- November 19, 2020
- Posted in NEWS
Last year saw a local crocodile skin and meat business investing in a gold mine which attracted a lot of side-eyes. But the investment in Dallaglio Investments (Pvt) Ltd by Padenga Holdings now looks like a case of good timing.
Eureka Mine’s new owner, Dallaglio, invested US$23 million in rehabilitating its plant. Before reopening the mine next year, the company expects to invest an additional US$26 million. The Guruve mine, which was previously operated by Delta Gold, has been closed for nearly 20 years.
A big gain for Padenga will be the resumption of mining, which stunned the market when it bought 50.1 percent of Dallaglio last year.
The investment was part of a plan to diversify crocodile skins away from its main market. The business was keen to transition into a new company with 79 percent of Padenga’s 2018 revenues accounted for by only one European luxury goods brand.
The move to gold drew some cynicism on the market, but the latest trading update from the company indicates that Padenga might have timed its play well.
Dallaglio is planning to spend an estimated US$26 million to return the mine to production.
A total of US$15,189,745 was spent on this project in the nine months to September 2020. This is in addition to the US$7,886,026 invested in 2019, taking the overall expense of the project to US$23,075,771 to date.
Until commissioning, another US$26,300,658 is budgeted to be spent on this initiative, says Padenga in a trading update.
The reconstruction of the Eureka Mine is expected to be finished by mid-2021.
The restoration of the Eureka Mine is expected to be completed by mid-2021 and will dramatically increase the group’s gold production volumes and profits.
The steady gold prices on the world market would raise both the sales and profits of the Dallaglio mining company.
Eureka’s previous owners, Vast Wealth, had announced before selling the mine that the open-pit mine had been entirely flooded. It would have to be dewatered, after which it was necessary to conduct grade control drilling was to be undertaken.
At Pickstone, this year’s gold output would be higher than last year, the firm says.
Though Pickstone’s latest profit figures are not yet available, Pickstone posted US$26.7 million in 2018 in revenue and US$2.7 million in net profit.