S T Z I M B A BWE

Earlier this year, Clarity Capital agreed a strategic alliance with South
African engineering group, E+PC Engineering & Projects Co Ltd, with
the aim of developing the Vubachikwe high grade, refractory tails re-
processing project; the initiation of bankable feasibility studies for the
expansion of the Vubachikwe mine and the development of the Athens
and Gaika mines.
Clarity Capital companies’ also work closely with the Cotton Tree
Foundation. The Foundation is committed to progressing education,
training and entrepreneurship in rural communities. The communities
surrounding Duration’s mines are currently the key focus. Such
initiatives should stand the company in good stead with regard to
indigenisation legislation that is being interpreted at present.
In September last year, the Duration raised US$8.0 million through a
private placement to fund the resource drilling programme across the
group and the Vubachikwe mine processing plant expansion.
The company is looking to raise additional financing in Q3/Q4 through
another private placing.
FA Stewart and Son
Jessie mine near Blanket and Vubachikwe
Falcon Gold
Falcon Gold is listed on the Zimbabwe Stock Exchange. After its mid-
year takeover of Central African Gold, New Dawn Mining now owns
85% of Falcon Gold and its three mines at Dalny,Venice & Golden
Quarry. See New Dawn Mining for details of these operations.
Freda Rebecca Mine
The Freda Rebecca mine is owned by Mwana Africa plc. See Mwana
Africa entry for details of the mine.
GAT Investments
GAT Investments, a private Zimbabwean company, owns a number of
gold mining operations and projects in Zimbabwe through local private
entity, Bilboes Holdings (Private) Ltd.
Its main claim blocks are located in Matabeleland province, 80 km
due north of Bulawayo. These properties were formerly owned by
Anglo American Zimbabwe and the company acquired them through a
management buyout in 2003.
The company’s short term business plan revolves around dump and
oxide material treatment but the longer term future is dependent on
the successful delineation and exploitation of sulphide mineralisation at
these former Anglo American properties.
Oxide production at Isabella group mines
The Isabella EPO hosts three operating mines at Isabella, McCays and
When grouped together, with Bubi (on the Gwizaan EPO) some 32 km
away. These shallow (less than 30 m deep) open pit/ heap leach mines
have produced some 230 koz of gold since start up by Anglo American
in 1989 but only 40 koz of gold since the 2003 acquisition.
Each mine has heap leach facilities although Isabella is the site of the
 WO R L D G O L D A N A L Y S T Z I M B A BWE 59

Flooded pit at McCays (Photo: Paul Burton)

single elution and smelting plant. Isabella has an installed crushing plant
with a capacity to treat 100 kt/mth of ore. Future production will be
based on an installed crushing plant capacity of 80 kt/mth at McCays,
When 15 kt/mth and Bubi 80 kt/mth. The mines are connected to
the national electricity grid via 300 kVA transformers with a 150 kVA
backup generator at Isabella.
Production for seven months in 2009 amounted to approx 4 koz, well
below rated capacity, at a cash cost of US$689/oz.
The short term production target at the Isabella plant is 6 koz/y from
old heap leach dumps and some open pit oxide ore, with a longer
term forecast of approx 15 koz/y from oxides.
Current oxide reserves amount to 104 koz of gold contained at an
average grade of 0.67 g/t. Measured and Indicated resources are 79 koz
at a grade of 0.50 g/t.
In order to reach planned output the company is looking to spend
US$5 million on the oxide facilities.
Although the continuing processing of oxide material should enable
Bilboes to generate cashflow over the next few years, the longer
term future of the operations in Matabeleland lies with the deeper
sulphide resources.
The sulphide project
The Isabella EPO is underlain by felsic and mafic schists and
greywackes of the Upper and Lower Bulawayan volcanic units that
form part of the Archaean Bubi greenstone belt. Mineralisation is
truncated by fault splays.
60 WO R L D G O L D A N A L Y S T Z I M B A BWE

The existing plant at Isabella, which Bilboes will utilise for oxide and dump material processing initially (Photo: Paul Burton)

The Isabella mine mineralisation is hosted in a banded iron formation unit

and is located within a broad shear zone cutting through felsic schists close
to the contact between the Bulawayan and Shamvaian units. Sulphides
throughout are predominantly pyrite and arsenopyrite and are refractory.
A December 2009, independent technical report by SRK Consulting
confirmed significant sulphide resources drilled out on the Isabella,
McCays and Bubi claims and also suggested considerable potential to
upgrade these resources and delineate additional resources.
End-2009 Inferred resources, based on a 2 g/t cut-off, were 4.7 Mt at
a grade of 3.49 g/t for 533 koz of gold contained down to a depth of
100 m. Beneath this, SRK identified an additional 3.5 Mt of ‘unclassified’
material at a grade of 2.11 g/t for 240 koz of gold contained.
Following its study of the data, SRK concluded that there is “...potential
to increase this (533 koz of Inferred) by 4 Moz through strike and
depth extensions of the known open ended mineralisation.”
Accordingly, the company is planning to invest US$7.2 million over the
next two years to explore systematically the sulphide potential and
complete a bankable feasibility study.
The sulphides are known to be refractory so metallurgical test work
will follow up on previous flotation, BIOX and ultra-fine grind tests.
At this stage, GAT is projecting production from the sulphide project
of 39 koz in four years time, building to 257 koz/y eight years’ out.
 WO R L D G O L D A N A L Y S T Z I M B A BWE 61

Gold Quarry project

 eanwhile, within the Mutare EPO application, in Manicaland, lies the
M
Gold Quarry project, where there is potential for both open pit oxide
and underground sulphide mining, with silver as a by-product. The
claims are located within the Mutare Greenstone Belt.
The 2009 SRK report determined a Measured resource, in oxide and
transition material, containing just 40 koz at 0.81 g/t gold, but with
745 koz of silver.
However, the consultant has stated that it believes the potential for Gold
Quarry and neighbouring claims is “between 0.5 and 1.5 Moz with a grade
of between 3 and 4 g/t”, based on an assumption that mineralisation is
continuous and to a depth of 400 m and with a strike length of 400 m.
Based on these conclusions, Bilboes intends to initiate an exploration
programme consisting of 6,000 m of drilling at a cost of US$0.5 million
as part of a US$1.6 million investment to take the Gold Quarry project
through to completion of a bankable feasibility study within 2 years.
The company is projecting first production from Gold Quarry after five
years at a rate of approx 12 koz/y rising to 68 koz/y from year eight.
The company has applied for Exclusive Prospecting Orders (EPOs)
which consist of two contiguous areas in Matabeleland (Gwizaan and
Isabella), another two in the Midlands Province (Gweru and Lower
Gweru) and one in Manicaland (Mutare).
GAT is undertaking a private placement to raise US$15 million, mainly
to complete the work for bankable feasibility studies for the Sulphide
and Gold Quarry projects as well as recapitalising its gold mines.
GAT subsidiary, Bilboes Holdings, hopes to undertake a stock
exchange listing and an IPO in 2 years after successful completion of
bankable feasibility studies to fund mine construction.
John Mack
The Golden Valley mine is located 16 km outside Kadoma, on the road
to Chakari. Gold production is about 6-8 koz/y.
Metallon Gold Zimbabwe (Private) Ltd
Metallon Gold Zimbabwe (Pvt) Limited, Zimbabwe’s largest gold
producer, is a private company that owns and operates five gold mines,
with forecast 2010 production (to end September 2010) of 56 koz. The
company is a wholly-owned subsidiary of UK company, Metgold Ltd
(formerly Metallon Corporation Ltd).
The company is planning to list on AIM later this year, ahead
of securing a local listing to comply with Zimbabwean
indigenisation legislation.
Historical background
Like most gold producing mines in Zimbabwe, the company closed
operations in 2008 due to the economic melt-down and re-opened
late in 2009. The current production (2010) is therefore predicated
on this background. Before the melt down, average production was
156 koz, with peak production of 177 koz.
62 WO R L D G O L D A N A L Y S T Z I M B A BWE

Location of Metallon’s mines and projects in Zimbabwe

The company is embarking on an aggressive growth strategy that will see

it produce over 1 Moz by 2015, through expansion at the five existing
mines and two new projects.Total group M&I resources (at 30 September
2008, the latest audit) were 4.0 Moz of gold contained. Recent in-house
work indicates a group global resource base in excess of 15 Moz.
The reports below outline the company’s current thinking but details may
change as it has yet to finalise its business plan.
How mine
How mine is the company’s largest underground mine, whose
production estimate for 2010 is 31 koz of gold at a cash cost of
US$484 /oz. In 2006, the mine produced 60 koz.
As at the end of September 2008, How had 2P reserves of 4.6 Mt
at a grade of 5.3 g/t for 792 koz of gold contained. Additional LOM
resources totalled 5.0 Mt at a grade of 4.9 g/t for 788 koz of gold.
To reach the production target of 255 koz in 2015, Metallon plans to
spend some US$114 million at How on rehabilitation of the North
shaft; the opening of the How South open pit, an expansion of the
plant to a treatment capacity of 75 kt/mth in 2011-2012, enlargement
of the plant to 150 kt/mth capacity in 2014, a new 100 kt/mth shaft .
Shamva mine
Metallon’s second largest underground mine, Shamva, is expected
to produce 15 koz of gold in the current year at a cash cost of
 WO R L D G O L D A N A L Y S T Z I M B A BWE 63

US$882 /oz. In 2006, the mine produced 32 koz. By 2013, the company
hopes to push production up to 164 koz, while pushing costs down
below US$350/oz. The key projects are shaft and mill upgrades
over the next two years with the construction of a new 120 kt/mth
sand treatment plant and the introduction of open pit mining on
brownfields targets which are in the vicinity.
Shamva had 2P underground reserves of 5.5 Mt at grade of 2.82 g/t
for contained gold of 503 koz at the end of September 2008. LOM
resources at the same date were 14.0 Mt at grade of 2.49 g/t for
1.12 Moz of gold contained.
Redwing mine
The largest injection of capital will be at the company’s Redwing mine,
where planned expansion is expected to cost over US$220 million. This
will see production rise from a 2010 estimate of over 2 koz to 200 koz/y
by 2015. Cash costs, meanwhile, are forecast to fall from US$1,183 /oz
to US$285/oz by 2015. Production for the mine in 2006 was 18 koz.
The company intends to refurbish the existing flooded underground
operation, including major works on the shaft systems, to take
production from underground up to 360 kt/y, but the bulk of the capital
is destined for the development of a new open pit (2 Mt/y) and a new
plant to process this open pit and underground ore. The company
will also construct a new slimes dam to accommodate the increased
production at a cost of US$12.5 million. The open pit is projected to
contribute 166 koz to total mine production of 200 koz in 2015.
Figure 7.3: Metallon’s forecast production

1200
Mid-Winter
1000 Motapa
800 Mazowe
koz

600 Redwing

400 Shamva

200 Arcturus

How
0
2010 2011 2012 2013 2014 2015

Redwing had an ore reserve (20 koz of gold contained) as at

30 September 2008 due to down grading of reserves resulting from
the flooding in 2007, but a LOM resource containing 1.1 Moz (9.6 Mt
at a grade of 3.66 g/t), the majority of which is located underground.
Arcturus mine
Metallon recently significantly expanded its plans for Arcturus mine
and now sees over 202 koz of production from this mine in 2015.
Currently (FY2010) the mine’s production is estimated at less than 4
koz. Current infrastructure will be refurbished to cater for 45 kt/mth
yielding 55 koz by 2015. The company will expand the operation
through the sinking of a new shaft at Gladstone and building a new
64 WO R L D G O L D A N A L Y S T Z I M B A BWE

plant, costing US$70 million, to give an expanded processing capacity

of 100 kt/mth, which will deliver an additional 147 koz/y. The total
capital investment envisaged is US$170 million.
Arcturus had an underground reserve of 1.2 Mt at a grade of
4.47 g/t for 174 koz of gold contained at the end of September 2008.
Additional LOM resources, again virtually all underground, amounted
to 3.9 Mt at a grade of 4.69 g/t for 594 koz of gold contained.
Mazowe mine
At Mazowe, the company plans to invest almost US$20 million
in major underground expansion and plant upgrades and the
development of a sands re-treatment plant, which will contribute some
13 koz/y of total gold output of 33 koz by 2015.
Projects
As well as expanding operations at the five operating mines, Metallon
plans to develop two new projects at Motapa and Midwinter.
Motapa, in Bubi near Bulawayo, is due to come into production in 2012
and will require a total capital investment of US$127 million, although
feasibility studies have yet to be undertaken. The project involves the
exploitation of 61 koz of low grade gold in sands; 67 koz of gold in
heap leach dumps and remnant oxides in-situ and, most importantly,
development of an underground mine to exploit the estimated
2.3 Moz of gold at grades of 3.0-5.6 g/t in Indicated and Inferred
resources at Jupiter, Pluvius and Fossicker.
Production of approx 5 koz in 2012 is projected to rise to 114 koz by
2015 at a cash cost of US$388/oz.
At the Midwinter project, Metallon intends to spend US$120 million
to construct a CIL plant to process 220 kt/mth yielding 100 koz/y by
open pit for ten years by 2014 with cash costs running at US$380/oz.
Exploration
To reach its production profile goal, Metallon will have to undertake
a substantial amount of exploration. Accordingly, it has budgeted a
sum of US$12 million to be spent on on-mine exploration, with an
additional US$22 million for project exploration. The business plan
calls for the upgrading of 2.3 Moz of resources at Motapa and 2.2 Moz
at Midwinter.
Mwana Africa plc (AIM: MWA)
Mwana Africa is a pan-African, multi-commodity resources company.
It’s principal operations and exploration activities cover gold, nickel
and other base metals, and diamonds in Zimbabwe, the DRC, South
Africa and Ghana.
Mwana Africa has a 100% interest (with the intention of selling a 15%
stake to a local partner) in the Freda Rebecca underground mine,
located near the town of Bindura, some 90 km north-east of Harare,
which commenced operations in 1988. The mine, acquired from
AngloGold Ashanti in 2005 for US$2.5 million, was placed on effective
care and maintenance in 2007 after producing at a rate as high as
98 koz/y (2002) when owned by the South African major.
 WO R L D G O L D A N A L Y S T Z I M B A BWE 65

Freda-Rebecca
District

Mutoko
Bindura
Greenstone
Greenstone
Belt
Belt

Makaha
Midlands
Greenstone
West Belt
Midlands
P j
Project
Bubi
Greenstone
Belt

Lonely/Turk Mine Areas

Nubobs
Greenstone
Belt
Mwana Project Areas

Exploration potential around Freda Rebecca

Freda Rebecca expansion

The mine operates as a low-grade underground operation comprising
crushing, conventional milling and a combined gravity/CIL process.
Mwana Africa has embarked on a refurbishment programme with
the intention of taking production back to an initial 30 koz/y, with a
subsequent expansion to 50 koz/y.
The company completed the Phase 1 expansion to 30 koz/y in
September last year through a programme of dewatering the mine,
overhauling the mine fleet and refurbishing the processing plant to a
50 kt/mth capacity. Total capital expenditure was US$13.5 million.
The re-opened mine poured its first gold in October 2009 and
marketed it through the Chamber of Mines export licence.
In the six months to end March, the mine processed 205 kt of ore at
an average grade of 1.76 g/t and, with recoveries of 74%, produced
almost 9 koz of gold.
However, the mine ramp up has been slower than expected owing to
poor availability and reliability of the underground mining fleet and the
company offset mined ore shortfalls with lower grade surface stockpile
material with the result that in the nine months to the end of June
2010 the mine produced just 12 koz of gold.
The company has resolved the problems with the mine vehicles and is
confident of reaching target production rate in the current quarter.
Phase II of the expansion programme will entail additional mine
development, additions to the mine fleet and further refurbishment
and expansion of the plant to 80 kt/mth at a cost of US$6 million.
This phase was expected to be completed this month but has been
delayed because the funding, in the form of an Industrial Development
Corporation (IFC) loan, is not yet in place.
66 WO R L D G O L D A N A L Y S T Z I M B A BWE

Funding
The IFC approved a US$10 million debt facility for Freda Rebecca in
November 2009 and the agreement was signed in March this year.
Although the board of IDC has since approved the final terms of the
facility, and the company has completed the environmental management
plan for the mining operations at Freda Rebecca to the IDC’s satisfaction,
drawdown of the facility remains subject to certain conditions.
The most notable of the conditions is the provision by the Export
Credit Insurance Corporation of South Africa (ECIC) of political risk
insurance for the facility, which is itself subject to ratification of the
Bilateral Investment Promotion and Protection Agreement (BIPPA)
between Zimbabwe and South Africa. Whilst this agreement has been
signed by both countries, formal ratification by the South African
parliament remains outstanding.
In addition, the External Loans Coordinating Committee (ELCC) of
the Reserve Bank of Zimbabwe (RBZ) has approved the terms of the
facility. However, ELCC has not approved the provision of certain of
the ancillary arrangements, including the mortgage charge over the
land on which the Freda Rebecca plant is built and the operation of
offshore accounts.
Mwana Africa is working with the ELCC and IDC to agree
amendments to the security package, compliant with the current
exchange control regulations in Zimbabwe.
Provision of the second tranche of the facility, totalling US$6 million, is
also subject to independent verification of JORC/SAMREC compliant
Measured gold resources, sufficient to support a ten year mine life.
An independent technical report on resources after a programme of
re-sampling of existing drill cores is expected imminently.
Geology and reserves
As described in a 2007 technical report by SRK Consulting, Freda
Rebecca lies on the central axis of the synclinal Mazowe-Bindura
Greenstone belt. The geology of the area around the mine is
characterised by the Shamvaian sediments, diorite and granodiorite.
The orebodies are largely hosted by the Prince of Wales diorite
and the Bindura granodiorite. The mineralisation is hosted within
two major shear envelopes. Individual shears are variable in width
and these two systems merge to the south west at depth flattening
at around 850 m elevation and extending into the metasediments.
The shear system is characterised by a set of anastomosing shears
separated by relatively undeformed rock units.
There are two styles of sulphide mineralisation: older disseminated,
pervasive sulphides occurring throughout the sediments, diorite
and granodiorite, which vary in intensity and grade; and younger
mineralisation restricted to shear zones and associated with higher
gold grades. In both types of mineralisation, higher grades are
associated with fine-grained sulphides , such as arsenopyrite, pyrite,
pyrrhotite and chalcopyrite.
As at March 31, 2010, Freda Rebecca had reserves of 4.01 Mt at a grade
 WO R L D G O L D A N A L Y S T Z I M B A BWE 67

of 2.61 g/t for 340 koz of gold contained (91% underground). M&I
resources (including reserves) were 13.2 Mt at a grade of 2.46 g/t for
1.0 Moz of gold contained (97% underground, at a cut-off of 1.5 g/t).
Exploration
On EPOs outside the mining lease, Mwana Africa has identified a number
of exploration targets, perhaps the most significant of which is the
former mine Phoenix Prince, located two kilometres to the south east.
Originally the mine exploited thin, high-grade, near vertical bodies but
exploration has outlined broad, 5 m to 10 m, low-grade oxide lenses.
Outside of the Freda Rebecca area, the company is active on a number
of exploration properties throughout the main greenstone belts
within the country. In the Midlands greenstone belt it is conducting
exploration at the West Midlands project, which lies adjacent to the
dormant Maligreen mine, in which Mwana Africa has a 50% interest.
The interest was acquired through the purchase of Cluff Mining in
December 2005. Pan African (Private) Limited, a Zimbabwe registered
company, holds the other 50% and manages the property.
Located in the Nkayi-Silobela greenstone belt, the mine produced
roughly 23 koz of gold by heap-leaching methods between August
2000 and September 2002.
Irrigation of the dumps continued to August 2004 with some minor
gold recovery. Cluff conducted an extensive drilling campaign to
evaluate the deposit and the sulphide resource, which is open to
depth and to the north, leading to an Indicated resource of 371 koz
contained.
In the Mutoko greenstone belt, Mwana Africa has 100% ownership
of the Makaha deposit, situated 140 km north-east of Harare.The
prospect has a historic (non-JORC compliant) resource of 350 koz at
a grade of 1.2 g/t.
Elsewhere, Mwana is active in the Bubi greenstone belt, at Turk and
Lonely mine areas, and in the Nubobs greenstone belt.
Mwana Africa owns a 53% stake in Bindura Nickel Corp, which
comprises two nickel mines, Trojan and Shangani, a smelter and a
refinery. The Zimbabwe government holds 22%, with the remainder
as free float traded on the Zimbabwe stock exchange. The company
completed construction of an upgraded concentrator at Trojan in
February 2008, but then was forced to place the complex on care-and-
maintenance at the end of that year. In August, Mwana Africa received a
positive report from SRK Consulting on re-starting the Trojan mine.
New Dawn Mining Corp (TSX:ND)
Canadian-listed New Dawn Mining operates the 100%-owned Turk mine
and in mid-2010 completed the acquisition of several more historic mining
projects with its acquisition of an 89% controlling interest in AIM-listed
Central African Gold Plc (CAG).
Its Turk mine, owned through local subsidiary Casmyn Mining
Zimbabwe, which it restarted in 2009, is expanding operations to a
capacity of 23 koz/y and is working towards 35-50 koz/y.
With the acquisition of CAG, giving it an 84.7% interest in Falcon Gold
68 WO R L D G O L D A N A L Y S T Z I M B A BWE

Zimbabwe Ltd (85% of Golden Quarry,Venice & Dalny mines), and a

100% interest in Olympus Gold Mines Ltd (Camperdown & Old Nic
mines), the goal is to reach annualised gold production of 50-60 koz
of gold within two years and 100 koz within 4 to 5 years.
Turk/Angelus mine Phase 1 expansion
The company is looking to raise a minimum of US$10 million (up to
US$25 million) through a share placement, which it hopes to close
before the end of Q3.
The company was forced to put the Turk mine on a care-and-
maintenance basis in October 2008, but in May 2009, it was able to
restart the operation and commenced a ramp up in production to
a rate of 14-15 koz/y gold output, which it has struggled to maintain
because of power shortages. In H1 2010, the mine produced under
7 koz of gold.
The company recently undertook a Phase 1 expansion of the mine and
plant to push the current processing capacity of 15 kt/mth that with
full power availability can produce around 17.5 koz/y of gold, which it
hopes to attain by Q4 this year, to 23 koz/y of gold, which it hopes to
achieve by mid to end next year.
This expansion had the further aim of allowing the operations some
flexibility in an effort to maintain existing production rates when
impacted by power outages and cuts that have burdened the industry.
The company has decided to implement the expensive remedial option

Location of New Dawn’s mines and projects post the Central African Gold acquisition

KARIBA
0 250km

HARARE
3
Dalny Mine
HWANGE
Venice Mine

2 MUTARE
1
GWERU Golden Quarry Mine
Turk and
Angelus Mine Cam perdown Mine
BULAWAYO
Old Nic Mine LEGEND
MAJOR TOWNS 1 BULAWAYO GOLD CAMP
MAJOR GOLD MINES 2 GWERU GOLD CAMP
(<10000KG AU)
3 KADOMA GOLD CAMP
CAG MINES
BEITBRIDGE
NEW DAWN MINE
GREENSTONE BELTS
 WO R L D G O L D A N A L Y S T Z I M B A BWE 69

(US$1.2 million) of installing 3 MVA of diesel generating capacity as

standby power.
Geologically the properties are located within the Bulawayo-Bubi
greenstone belt that typically comprises volcanic and sedimentary
successions. The mines are hosted by a large northeasterly striking
shear zone, which dips steeply to the south within a typical Archaean
greenstone succession of meta-sedimentary and meta-volcanic rocks.
Gold mineralisation occurs in a multiple shear system within this
zone with six major mineralised shears and a number of splays, which
strike over at least 800 m, persist to beyond a depth of 800 m and dip
steeply to the south-southeast.
New Dawn has accessed upper levels at the neighbouring Angelus
mine from Turk and drilling in the section shows that a similar pattern
of multiple reefs and cross-linking structures is also present and that
Angelus simply represents a faulted extension of the Turk structure.
Turk has reserves containing 167 koz of gold and M&I resources of
769 koz according to an SRK Consulting audit at the end of 2009.
Phase 2 expansion
The company plans to expand operations at Turk/Angelus in Phase 2
essentially through working three areas on the property based around
the existing Incline shaft (on the Turk property); the Angelus shaft to the
east and the newly-renovated, shallower Armenian shaft to the west.
To expand from the current production rate level to a milling of
28-30 kt/mth, the company will spend some US$7-8 million on
increasing the hoist capacity, installing a new fine grinding mill
(Deswik) and other equipment, such as compressors and underground
equipment. This will be funded from cashflow and take gold production
up to 35-50 koz/y.
Golden Quarry/Camperdown complexes
The Golden Quarry mine complex, near Gweru, consists of an open
pit/heap leach and a higher grade underground mine feeding a CIL
plant, although neither are operational at present.
The Golden Quarry main ore deposit is located in a large shear in
a structurally complex area, with considerable alteration of the host
lithologies. However, the orebody is not well understood at present.
Management will re-commission the plant at 7-8 kt/mth to produce
6 koz/y. The mine has a very small global resource delineated
underground (70 koz), which will supply some 40% of the mill feed with
the rest originating from other, as yet undelineated, resources. Once the
plant is fully utilised it is expected to produce approx 14 koz/y.
The nearby Camperdown mine previously produced ore material from
both a dual open pit and an underground mining operation, with the
higher grade ore sent for treatment at the Golden Quarry plant and
lower grade oxides treated on site.
Camperdown has a total M&I resource of 270 koz, of which 183 koz is
open pit oxides and surface dump material.
The mine lies in part of the Shurugwi Schist Belt that is a sedimentary
70 WO R L D G O L D A N A L Y S T Z I M B A BWE

The old Camperdown pit is in poor repair but the future may lie underground (Photo: Paul Burton)

succession of conglomerates, grits, phyllites, sandstones, and banded

ironstones (BIF), which is exposed in the open pit. The most important
ore source in the underground mine was the Collingwood Leader.
Like Golden Quarry, the deposit is not well understood so the
company is planning a 4,000 m Phase 1 drilling programme to fully
investigate the potential. The plan may involve the building of a
modular CIL plant to treat tailings ore sources within the region
at a rate of 70-90 kt/mth for 5-6 years, at an estimated capital cost
of US$4-5 million. Once a larger ore resource is defined at the
Camperdown and nearby deposits like Golden Quarry then the
crushing and milling circuit would be added to the tailings CIL plant.
In the short term, the company’s plan is to generate cashflow by
processing dump material from the old Wanderers mine (4.5 Mt at a
grade of 0.64 g/t for around 90 koz gold contained), which lies on the
property. This, along with a smaller dump, has the potential to produce
20-25 koz/y of gold.
Kadoma properties – Dalny/Venice
At the Dalny mine complex, near Kadoma, historical production (to 2006)
was 2.4 Moz of gold from 10.2 Mt of ore treated at a grade of 7.42 g/t.
The mine operated as an underground mine with numerous vertical
shafts feeding a flotation/roaster plant. At its peak the operation
produced 50-60 koz/y.
 WO R L D G O L D A N A L Y S T Z I M B A BWE 71

The Dalny complex is located on the north-western limb of the

plunging Kadoma anticline and is hosted by andesitic to basaltic lavas
of the Upper Bulawayan System that is Archaean in age.
A strong structural control has given rise to mineralised zones
oriented along a northeast to southwest strike with a steep
dip towards the west. The most common sulphides are pyrite
and arsenopyrite, which extend into the schistose country rock
surrounding the narrow, gold-rich part.
According to a recent independent NI 43-101 report, M&I resources
contain 337 koz of gold, 164 koz of which are located underground (at
grades between 5.73 g/t and 7.87 g/t), with the remaining 173 koz in
surface dumps (at a grade of 0.67 g/t).
The site has potential for short term dump retreatment but the longer
term attraction is for recommencement of underground mining and
possible open pit opportunities along the strike of the shear zone.
To this end, the company plans to dewater the W14 shaft bring the
existing plant back into operation at around 9 kt/mth.
The company also plans to conduct an audit of geological information
for the Dalny complex and explore some of the shallower mines
that have been redundant for years. It will investigate the potential to
not only mine multiple reef systems underground but also the ‘halos’
of lower grade gold mineralisation that the old timers missed when
following the quartz vein systems.
Venice, finally, is also in the Kadoma camp. Historical production
(to 2002) was 318 koz of gold from 2.5 Mt of ore treated at a grade
of 3.77 g/t.
The property is considered geologically very prospective, although the
reef geometry is complex and the shaft is flooded. Near term potential
lies with the retreatment of a 1.8 Mt dump.
The company has options at Ladville (Ashtonkop and Ultimus claims)
and Basil Payne, all former mining areas.
RioZim Ltd (ZI:RTNR)
RioZim Ltd is incorporated in Zimbabwe and is listed on the
Zimbabwe Stock Exchange. The company became independent from
Rio Tinto plc in 2004 when the major swapped its 56% interest in
Rio Tinto Zimbabwe for a proportionate share of Murowa Diamonds.
The group currently operates the Renco gold mine, in the south east
of Zimbabwe, as well as gold exploration projects at the site of the
historic Cam and Motor mines. The company also owns the Empress
Nickel Refinery, near the city of Kadoma, in central Zimbabwe; a 60%
joint venture that has extensive chrome claims in the Darwendale area
of the Great Dyke, a 50% interest in Sengwa Colliery, in Gokwe North,
and holds a 22% interest in Murowa Diamonds (Private) Limited (Rio
Tinto plc owns the balance). It is also actively exploring potential
nickel, coal and gold prospects.
Renco expansion
Renco opened in 1982 and has produced over 1.1 Moz of gold since
that time. The mine has a production capacity of over 50 koz/y but
72 WO R L D G O L D A N A L Y S T Z I M B A BWE

Location of RioZim’s mines and projects in Zimbabwe

reported gold output of only 15 koz in 2008 (when it was the only
gold mine that stayed open) and 23 koz in 2009. Production in 2009
came from treating 709 kt/d of ore at a grade of 3.32 g/t with a
recovery of 84%. The mine operated at only 75% of rated capacity
because of frequent power outages, as a result of load shedding, and
numerous plant breakdowns.
The mine is located in the Limpopo Mobile Belt and not in one of the
greenstone belts.
As a result of the reclassification of some ore reserves, proved
reserves at the end of 2009 fell 19% to 346 kt, containing 62 koz
of gold. Over the next five years, the company intends to employ
a combination of diamond drilling and accelerated underground
development of haulages to increase reserves once again to support
significantly increased production levels from 2015 onwards.
According to Reuters, the mine is forecast to produce 24 koz of gold
this year with an increase to 70 koz by 2013 and a further increase to
112 koz in 2015.
In 2009, the company reported a loss of US$16.2 million. At the end
of the year, it had cash of US$2.9 million and borrowings, through an
overdraft facility, of US$29.4 million. Such production expansion as
outlined above will require a substantial capital investment and therefore
RioZim is reportedly looking to raise US$40 million through a rights
issue, having apparently abandoned a similar placement plan last year.
 WO R L D G O L D A N A L Y S T Z I M B A BWE 73

Cam & Motor exploration

Outside of Renco, the company is exploring at the historic Cam and
Motor mines and has completed a programme of digitising old mine plans,
geophysical exploration and diamond drilling.This defined a number of
resources including dump material, “low grade” material used as backfill
in the old stopes, haloes around the old workings and new resources
not previously defined. At the end of 2009, RioZim was able to declare
Inferred resources of 1.3 Mt at a grade of 4.26 g/t for 177 koz of gold
contained at Motor and 0.8 Mt at a grade of 4.74 g/t for 138 koz of gold
at Cam down to a depth of 100 m.The company has high expectancy
that this figure can be increased to 1 Moz down to 200 m when results
of a recent drill programme are incorporated. Drilling is continuing on
the adjacent Petrol Lode and the extensions of both the Cam and the
Motor Lodes.
At One Step, the company completed work in Q1 last year on evaluating
the potential of the prospect and concluded that “the resource did not
have sufficient critical mass to justify the investment into a new plant and
mine at this time”.There were plans back in 2008 to build a 12 koz/y mine
at One Step.
At the Spot gold mine, which is on the Renco mine claims, the company
undertook geophysical exploration in conjunction with further diamond
drilling to improve its knowledge of the mineralisation.The work
confirmed that the reefs are relatively discontinuous, with a high nugget
effect, and as a result the company has downgraded reserves at the mine.
Meanwhile the geophysics work identified significant continuous anomalies
further west, in the direction of the main Renco ore body, which the
company intends to follow up through surface diamond drilling.
Finally, the company was planning to explore at the Kenilworth gold
prospect this year.
Zimbabwe Mining Development Corporation (ZMDC)
ZMDC owns Elvington, Sabi, Jena, all important past producing mines.
Sabi produced just 5 koz in 2009.
ZMDC has a broad mandate as detailed in the ZMDC Act but perhaps
its three main responsibilities as the state mining body are a) to invest
in the mining industry in Zimbabwe on behalf of the State; (b) to plan,
co-ordinate and implement mining development projects on behalf
of the State; and (c) to engage in prospecting, exploration, mining and
mineral beneficiation programmes.

7.3 Other large producers

‘Large’ is something of a misnomer in Zimbabwean gold mining

terms as many of those classified as such are small in global terms as
classified by World Gold Analyst.
Aside from the companies covered in some detail in the proceeding
section, the COMZ categorises many other other producers as large
although their production may amount to no more than 1 koz/y!
Some of those companies, belonging to the COMZ, are listed in the
table overleaf.
74 WO R L D G O L D A N A L Y S T Z I M B A BWE

Table 7.4: Zimbabwe Chamber of Mines: Gold Producers’ Committee

Company 2009 Gold prod. (koz)
Bayham Mining 0
Caledonia Holding 10
Carslone Enterprises 2
Casmyn Mining 10
Delta Gold Eureka Gold Mine 0
DTZ-OZDEO (Pvt) Ltd 7
Duration Gold 2
F A Stewart (Pvt) Ltd 2
Falcon Gold 0
Gat Investments 0
John Mack &/Golden Valley 3
Metallon Gold 18
Pan African Mining 6
RioZim Limited 24
Source: COMZ

Makorakozas
working in one of Duration Gold’s old pits (Photo: Paul Burton)

7.4 Small producers and illegal miners (Makorakoza)

There are a number of very small producers in Zimbabwe but

collectively their direct output totalled only about 3 koz in 2009.
Below this category, as mining activity becomes more and more informal,
there exists another level of producers – illegal miners. Like all countries
where gold is found in easily identifiable and traceable rocks, such as the
quartz veins in Zimbabwe’s greenstone belts, there exists an informal
and illegal mining sector. In Brazil and other countries we refer to them
as “garampeiros”. In Zimbabwe they are called “Makorakoza”.
Although the Chamber of Mines records estimates of Makorakoza
 WO R L D G O L D A N A L Y S T Z I M B A BWE 75

Makorakoza activity at the Old Camperdown pit (Photo: Paul Burton)

production each year the actual level is not known for obvious
reasons. It is very difficult to measure an activity that by definition is
informal and thus not exactly intent on publishing public records.
The COMZ believes Makorkoza production cannot amount to more
than a few kilograms a year for the following reasons:
1) Over the last ten years or so the oxidised gold resource that small
scale and illegal workers had been working on have largely been
exhausted. This leaves hard rock gold resources at depths that
require drilling and blasting with grades far less that the surface
enriched resource of yesteryears. There is no evidence of mining
that leads to such high levels of production.
2) The number of people involved has also drastically reduced
compared to the numbers involved in the 1990 to 2000.
3) The pull for this illegal activity has also disappeared with the use of
multiple currency in the conduct of business. The skewed exchange
rate that existed before the dollarisation in 2009, coupled with the
unrealistic Z$ price offered by the RBZ, were major incentives for
illegal operations. Miners would produce gold, export it illegally and
bring back hard currency that was exchanged on the parallel market
for huge rewards. This does not pay anymore.
Notwithstanding the Chamber of Mines’ comments, in the short time I
was in the country I witnessed considerable Makorakozi activity in some
76 WO R L D G O L D A N A L Y S T Z I M B A BWE

of the disused open pits. ‘Mining’ usually involves some sluicing of ‘run of
mine’ dirt and then hand shovelling into wheelbarrows. Gold extraction
often involves the hazardous use of mercury.
Sometimes the illegal miners are more adventurous and actually engage in
actual mining, burrowing into the walls of old open pits.The Camperdown
pit, shown on the previous page, has evidence of this adit mining.
The Makorakoza activity at this subsistence level is obviously fraught
with danger for the individuals themselves. Despite it being illegal,
neither the police nor the mining companies show much interest in
putting an end to it. The police do occasional ‘raid’ a site and arrest the
miscreants but after receiving a small fine they are back at work the
next day. The mining companies turn a blind eye to it, although most
mine sites employ security guards and fencing, and will probably look
to employ the illegals when they recommence organised mining in the
affected pits.
The final category of producer outside of the formal sector is the
custom millers. These small operations use old style stamps to crush
and mill gold bearing rock that they buy from small, informal miners
and, presumably, from illegals as well. Their setups can be seen all over
the place. One such operation was pointed out to me just metres off
the main road as we drove south from Bulawayo along the road to
Beit Bridge.

7.5 By-product gold production

The PGM smelters at Ngezi and Mimosa produce quantities of by-product

gold.The COMZ records almost 15 koz in 2008, and 26 koz in 2009.

7.6 Explorers

African Consolidated Res. plc (AIM:AFCR)

African Consolidated Resources is an AIM-listed mineral exploration
company with projects in Zimbabwe and Zambia. Within Zimbabwe,
it is active with gold, copper, nickel, diamonds, platinum and
phosphate projects.
It’s gold projects are at Pickstone-Peerless, Gadzema (Blue Rock,
Giant), Chakari and One-Step.
Pickstone-Peerless
Pickstone-Peerless is the site of historic mining operations with past
production from Rio Tinto and others of 427 koz. At Pickstone, gold
was mined from Banded Iron Formations over a 1,200 m strike length
and down to about 700 m depth. At Peerless, there has been little
mining although the mine was developed on four levels.
On the two properties, ACR has drilled out some 450 koz in Inferred
resources at a grade of 1.4-1.5 g/t on the Peerless and Concession
areas. The properties also host 63 koz of Measured resources in
surface dumps.
In July, AGR entered into a memorandum of understanding, subject to
due diligence, with a group of individuals known as the SSSB Group,
 WO R L D G O L D A N A L Y S T Z I M B A BWE 77

for the development of the Pickstone Peerless property. Prior to this,

TWP Investments (PTY) Ltd withdrew from an agreement (after a
corporate takeover) to pay for and build a plant to treat the sulphide
dump material on a tolling basis.
Under the terms of the SSSB Group agreement, the mine, apart from
the sulphide dump, will be transferred to a structure owned 40% by
ACR and 60% by the SSSB Group. SSSB will prepare a pre-feasibility
study and if this indicates an IRR in excess of 30% then will proceed
with a definitive feasibility study.
Blue Rock
At its Blue Rock project, some 30 km to the north of Pickstone-
Peerless, the company recently published a JORC-compliant, near
surface Inferred resource of 8.5 Mt at a grade of 1 g/t for 272 koz
of gold contained. The Blue Rock resource covers 500 m of strike of
ultramafic schists interbedded with BIF and minor mafic volcanics,
all intruded by felsic volcanics. Gold mineralisation occurs within BIF
(where it was historically mined), in narrow quartz veins and in broad
zones in the felsic intrusives.
AGR has identified another trend (Berks) through drilling to the
north-east of Blue Rock and plans over 5,000 m of RC drilling on this
trend and the Shlegani prospect (3 km north).
The Blue Rock resource adds to its resources in the Gadzema
greenstone belt, 100 km southwest of Harare, where it already has an
Inferred resource of 4.4 Mt at a grade of 2.2 g/t for 300 koz of gold
contained at the Giant mine, just 5 km away long strike. Giant mine has
produced 563 koz of gold historically from underground BIF-related
mineralisation. AGR is just completing a 2,000 m diamond drilling
programme, aimed at extending the orebody at depth, along with a
further 3,000 m of infill RC drilling.
Other Projects
The Chakari project is located in a previously unexplored stretch of
the Chakari-North greenstone belt, 30 km long, which partly lies on
the well mineralised Lily Shear zone, north-east of New Dawn Mining’s
Dalny gold mine. Exploration has yielded several exciting geochemical
anomalies, and artisinal panning activity in the area indicates
widespread mineralisation. Further mapping, sampling and RAB drilling
will be conducted to identify economic gold mineralisation hosted in
Archean metasediments and volcanics.
Finally, the company has intersected encouraging grades at One-Step,
which lies approximately 70 km south-west of the Pickstone Peerless
project, and after consolidation of claims, it has secured over 4 km of
mineralised trend.
Cape Range Ltd (ASX:CAG)
Australian company Cape Range, until recently a technology company,
has made a swift entrance into Zimbabwe through the purchase of
options to acquire up to 90% of two Zimbabwean gold companies.
The first option is with Sab Rock Miners (Private) Ltd, which holds the
Orcus, Blue Duck and Eiffel Blue prospects in the Kadoma area. Historical
78 WO R L D G O L D A N A L Y S T Z I M B A BWE

channel samples taken in underground adits has produced exceptional

results including 10.8 g/t over 160 m and 18.9 g/t over 130 m at Orcus;
21.06 g/t over 44 m at Blue Duck and 42.11 g/t over 81 m at Eiffel Blue.
The company is following up these showings with a drill programme.
In a separate transaction, the Australian can earn up to 90% in a small
gold producer, Ox Mining (PV) Ltd, which owns the Inez mine, also
near Kadoma. Inex currently produces around 2 koz/y from open pit
oxides and dump material. The mine has a 350 t/d CIL treatment plant.
Cape Range plans to target deeper, higher grade ore underground
for exploration. The company’s commitment for an initial 10% stake
is US$1.5 million in cash. It can then increase its interest to 51% by
paying US$8 million in cash and shares and then acquire a further 39%
by paying US$15/oz for each JORC resource ounce proved up.
Conquest Resources Ltd (TSXV:CQR)
Canadian-listed Conquest Resources owns the historic Beehive, Babs
and Piper Moss mines, in the Midland goldfield, but is not active on
any of these projects as its main focus is on its Alexander project in
Ontario’s Red Lake camp.
The Babs & Beehive mines are former gold production properties situated
respectively about 10 km north and 30 km northwest of KweKwe.The
mines were developed by African Gold PLC between 1997 and 1998 at
a cost of approximately US$4.5 million and operated for nine months
before being placed on care and maintenance in early 1999.
The mines have a combined historic resource of 360 kt at a grade
of 5.7 g/t.
The Piper Moss mine is a former gold production property situated
just 3 km north of and in a similar geological setting to the Globe &
Phoenix mine. The Moss vein from which most of the past production
of 163 koz at a grade of 10.8 g/t gold was derived can be traced for
over 1,200 m and is up to 2 m wide in places.
DRDGold (JSE:DRD)
South African gold producer, DRDGold, is in collaboration with
Zimbabwe-based Chizim Investments to explore 32 contiguous claims
over 550 ha at the Leny claims, near the town of Norton, which lies
close to Harare. Historic mines Ascot and Epsom are in the locality.
Initial exploration work by Chizim on two veins in 2009 showed
grades varying from 5 to 25 g/t.
Earlier this year, the partners contracted Camden Geoserve to
conduct an initial, 28-week programme that will include updating
the sampling base of the known veins; geophysical exploration using
induced polarisation; and selective trenching and drilling.
DRDGold has invested US$1 million, most of which is seed capital
for the fledging Chizim Gold but US$0.27 million is dedicated to a
diamond drilling programme to determine SAMREC/JORC-compliant
resource by September 2010.
Company Reports

GAT Investments
New Dawn Mining
 WO R L D
GAT Investments
Corporate Details
Name GAT Investments (Private) Ltd
Registered Zimbabwe
Address 3 Cecil Rhodes Drive, Newlands,
Harare, Zimbabwe
Telephone +263 4 788151
Fax +263 4 788156
Email VGapare@gat.co.zw
Website na
Company Description
GAT Investments, a private Zimbabwean company, owns a
number of gold mining operations and projects in Zimbabwe
through local private entity, Bilboes Holdings (Private) Ltd.
The company’s short term business plan revolves around dump
and oxide material treatment but the longer term future is
dependent on the successful delineation and exploitation of
sulphide mineralisation at these former Anglo American properties.
The company has a long term production target from its sulphide
projects of 300 koz/y from a potential resource base of up to
6.5 Moz.
In total, the company holds 1,217 claims covering 6,086 ha in
Matabeleland, Midlands and Manicaland provinces as well as
198,229 ha of exploration licenses under application within the
same provinces, namely: Isabella, Gwizaan, Lower Gweru, Gweru
and Mutare EPO applications..
Key Officers & Management (Bilboes)
Chairman: Edgar Nyamupingidza, Chief Operating Officer of
Kingdom Financial Holdings, a Zimbabwean financial services
group. Group Chief Executive: Victor Gapare, led the
management buyout of Bilboes in 2003 from Anglo American
Corporation Zimbabwe Limited, current president of the
Chamber of Mines of Zimbabwe. Technical Executive: Simba
Chimedza. Projects Executive: Willie Cherewo. Non-executive
directors: Washington Gapare, Jean Maguranyanga, Vulindlela
Ndlovu, Duncan Smith, Michael Tapera.
Funding & Financial Position
In 2009, Bilboes reported revenue from gold sales of US$3.8
million with a gross profit of US$1.7 million. The net loss for
the year was US$0.8 million. The company ended 2009 with a
negative working capital position of US$1.0 million.
The company is undertaking a private placement to raise
US$15 million, mainly to complete the work for bankable feasibility
studies for the Sulphide and Gold Quarry projects as well as
recapitalising its gold mines.The mines have a capacity to produce
15koz/y from dumps and oxide material for the next five to 10 years.
The company, through Bilboes Holdings, hopes to undertake
a stock exchange listing and an IPO in 2 years after successful
completion of bankable feasibility studies to fund mine construction.
G O L D A N A L Y S T Z I M B A BWE 81
Project: Isabella oxides (100%)
6D Status: Depleting
Its main claim blocks are located in Matabeleland
province, 80 km due north of Bulawayo. These
properties were formerly owned by Anglo
American Zimbabwe and the company acquired
them through a management buyout in 2003.
The Matabeleland properties consist of a total of
696 claims covering an area of 3,480 ha.
The Isabella EPO hosts three operating mines at
Isabella, McCays and When grouped together, with
Bubi (on the Gwizaan EPO) some 32 km away.
These shallow (less than 30 m deep) open pit/
heap leach mines have produced some 230 koz of
gold since start up by Anglo American in 1989.
McCays’ ore reserves were depleted by
December 2002 and the company suspended
mining at Bubi and When by May 2005, although it
did continue with intermittent re-leaching of pads
thereafter at the three mines.
Isabella, meanwhile, operated (mining and leaching)
on a start-stop basis until October 2008, when all
the processes at all the mines were stopped until
April 2009.The company has produced 40 koz of
gold from the four mines since the 2003 acquisition.
Each mine has heap leach facilities although
Isabella is the site of the single elution and
smelting plant. Isabella has an installed crushing
plant with a capacity to treat 100 kt/mth of ore.
Future production will be based on an installed
crushing plant capacity of 80 kt/mth at McCays,
When 15 kt/mth and Bubi 80 kt/mth. The mines
are connected to the national electricity grid via
300 kVA transformers with a 150 kVA backup
generator at Isabella.
When I visited in late July 2010, Isabella was the
only plant operating, retreating heap leach dumps,
although it was running well below rated capacity.
Production for seven months in 2009 amounted
to 120 kg (3.9 koz) at a cash cost of US$689/oz.
The short term production target at the Isabella
plant is 175 kg/y (6 koz/y – it has operated at
around 70 koz/y) from old heap leach dumps
and some open pit oxide ore. Longer term, the
company forecasts steady state production from
oxides of 450 kg/y (approx 15 koz/y).
Current oxide reserves amount to 104 koz of
82 WO R L D G O L D A N A L Y S T Z I M B A BWE

The flooded pit at McCays (photo: Paul Burton)

gold contained at an average grade of 0.67 g/t. Project: Sulphide (100%)  Status: Definition
Measured and Indicated resources are 79 koz at a
Although the continuing processing of oxide
grade of 0.50 g/t.
material should enable Bilboes to generate
In order to reach planned output the company cashflow over the next few years, the longer term
is looking to spend US$5 million on the oxide future of the operations in Matabeleland lies with
facilities, comprising new crushing plants at the deeper sulphide resources.
McCays and When (US$1.2 million); additional
The Isabella EPO is underlain by felsic and
earthmoving equipment and refurbishment of
mafic schists and greywackes of the Upper and
process plants at all the mines (US$3.5 million)
Lower Bulawayan volcanic units that form part
and heap leach pad extensions at Isabella and
of the Archaean Bubi greenstone belt. The area
McCays (US$0.3 million).
is transacted by three major structural faults
The production schedule for the oxides is shown with a number of associated splays which have
in the following table. controlled the mineral deposition. Mineralisation
trends north east- south west and is truncated
2009a 2010f 2011f 2012f 2013f 2014f by fault splays and is hosted in a banded iron
Tonnes 294 877 1,860 1,670 1,740 1,740 formation unit.
treated (kt)
Gold (koz) 3.9 5.5 14.2 15.4 14.5 14.5 The Isabella mine mineralisation is located within
Cash costs 689 748 514 486 505 525 a broad shear zone cutting through felsic schists
(US$/oz) close to the contact between the Bulawayan and
a= actual; f= forecast Shamvaian units. Orebody widths range from 5 to
 WO R L D
20 m and have strike lengths from 75 m up to
500 m. The oxide cap is deepest (between 12 and
40 m, with an average depth of 24 m) at Isabella.
Sulphides throughout are predominantly pyrite
and arsenopyrite and are refractory.
Isabella’s geological strike covers over 6 km of
which 70% has been fully explored for oxides.
A December 2009, independent technical report
by SRK Consulting confirmed significant sulphide
resources drilled out on the Isabella, McCays
and Bubi claims and also suggested considerable
potential to upgrade these resources and
delineate additional resources.
End-2009 Inferred resources, based on a
2 g/t cut-off, were 4.7 Mt at a grade of 3.49 g/t
for 534 koz of gold contained down to a depth of
100 m. Beneath this, SRK identified an additional
3.5 Mt of ‘unclassified’ material at a grade of
2.11 g/t for 240 koz of gold contained.
The resource estimate is based on drilling
Elution plant at Isabella (photo: Paul Burton)
G O L D A N A L Y S T Z I M B A BWE 83
undertaken by previous owner Anglo American
Zimbabwe between 1994-98, which consisted of
123 diamond drill holes (for 17,700 m) over a
strike of 3.4 km and down to an average depth
of 150 m.
Following its study of the data, SRK concluded
that there is ‘potential to increase this (534 koz
of Inferred) by 4 Moz through strike and depth
extensions of the known open ended mineralisation.’
This potential comes out of a strike of 8.4 km to
a depth of 300 m. Furthermore, the consultant
inferred that out of this potential resource, about
1-2 Moz could be amenable to mining by open pit
methods down to 100 m.
Accordingly, the company is planning to invest
US$7.2 million over the next two years to
explore systematically the sulphide potential and
complete a bankable feasibility study.
The bulk of the money (US$5.4 million) will
fund an exploration programme to include, as
84 WO R L D G O L D A N A L Y S T Z I M B A BWE
recommended by the consultants’ study, infill
drilling to upgrade the existing Inferred resource
and to provide samples for metallurgical testing,
as well drilling along strike down to a target
depth of 300 m to expand the resource. The
company plans to drill some 48,000 m in total.
The sulphides are known to be refractory so
metallurgical test work will follow up on flotation,
BIOX and ultra fine grind tests, some of which
were conducted during the Anglo American
era, and an amount of US$0.3 million has been
budgeted for this.
At this stage, Bilboes is projecting production
from the Sulphide project of 1,200 kg (39 koz) in
four years time, building to 8,000 kg/y (257 koz/y)
eight years’ out.
Project: Gold Quarry (100%) 
Status: Definition
Gold Quarry lies within the Mutare EPO
application, which is located approximately
50 km east of the city of Mutare. The Manicaland
properties consist of four claim blocks for a
total of 59 claims covering an area of 296 ha.
The company acquired the claims from
Anglo American Zimbabwe in early 2006.
Anglo American explored the area back in
the 1960-70s after small mines worked the
property sporadically in the first half of the
twentieth century.
At Gold Quarry there is potential for both open
pit oxide and underground sulphide mining, with
silver as a by-product.
The claims are located within the Mutare
Greenstone Belt, which strikes west to southwest
as a narrow synclinal structure comprising
ultramafic and mafic rocks of the Bulawayan
group with banded iron formation intercalations
overlain by sediments. Mineralisation within
the Mutare greenstones is associated with
shear zones which tend to be located along the
contacts of the different lithological units and
within the BIF.
Gold deposits are scattered throughout the belt
within and surrounding quartz diorite stocks.
Most have high silver content with associated
lead, zinc and nickel. The sulphides present
include galena, chalcopyrite, pyrite, pyrrhotite
and arsenopyrite.
The 2009 SRK report determined a Measured
resource, in oxide and transition material, using
historic drill data, over the Main, South and
Woodstock areas containing just 40 koz at
0.81 g/t gold, but with 745 koz of silver in the
Main zone.
However, the consultant has stated that it
believes the potential for Gold Quarry and
neighbouring claims is ‘between 0.5 and 1.5 Moz
with a grade of between 3 and 4 g/t’, based on an
assumption that mineralisation is continuous
and to a depth of 400 m and with a strike length
of 400 m.
SRK bases its estimation on two holes, which
intersected sulphide mineralisation at a depth
of 300 m but were not assayed, as well as the
presence of four parallel zones of mineralisation
at Gold Quarry which have only been partly
explored and similar likely extensions at the
adjacent Woodstock claims.
Based on these conclusions, Bilboes intends to
initiate an exploration programme consisting of
6,000 m of drilling at a cost of US$0.5 million as
part of a US$1.6 million investment to take the
Gold Quarry project through to completion of a
bankable feasibility study within 2 years.
Metallurgical work so far has shown that the
ore is not refractory but that there may be
recovery problems associated with the silver.
Thus the company plans to take bulk samples to
test gravity concentration for free gold recovery
before cyanidation, with an option to agglomerate
the fine ore.
The company is projecting first production from
Gold Quarry after five years at a rate of 360 kg/y
(approx 12 koz/y) rising to 2,100 kg/y (68 koz/y)
from year eight.
Project: Exploration (100%) 
Status: Detection
The company has applied for Exclusive
Prospecting Orders (EPOs) which consist of
two contiguous areas in Matabeleland (Gwizaan
and Isabella), another two in the Midlands
Province (Gweru and Lower Gweru) and one in
Manicaland (Mutare).
The EPOs have yet to be approved although the
company applied for three of them back in 2003
and the remaining two a year later. The official
government standpoint is that the company must
demonstrate its technical ability to complete a
 WO R L D G O L D A N A L Y S T Z I M B A BWE 85

proposed exploration programme and raise the • Thirdly, although, the extent of the work
necessary finance for the exploration. So work has not allowed the independent consultant
cannot commence until the funds are raised. to define fully the scale of the deposit, it
Statutory annual fees are up to date. has given it enough confidence to suggest
that the resource potential is probably
The company also owns 472 claims covering a
some 3-5 Moz. That represents a sizable
total area of 2,310 ha in Matabeleland, Manicaland
orebody by anybody’s standards. Finally, the
and Midlands.
depth of the sulphides is relatively shallow
(the average depth of the oxide cap is
Investment Comment
only 24 m) and therefore the potential to
by World Gold Analyst
develop a large open pit is very good. The
consultant’s report suggests that there may
• On the Matabeleland claims, the company has
be 1-2 Moz of gold that could be mined
a reasonably-sized oxide reserve/resource
this way. The sulphide mineralisation is
that can be exploited relatively easily. Although
refractory and although these days that
the material is low grade there are no real
does not represent a technical challenge, it
mining costs involved and processing is
will add to the operating cost profile.
straightforward.The company has a clear
business plan to achieve a production rate • The company’s other project, Gold Quarry,
of 15 koz/y from the oxides, but it will need is at a much earlier stage than the Sulphide
to raise and spend US$5 million to bring the project in Matabeleland, and probably
facilities fully on line. represents less of a compelling investment
given that it appears to be smaller scale
• Re-establishing the oxide processing would
and lower grade. Nevertheless, the
generate cashflow and see the company
consultant’s report has indicated potential
moving into a profit situation in 2011 and
of 0.5-1.5 Moz in resources so it clearly
for five years thereafter.
warrants investigation.
• Longer term, the company’s growth into
• The key with GAT (and Bilboes) is to
a mid-tier gold producer, in world terms,
secure the necessary financing to enable it
depends on the successful development of
to proceed with its plans.
the sulphide resources on the Matabeleland
claims. Already, based on the work that • The management and technical team are
Anglo American did, an independent former Anglo American employees so are
consultant’s report has estimated over familiar with the projects. Both GAT and
0.5 Moz of Inferred resources. The company Bilboes are 100% owned Zimbabwean
plans to upgrade these resources and companies so there is no concern about
expand exploration to cover the full 8.4 km compliance with indigenisation legislation.
of strike length of the mineralisation.
• There are several points that make this
project interesting from an investment
point of view. The first is that it was
owned by Anglo American, which gives it
credibility. A company the size of Anglo
American does not invest in a short term,
small oxide pit project. The company must
have realised the longer term potential and
clearly that’s why it drilled almost 18,000 m
over 3.4 km to outline the sulphides. This
exploration programme represents one of
the few systematic drilling programmes to
investigate and evaluate a deposit on a large
scale that I came across in the country; and
that’s the second point.
 WO R L D G O L D A N A L Y S T Z I M B A BWE 87

New Dawn Mining

Corporate Details The Central African Gold acquisition
Name New Dawn Mining Corp
In June this year, New Dawn acquired from the
Registered Canada three largest shareholders of Central African
Address Suite 301 – 116 Simcoe St. Gold (CAG) – Emerging Capital Partners
Toronto, ON M5H 4E2, Canada (50.0%), HBD Zim Investments Limited (28.2%)
and Investec Asset Management (10.5%) – an
Telephone +1 (416) 585 7890
84.7% interest in Falcon Gold Zimbabwe Ltd
Fax +1 (416) 585 9801 (Golden Quarry,Venice & Dalny mines), which
Email info@newdawnmining.com is listed on the Zimbabwe Stock Exchange,
and a 100% interest in Olympus Gold Mines
Website www.newdawnmining.com Ltd (Camperdown & Old Nic mines), a private
Share Information (close 27/8/10) Zimbabwean company.
Listed TSX Camp: Bulawayo
Ticker ND Project: Turk/Angelus (100%)
6D Status: Depleting
Shares in issue 38.0 million
Share price C$1.39
In October 2008, after 12 years of production,
the company was forced to put Turk on a
52-wk high: C$1.72 low: C$0.71 care-and-maintenance basis following the
Market Cap C$53 million Reserve Bank of Zimbabwe’s refusal to pay for
Company Description
the company’s gold production. In May 2009,
the company restarted the operation and
• Canadian-listed New Dawn Mining operates the 100%-owned
commenced a ramp up in production to a rate of
Turk mine and in mid-2010 completed the acquisition of several
14-15 koz/y gold output, which it has struggled to
more historic mining projects with its acquisition of an 89%
controlling interest in AIM-listed Central African Gold Plc (CAG). maintain because of power shortages.
• Its Turk mine, which it restarted in 2009, is expanding In the March 2010 quarter, Turk produced
operations to a capacity of 23 koz/y and is working towards 3,395 oz of gold at a cash cost of US$653/oz. In
approximately 35-50 koz/y. the June quarter production fell to 3,243 oz, and
• With the acquisition of CAG, the company goal is to reach costs rose to US$747/oz, as the mine suffered
annualised gold production of 50-60 koz of gold within two from unscheduled power shortages and had
years and 100 koz within 4 to 5 years. minor mill and pump repairs to undertake.
• The Turk mine is held through a local, wholly-owned
subsidiary, Casmyn Mining Zimbabwe (Private) Ltd.
The company recently undertook a Phase 1
expansion of the mine and plant, including the
Key Officers & Management installation of a third ball mill, the deepening and
President, chief executive officer, director:Ian Sanders, non- commissioning the Armenian shaft and the current
executive Chairman:Robert Weingarten, other directors: Divo installation of a new, larger crushing plant, to
Milan, Jon North, Phillip MacDonnell and Bryce Fort, chief financial push the current processing capacity of 580 t/d
officer: Graham Clow, investor relations: Richard Buzbuzian.
(15 kt/mth) that at full power availability can
Funding & Financial Position produce around 17.5 koz/y of gold, which it hopes
As at June 30, 2010, the company had cash of US$4.9 million and to attain by Q4 this year, to 23 koz/y of gold, which
short term debt of US$0.5 million. For the nine months to end it hopes to achieve by mid to end next year.
June, the company reported revenue of US$11.3 million and net
This expansion had the further aim of allowing
income of US$0.3 million US$0.01/share).
the operations some flexibility in an effort
The company has only 38.0 million shares outstanding, which
to maintain existing production rates when
closed on the TSX at C$1.39/share on August 27, giving the
company a market capitalisation of C$53 million.
impacted by power outages and cuts that have
burdened the industry. This strategy has achieved
The company is looking to raise a minimum of US$10 million
through a share placement.
only limited success because, since late last year,
88 WO R L D G O L D A N A L Y S T Z I M B A BWE

Location of New Dawn’s camps and projects post the Central African Gold acquisition

KARIBA
0 250km

HARARE
3
Dalny Mine
HWANGE
Venice Mine

2 MUTARE
1
GWERU Golden Quarry Mine
Turk and
Angelus Mine Cam perdown Mine
BULAWAYO
Old Nic Mine LEGEND
MAJOR TOWNS 1 BULAWAYO GOLD CAMP
MAJOR GOLD MINES 2 GWERU GOLD CAMP
(<10000KG AU)
3 KADOMA GOLD CAMP
CAG MINES
BEITBRIDGE
NEW DAWN MINE
GREENSTONE BELTS

ZESA moved away from its agreed load shedding multiple reefs and cross-linking structures is also
schedule and imposed random power cuts on present and that Angelus simply represents a
the mine. Consequently, the company has decided faulted extension of the Turk structure.
to implement the expensive remedial option
Turk has reserves containing 167 koz of gold and
(US$1.2 million) of installing 3 MVA of diesel
M&I resources of 769 koz according to an SRK
generating capacity as standby power.
Consulting audit at the end of 2009 and as shown
Geologically the properties are located within in the following table.
the Bulawayo-Bubi greenstone belt that typically
comprises volcanic and sedimentary successions. Category Tonnes Grade Gold
The mines are hosted by a large northeasterly (Mt) (g/t) (koz)
striking shear zone, which dips steeply to the 2P Reserves 1.32 3.92 167
south within a typical Archaean greenstone M&I resources 4.81 4.98 769
succession of meta-sedimentary and meta- Inferred resources 2.08 5.14 343
volcanic rocks. Based on a cut-off of 2.45 g/t and a gold price of US$875/oz.

Gold mineralisation occurs in a multiple

shear system within this zone with six major
mineralised shears and a number of splays, which
strike over at least 800 m, persist to beyond a
depth of 800 m and dip steeply to the south-
southeast. Widths are variable and average
around 2.5 m but splays or connecting structures
converge to produce 15 m wide reefs in places.
New Dawn has accessed upper levels at the
neighbouring Angelus mine from Turk and drilling
in the section shows that a similar pattern of
The neighbouring Angelus mine has Indicated and
Inferred resources totalling 59 koz of gold.
The company plans to expand operations at Turk/
Angelus in Phase 2 essentially through working
three areas on the property based around the
existing Incline shaft (on the Turk property);
the Angelus shaft to the east and the newly-
renovated, shallower Armenian shaft to the west.
To expand from the current production rate to
a milling capacity of 28-30 kt/mth, the company
 WO R L D
Shaft and ore silo at Turk mine (photo: Paul Burton)
will spend some US$7-8 million on increasing
the hoist capacity, installing a new fine grinding
mill (Deswik) and other equipment, such as
compressors and underground equipment. This
will be funded from cashflow and take gold
production up to 35-50 koz/y.
Although it’s primary focus at this stage is on
getting the operations bedded in at the current
capacity rate and working on the expansion,
New Dawn is starting to apply more time and
resources on its exploration on the properties.
The company is probing the lateral and down dip
extensions of the gold lodes mined previously
on shallower and deeper levels through cross-
cutting and diamond drilling at Batyali and MVS-
Armenian zones at Turk, and at Angelus.
Project: Old Nic (100%)  Status: Depleting
The Old Nic Mine is situated on the eastern
side of the city of Bulawayo, and is one of the
oldest gold mines in Matabeleland. The mine has
produced some 290 koz from high grade (9.4 g/t)
ore but it is not regarded as a key asset because
expansion potential is limited given its proximity
to the city.
G O L D A N A L Y S T Z I M B A BWE 89
Camp: Gweru  Project: Golden Quarry (75%)
Status: Definition
The Golden Quarry mine complex consists
of an open pit/heap leach and a higher grade
underground mine feeding a CIL plant (which also
processed higher grade ore from Camperdown),
although neither are operational at present.
The Golden Quarry main ore deposit is located
in a large shear in a structurally complex
area, with considerable alteration of the host
lithologies. The original rock types are from
a greenstone assemblage, with evidence of
ultramafic and mafic rocks and some intercalated
sediments and local occurrences of banded iron
formation and chert. However, owing to a lack
of detailed geological mapping and drilling, the
orebody is not well understood.
The hoisting capacity is 10 kt/mth, although the
plant can treat up to 20 kt/mth. Management
will re-commission the plant and has blocked
out eighteen months of ore to feed the mill at
7-8 kt/mth to produce 1,200 oz/mth or 14 koz/y.
The mine has a very small global resource
delineated underground (70 koz), which will
90 WO R L D G O L D A N A L Y S T Z I M B A BWE
supply some 40% of the mill feed with the rest
originating from other, as yet undelineated,
resources. Once the plant is fully utilized it is
expected to produce approximately 14 koz/y.
To this end the company is proposing a trenching
programme on the main shear zone strike where
illegal miners (makorakoza) are working and will
also explore at the Santoy/Santoy West claims to
the north.
Project: Camperdown (100%)
Status: Definition
The Camperdown mine is situated approximately
30 km southeast of Gweru, 5 km from Golden
Quarry.The orebody previously produced
ore material from both a dual open pit and an
underground mining operation, with the higher
grade ore sent for treatment at the Golden Quarry
plant and lower grade oxides treated on site.
Camperdown has a total M&I resource of
270 koz, of which 183 koz is open pit oxides and
surface dump material.
The mine lies in part of the Shurugwi Schist Belt
that is a sedimentary succession of conglomerates,
grits, phyllites, sandstones, and banded ironstones
(BIF) that gives rise to a small range of hills north
of Shurugwi. The most important ore source in the
underground mine was the Collingwood Leader.
The BIF, which is exposed in the open pit, dips
gently to the northwest and east, forming a flat
arch with folding towards the south-east portion
of the pit. The ‘Brown’ dyke and another felsic dyke
are main control features on gold deposition.
The deposit is not well understood as under
Falgold’s ownership the only exploration
was underground development, although
re-interpretation of old data has led to a new
model of the BIF ‘arch structure’.
Accordingly, the company is planning a 4,000 m
Phase 1 drilling programme (25 diamond holes
and 75 RC holes) to fully investigate the potential.
The plan may involve the building of a modular
CIL plant to treat tailings ore sources within the
region at a rate of 70-90 kt/mth for 5-6 years, at
an estimated capital cost of US$4-5 million.
Once a larger ore resource is defined at the
Camperdown and nearby deposits like Golden
Quarry, then a crushing and milling circuit would
be added to the tailings CIL plant.
A recent independent technical report
recommended an open pit survey to map out
the extent of the quartz veins and re-assess the
extent of the important Collingwood Leader.
In the short term, the company’s plan is to
generate cashflow by processing dump material
from the old Wanderers mine (4.5 Mt at a grade of
0.64 g/t for around 90 koz gold contained), which
lies on the property. This, along with a smaller
dump, has the potential to produce 20-25 koz/y
of gold.
Camp: Kadoma  Project: Dalny (75%)
Status: Definition
The Dalny mine complex is situated 36 km north
of Kadoma in the Chakari district, approximately
175 km southwest of the capital, Harare. The
property consists of greater than 3,500 claims
covering a strike length of some 25 km.
Historical production (to 2006) was 2.4 Moz of
gold from 10.2 Mt of ore treated at a grade of
7.42 g/t. Power is supplied by ZESA.
The mine operated as an underground mine
with numerous vertical shafts feeding a flotation/
roaster plant. At its peak the operation produced
50-60 koz/y, with the Dalny mine the largest,
although most recently Arlandzer, Turkoise and
the Dawn-Brilliant mines were being worked. In
recent years, Dalny has treated dump material at
a separate leach plant onsite.
The Dalny complex is located on the north-
western limb of the plunging Kadoma anticline
and is hosted by andesitic to basaltic lavas of the
Upper Bulawayan System that is Archaean in age.
Several intrusive quartz porphyries and dolerite
dykes of different ages crop out in the area.
A strong structural control has given rise to
mineralised zones oriented along a northeast to
southwest strike with a steep dip towards the west.
Most of the mineralised deposits situated west
of the Chevy Chase fault (Arlandzer,Turkoise and
Dalny) are predominately of the replacement type,
whilst those to the east tend to be narrow quartz
veins with erratic gold distributions, eg Chadshunt,
Double H, Cheshire Cat and Dawn-Brilliant.
The most common sulphides are pyrite and
arsenopyrite, which extend into the schistose
country rock surrounding the narrow, gold-rich
part. Although most of the gold is very fine
grained and associated with the sulphides, coarse
gold has been observed.
 WO R L D
According to a recent independent NI 43-101
report, M&I resources contain 337 koz of gold,
164 koz of which are located underground (at
grades between 5.73 g/t and 7.87 g/t), with the
remaining 173 koz in surface dumps (at a grade
of 0.67 g/t).
The site has potential for short term dump
retreatment but the longer term attraction is for
recommencement of underground mining and
possible open pit opportunities along the strike
of the shear zone.
The W14 shaft had a capacity 18 kt/mth and the
company plans to dewater the shaft and use it
again as a production shaft. In addition, by spending
around US$250,000, the existing plant can be
brought back into operation at around 9 kt/mth.
The company will investigate the potential to not
only mine multiple reef systems underground
(Dalny mineralisation extends down to 38 level at
1,500 m) but also the ‘halos’ of lower grade gold
mineralisation that the old timers missed when
following the quartz vein systems. Surface work
at Colne/Stella has showed that high grade reefs
have lower grade in between, over a total width of
12-15 m. This sequence is replicated underground
(at 60 m depth) but the old miners only mined the
two high grade reefs, so management is working
on the theory that there may be economic grade
in between, which opens up the possibility of bulk
mining over a potential 1 km strike.
Recent structural remote sensing work (using
QuickBird high-resolution earth observation
satellite in conjunction with Aster image
interpretation) led to a new geological map, which
has picked up structure and identified changes in
shears (E-W) which have potential for duplex reef
structures. It also clearly picked out potential drill
targets in areas where illegal miners are working.
There are also thought to be open pit
opportunities at Colne, Maldon and Arlandzer
where near-surface mineralisation remains intact.
The company plans to conduct an audit of
geological information for the Dalny complex and
explore some of the shallower mines that have been
redundant for years, such as Dalny, Pixy and Stella.
Project: Venice (75%)  6D Status: Definition
Venice is situated approximately 28 km south of
Kadoma and consists of over 2,500 claims that
have numerous exploration targets. Historical
G O L D A N A L Y S T Z I M B A BWE 91
production (to 2002) was 318 koz of gold from
2.5 Mt of ore treated at a grade of 3.77 g/t. The
mine complex has a metallurgical facility that has
capacity to process 18 kt/mth.
The property is considered geologically very
prospective, although the reef geometry is
complex and the shaft is flooded. Near term
potential lies with the retreatment of a 1.8 Mt
dump using hydraulic sluices utilising water from
underground at a treatment rate of 30 kt/mth
over a 4 year period.
Project: Other properties 
Status: Definition/Discovery
In the Gweru camp, the company has options at
Ladville (Ashtonkop and Altimus claims) and Basil
Payne, all former mining areas.
At Altimus, the company has completed 3,000 m
of trenching on a broad geochemical anomaly.
Other potential within the camp exists to the
north where New Dawn has options on the RKB
property and will conduct trenching on 7.2 km of
BIF strike
New Dawn is in discussions with a company for a
regional dump processing project.
Investment Comment
by World Gold Analyst
• The company completed the acquisition of
CAG through the issuance of 3.5 million shares
with an equivalent value of roughly C$4 million.
In addition, New Dawn effectively settled the
debt owed to the three shareholding groups
by CAG through issuing a further 5.3 million
shares and 2.2 million, 4-year warrants
with an exercise price of C$2.00/share. As
a consequence, US firm, Emerging Capital
Partners, is now the third largest shareholder in
New Dawn with a 12.8% interest.
• Although the new assets will need some
not-inconsequential refurbishment work,
this move will give the company the
opportunity to grow at a much faster rate
than organically from its own projects.
The potential offered by these new assets,
particularly in the Kadoma camp, will show
this acquisition to be great value in the
longer term. It also establishes New Dawn
as the prime consolidator in the burgeoning
Zimbabwe gold landscape.
92 WO R L D G O L D A N A L Y S T Z I M B A BWE

• There was an immediate outcry from the • The company is looking to raise a
government over New Dawn’s acquisition minimum of US$10 million (possibly up to
of CAG with the claim that it “did not US$25 million) – US$3 million for accrual
comply with empowerment regulations payable for Falgold; US$2 million for working
and threatened Zimbabwe’s security and cap to rejuvenate existing ops; US$5 million
economic interests”. There should be no to new compressors and equipment to take
concern for investors on this. Management production up to 50-60 koz/y over next
has had discussions with government officials 18 months for all ops.
and explained New Dawn’s long presence in • In October last year, New Dawn managed to
Zimbabwe through Casmyn Mining and the sell the bond secured from the Reserve Bank
fact that the chief executive is a Zimbabwean of Zimbabwe in lieu of payment for gold sales
national and lives in Bulawyo. Furthermore, in 2008 for the sum of US$2.4 million. Other
the acquisition is unlikely to fall foul of the companies are still waiting for the RBZ to
Competition Act of Zimbabwe. honour it’s bonds.
• At its original operating property, Turk/ • The company is listed in Canada and has
Angelus, there is potential to expand the access to capital markets. After the CAG
mining focus to additional lodes as past acquisition it still only has 38 million shares
mining at Angelus only exploited one lode outstanding.
(the miners worked two at Turk). Also,
historic mining operations worked to a
depth of 800 m and with current mining no
deeper than 200 m this suggests that there
is scope to develop deeper parts of the
mine property.
• Exploration work could open up significantly
more resources according to SRK
Consulting. In a December 2008 independent
report, the consultant states “SRK are of
the opinion that it is not unreasonable
to expect that between 1.5 and 2 million
ounces at a grade of between 4.0 and 4.5 g/t
will eventually be mined at Turk and Angelus
Mines, excluding the current Resource and
Reserve inventory...”.
• With the installation of power generators at
Turk, the company should be able to reach
its current capacity and then to expand
operations up to the intended 35-50 koz/y
level. Importantly, New Dawn does not have
to really on outside funding for this expansion
– it will be funded from cashflow.
• At the Kadoma camp, the potential is good
to look at bulk mining opportunities once
the company has completed a full geological
investigation. There is underground potential
to mine two parallel reefs and the halo
in between. In some case the same reef
orientation is relatively close to surface so
may be amenable to open pit mining.
 WO R L D G O L D A N A L Y S T Z I M B A BWE 93

Headgear at Dalny (photo: Paul Burton)

94 WO R L D G O L D A N A L Y S T Z I M B A BWE
 WO R L D G O L D A N A L Y S T Z I M B A BWE 95

Company Index

African Consolidated Resources 76-77

Caledonia Mining Corp 51-53
Cape Range Ltd 77-78
Carslone 53
Chizim Investments 78
Conquest Resources 78
DRDGold 78
Duration Gold 53-58
FA Stewart and Son 58
GAT Investments 58-61, 81-85
John Mack 61
Metallon Gold 61-64
Mwana Africa 64-67
New Dawn Mining 67-71, 87-92
Ox Mining 78
RioZim 72-73
Zimbabwe Mining Development Corporation 73
96 WO R L D G O L D A N A L Y S T Z I M B A BWE

Appendix: 5-year production history by mine

Gold production (koz)

Mine 2006 2007 2008 2009 2010 (H1)

Ardcor Ltd + Bilbos Holding 0 0 na 0 0
Ashanti 9 1 na 3 9
Bayham Mining 0 0 na 0 0
Boreal Investments 0 0 na 0 0
Boulder Mining 0 0 na 0 0
Bronfield Mines 2 2 na 0 0
Calcite 3 3 na 4 1
Caledonia Holdings Zimbabwe 24 12 na 10 7
Canterbury Mining 1 0 na 0 0
Carslone enterprises na 4 na 2 1
Casmyn 13 12 na 10 7
Delta Gold Zimbabwe na 1 na 0 0
DTZ - OZGEO na na na 7 4
Duration Gold na 2 na 2 8
Exmine Syndicate 0 0 na 0 0
F A Stewart 4 3 na 2 2
Falcon Gold 16 10 na 0 0
Forbes & Thompson 15 12 na 10 na
Harris J E 0 0 na 0 0
Horn Mine 0 0 na 0 0
Hunderson And Sons 1 2 na 1 0
John Mack & Company 11 8 na 3 2
Knobthorn Mining 0 0 na 0 0
LE Starling 1 1 na 0 0
Maligreen 0 0 na 0 0
Metallon Gold Zimbabwe 131 68 na 18 22
Olympus Gold Mine 4 4 na 1 1
P E Steyn 0 0 na 0 0
Pan African Mining 10 4 na 6 6
Pegolin Mining Ltd 0 0 na 0 0
RIOZIM 22 20 na 24 9
Sabi Consolidated 17 12 na 5 4
Sebwe Investments 0 0 na na na
Tiger Reef 0 0 na 0 0
Total Large Producers 291 182 81 108 70
Total Small Producers 18 7 0 1 1
Custom Millers 31 14 13 23 18
Other producers 5 3 4 2 2
By-product from platinum 19 19 15 26 14
Total Gold Production 365 226 112 160 105
 WO R L D G O L D A N A L Y S T Z I M B A BWE 97

Makorakoza at one of Duration Gold’s pits Examining vein contact underground at Turk (courtesy New Dawn Mining)

Mine geologists and miners underground at Turk (courtesy New Dawn Mining)
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