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Fidelity gold buying prices Friday 16 October 2020

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Fidelity gold buying prices Friday 16 October 2020

Fidelity Printers and Refiners (FPR) official gold buying prices Friday 16 October 2020

SG 90% and above   $54,43/g

SG above 85% but below 90%   $53,52/g

SG above 80% but below 85%    $52,31/g

SG above 75%  but below 80%.   $ 51,70/g

SAMPLE below 10g but above 5g $52,91/g

FIRE ASSAY CASH   $54,74/g

Exchange rate        81,3458

 

Cash available. Fidelity Printers and Refiners prices will be changing daily in relation to world market prices.

Contact FPR

No. 1 George Drive, Msasa, Harare, Email: [email protected], Telephone: +263 242-486670, +263 242-486694, +263 242-487131, +263 242-447810-5

Crackdown on smuggling revives Tanzania gold industry

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Crackdown on smuggling revives Tanzania gold industry

Tanzania’s gold-mining industry is showing signs of a renaissance following a crackdown on smuggling and the settlement of a long-running dispute with Barrick Gold Corp.

Gold has overtaken tourism as the East African nation’s biggest foreign-exchange earner, while Barrick’s joint venture with the Tanzanian government paid its first cash dividend of $250 million earlier this week.

That turnaround comes after a public battle between the government and Barrick’s Acacia Mining unit culminated in an export ban that crippled its operations. Tanzanian President John Magufuli’s aggressive stance has also made foreign investors wary of a country that’s largely failed to deliver on its potential for large, low-cost mines.

EARNINGS FROM GOLD EXPORTS SURGED 43% IN THE YEAR THROUGH AUGUST AS BULLION RALLIED

Earnings from gold exports surged 43% in the year through August as bullion rallied, Barrick resumed shipments and trading centers established by the government deterred smuggling. Now Tanzania wants to double the contribution of mining to 10% of the economy over the next five years, Mining Minister Doto Biteko said in an interview.

That rebound follows Barrick’s agreement 12 months ago to pay $300 million and hand over 16% of Twiga Minerals Corp., its renamed local business, to settle the dispute with the government. The outlook for the industry will partly depend on Twiga’s success, although regulatory challenges will continue to make the country a difficult jurisdiction, according to Ed Hobey-Hamsher, a senior analyst at Bath, England-based Verisk Maplecroft.

Ownership model

“Investors cannot guarantee that the regulations are enforced in a timely and uniform manner, and that they will receive the exemptions and deferments to which they are entitled by law,” he said. “The issuance of mining permits has resumed but progress will remain slow.”

Barrick Chief Executive Officer Mark Bristow has said the Tanzanian operations could eventually rank as a so-called tier-1 asset, producing more than 500,000 ounces a year. At the same time, Tanzania plans to use Barrick as a model to structure other ownership deals with miners, including with AngloGold Ashanti Ltd.

AngloGold’s Geita mine is one of the company’s highest-producing and lowest-cost mines. The government this year granted AngloGold a permit to convert its open-pit mine to an underground operation.

“This is a significant step forward and will unlock an estimated one-third of the underground mineral resource and continue to build on Geita’s longer term plan and bolster ore reserve growth,” spokesman Chris Nthite earlier this week.

Bloomberg News

Endeavour restarts Boungou mine in Burkina Faso

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Endeavour restarts Boungou mine in Burkina Faso

Canada’s Endeavour Mining (TSX:EDV), West Africa’s top gold producer, has resumed operations at its Boungou mine in Burkina Faso, about a year after previous owner Semafo decided to shut it following an attack that killed 39 civilians.

The Toronto-listed miner said the reopening of the mine follows infrastructure improvements and a new security plan developed in “close partnership” with Burkina’s government.

ENDEAVOUR, WHICH ACQUIRED BOUNGOU’S PREVIOUS OWNER IN JULY, HAS CONFIRMED POTENTIAL SYNERGIES OF $35 MILLION TO $40 MILLION DURING THE INTEGRATION PROCESS

Endeavour, which acquired Semafo in July, has confirmed potential synergies of $35 million to $40 million during the integration process. About 60% of the synergies would be progressively unlocked by the end of 2020 and the remaining in 2021, the miner said.

“The newly acquired assets are now well embedded into our West African operating model,” Endeavour president and chief executive, Sebastien de Montessus, said in the statement.

“In addition to the significant procurement, supply chain, and G&A savings, we are also seeing the benefits of softer synergies that arise from being the largest gold producer in Burkina Faso.”

The company noted the Boungou plant has been processing stockpiles since early 2020. Endeavour said it expects the mine to achieve the top half of its 2020 production guidance range of 130,000 ounces to 150,000 ounces of gold, at an all-in sustaining cost of $680 to $725 per ounce.

Dual listing

Endeavour Mining said in August it was considering a dual listing either in London or New York in the wake of its merger with Semafo.

The company’s management team is already based in London, so favouring the listing in the UK wouldn’t come as a surprise.

With a market cap of C$5.7 billion (about $4.3bn), Endeavour would be among the most valuable precious metals companies currently listed on the LSE.  These include Russian duo Polyus (LON: PLZL) and Polymetal International (LON: POLY), Mexico-focused Fresnillo (LON: FRES) and Canada’s Yamana Gold (LON: AUY), all of whom have market values of more than $4.5bn_Mining.com

ZMF calls for miners input on Government consultative meeting

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ZMF calls for miners input on Government consultative meeting

The Zimbabwe Miners Federation (ZMF) is requesting for input from small scale and artisanal miners on any issues and concerns that need redress by the Ministry of Mines and Mining Development and other line ministries that affects the mining industry.

The Ministry of Mines and Mining Development will be holding a multi-stakeholder consultative meeting on the overall performance of the Mining Sector.

ZMF  is one of the key stakeholders that have been slotted to make a presentation it is therefore calling miners for an urgent response to this request.

[pdf id=8790]

 

Mozambique: Government to set up warehouses, mobile brigades to certify diamonds, precious metals and gems

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Mozambique: Government to set up warehouses, mobile brigades to certify diamonds, precious metals and gems

Mozambique’s government is next year to set up three warehouses for the certification of diamonds, precious metals and gems produced in the country, with the aim of ensuring that they can circulate legally in the international market, it announced on Monday.

According to the executive secretary of the Ministry of Mineral Resources and Energy’s management unit for the Kimberley Certification Process, the three warehouses are part of reforms that the Mozambican executive must institute to join the process.

The system in question was created to ensure that only items that have been legally extracted are sold, preventing the sale of so-called “blood diamonds” and other precious gems that are mined in war zones and whose proceeds thus help fuel conflicts.

“We will have warehouses in Maputo, Manica and Nampula to … control all production of diamonds, precious stones and gems, to be verified, sealed, certified and exported,” the official in question, Castro Elias, told journalists.

He said that the warehouses will function as “a single window,” because all the services necessary for certification will be there, notably customs and mineral resources inspection services, he said. Mobile brigades are also to be set up for producers who work far from the warehouses, also to verify the origin of and certify diamonds, precious metals and gems.

This system will also prevent Mozambique from being used as a corridor for illicitly mined diamonds in other countries, he added.

According to Elias, a team of international experts from the Kimberley Certification Process would visit Mozambique next year to verify whether the conditions are in place for Mozambique’s acceptance into the mechanism. The mission had been scheduled for next month, but was delayed due to constraints caused by the Covid-19 pandemic.

Acceptance into the Kimberley process is urgent, Elias said, noting that many investors have frozen their activities in the country due to the impossibility of marketing diamonds mined there because Mozambique is not yet part of that mechanism.

“We currently have 47 prospecting and research licenses and 78 applications that are running their legal procedures to obtain prospecting and research licenses,” he said. “We have already had some companies in the field doing the research, but they had to stop because they couldn’t export their samples for analysis.”

The Kimberley process only requires the certification of diamonds, but Mozambique wants to go further by also applying for international certification of gems in that mechanism, in order to bolster the market for local production.

Source: Lusa

Prospect raises $6mln for pilot lithium plant

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Prospect raises $6mln for pilot lithium plant

PROSPECT Resources, which is developing the Arcadia lithium project in Zimbabwe, has raised $6 million for developing a pilot plant to produce low iron spodumene and high purity petalite samples.

The Zimbabwe-focused resource commodity group owns the Arcadia Lithium project, near Harare. In August, it announced that assaying results have confirmed the potential to become the world’s only supplier of premium glass and ceramics market.

Prospect said the funding for the intended pilot project at Arcadia was raised through a private placement.

“The company is pleased to announce it has received subscriptions for 46 153 847 new ordinary shares at $0,13 per share to raise $6 million before costs (placement).

“The shares will be issued on Tuesday, 20 October 2020,” it said. Viriathus Capital acted as sole lead manager and worked with Fresh Equities who assisted with cornerstone support of $5,5 million.

“Funds raised from the placement will be used towards production of low iron spodumene and high purity petalite samples for downstream off-takers and customers through the design, supply and operation of a flotation pilot plant, project finance activities and working capital,” it said.

Prospect managing director, Mr Sam Hosack, was quoted saying that this transformation growth capital will be deployed prudently on advancing the Arcadia lithium project.

“The strong demand from a number of institutional investors is in support of Prospect’s plan to get into production,” he said.

“Prospect is pleased with this successful placement by Viriathus, enabling the business to build on its momentum as we complete the qualification process with glass and ceramics customers, continuing to advance our project economics as we target near term production.”

Early last year, the Zimbabwe Special Economic Zones Authority (Zimseza) announced that the Arcadia lithium project was set to attract US$165 million in foreign direct investment with potential to generate an estimated US$3 billion income in the first 12 years of operation. It is anticipated that the Arcadia lithium project will create up to 10 000 jobs along the value chain.

 

The Chronicle

UK firm eyes gold opportunities in Zim

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UK firm eyes gold opportunities in Zim

A United Kingdom based investment company, Contango Holdings, is eying gold opportunities in Zimbabwe, which the company said could be monetised in order to provide material value to shareholders in the short term.

The resource firm, which is listed on the London Stock Exchange, already has business interests in Zimbabwe after acquiring a 70% shareholding interest in Lubu coal project in Hwange district recently.

Local partners hold the balance of 30% in the project.

Contango Holdings expects to start production before year-end.

Lubu is one of the biggest deposits in southern Africa, with an estimated total resource of 2bn tonnes of coal.

The company said as part of its growth strategy, its focus remains on targeting assets with near term cash flow, low capital commitments, and short payback periods.

“Contango has benefited from both its regional expertise in Zimbabwe and the profile of its UK listing, such that a number of opportunities have emerged that appear complementary to the company’s growth strategy.

“In particular Contango has identified a number of gold opportunities which could be monetised in the near-term through a toll treatment model in conjunction with exploration/development upside,” the company said in a statement.

This, the company said would enable a staged development and expansion, along with potential asset level or off-take funding, which would minimise any dilution and offer significant value to shareholders, particularly given the current gold price environment.

Recently, Contango signed two take-off agreements with South Mining and CoalZim Marketing Limited for coal products produced at the company’s Lubu coalfields.

The company expects to seal additional off-take agreements before year-end. Commissioning of Lubu and appointment of contract miners is also expected before the end of this year.

“We have made pleasing progress with Lubu over the last few months – progress which is all the more notable due to the exceptional operating environment that we have found ourselves in due to the Covid-19 pandemic.

“I am confident that as southern Africa increasingly returns to normality over the coming weeks and months, the letter of intent that we have secured thus far will translate into formal lucrative coal off-take agreements.

These are expected to be joined with other agreements in due course,” Contango Holdings executive director Carl Esprey said.

He added: “Our progress with Lubu has laid the foundations for what we believe will be a very profitable cash generative operation.

As such our attention is now turning to our wider complementary growth strategy, which includes the acquisition of businesses or assets with clear paths to cash flow and which have already been de-risked through previous exploration.”

The Contango board is currently evaluating a number of gold opportunities which are in line with these key investment principles and which have the potential to provide material value to shareholders in the near term_Business Times

Gold deliveries decline 73 percent

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Gold deliveries decline 73 percent

Zimbabwe’s gold deliveries in September plunged by 73% to close at 1.36 tonnes from 2.8 tonnes in the comparative period in prior year owing to rampant smuggling by small scale miners who blamed payment delays being faced by the miners.

The country’s small scale and artisanal gold miners have emerged as the cornerstone of the sector in the past few years producing and delivering more gold than large-scale mining houses.

Zimbabwe has more than 4,000 recorded gold deposits and has an ambitious plan to grow the mining sector annual earnings to US$12bn by 2023, with gold expected to contribute US$4bn.

Although there are no official statistics, estimates suggest small-scale gold mining control more than 60% of active gold deposits in the country.

And the bulk of the yellow metal is delivered by small scale miners.

The sharp fall, notwithstanding that gold mining was declared an essential service during the Covid-19 lockdown period, paints a gloomy picture.

The downturn in output coincided with the country’s sole gold buyer, Fidelity Printers and Refiners (FPR)’s failure to pay for deliveries on time, a situation which has forced the small scale miners to sell their yellow metal to alternative markets.

Recently, Home Affairs Minister, Kazembe Kazembe, said Zimbabwe was losing more than US$100m worth of gold due to smuggling.

Finance Minister, Mthuli Ncube, concurred with Kazembe.

It is understood that some buyers pay United States dollars on the spot.

This would mean it would be difficult to meet the target.

FPR, a unit of the Reserve Bank of Zimbabwe, committed to make 100% United States dollars as part of efforts to improve bullion deliveries.

But, this has been hampered by the delays in payments, resulting in them selling to other markets.

They said if the Reserve Bank of Zimbabwe and FPR start making payments on time, it would be easier to speed up economic recovery.

Subdued gold deliveries will likely affect gold export receipts.

The crisis is likely to worsen Zimbabwe’s foreign currency woes.

Gold is the largest foreign currency generator followed by tobacco.

FPR general manager, Fradreck Kunaka, blamed Covid-19 pandemic as the major contributor to decline in gold deliveries and the late payments to gold producers.

“Gold deliveries have gone down 73% to reach 1.36 tonnes during September 2020 from 2.8 tonnes last year due to restrictions imposed by Covid-19 pandemic which hampered operations as it restricted the movement of mining raw materials and people especially the small scale miners,” Kunaka told Business Times, warning of a likelihood of sustained low deliveries till year-end.

Gold Miners Association of Zimbabwe chief executive Irvine Chinyenze said FPR should make payments on time.

“We can’t deny the effects of Covid-19 as it delayed the shipping in of raw materials from China and other countries but the major reason for the fall in gold deliveries was that FPR continues with some talk shows telling people that their money will be paid, the way to go is just look for the US dollars then clear the backlogs and begin paying on spot.

Certainly by so doing everyone will deliver to them,” Chinyenze said.

“As long as small scale miners do not get paid instantly the country will lose a great deal of minerals and revenue as miners search for alternative markets for their precious minerals.”

He said small scale gold producers “don’t protest in the streets” and the fall in gold deliveries showed the sector’s “sign of displeasure in gold payments”.

Cumulative gold deliveries figures up to September 2020 have fallen 28% to 14.76 tonnes compared to 20.64 tonnes delivered during the first nine months of 2019.

This comes as Zimbabwe’s cumulative bullion export receipts to August have gone down 4.9% to reach US$641.3m during the first eight months of 2020 from US$674.4m earned during the comparative period in 2019 due to a huge fall in July and August gold deliveries.

During the first eight months of the year the exported yellow metal was 24.9% down to 11.7tonnes from 15.5tonnes shipped during the same period last year.

The yellow metal is now the highest forex earner and contributes 38% of the country’s total earnings and more than 60% to the mining sector which is the highest forex earning sector in the country.

Zimbabwe is battling leakages attributed to late payments amid indications that over 34 tonnes are believed to have been smuggled out of Zimbabwe.

It is targeting 100 tonnes of gold per year by 2023, a figure which is expected to help the mining sector to earn US$12bn yearly.

Gold is expected to lead the charge with US$4bn_Business Times

HIV time bomb in mining sector: NAC

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HIV time bomb in mining sector: NAC

Zimbabwe’s small scale and artisanal mining sub-sector has recorded the highest HIV and Aids infections in the past few months, a situation which is likely to hamper operations at a time when demand for minerals is booming, the National Aids Council (NAC) has said.

The workers who haul up the earth’s riches, especially small scale gold miners, have emerged as the cornerstone of the subsector after upstaging large scale mining houses in the past few years.

NAC chief executive officer Bernard Madzima told Business Times that small scale and artisanal miners were prone to HIV and AIDS more than other populations in Zimbabwe due to their operating environment which lacks proper health facilities.

This is despite the fact that Zimbabwe and the SADC region has made significant progress in fighting the HIV and Aids epidemic.

“When they are in those various areas where they are doing mining there are no proper health facilities and their behaviour in most of the cases lead them to be more vulnerable to HIV and Aids.

This group handles large sums of money and they become easy prey for commercial sex workers,” Madzima said.

“So it’s important for the country to come up with specific programmes for them, in terms of behavioural change, in terms of them accessing safe sex, safe family planning methods and safe sexual reproductive health services and commodities.”

Several recent studies have revealed that very high risk sexual behaviour was more frequent among small scale miners, partly due to drug abuse.

Illegal mining operations are now rampant in Zimbabwe, a situation which has resulted in the transmission of HIV and Aids and other sexually transmitted diseases.

Last year, Shurugwi district recorded highest HIV prevalence rate of 17% against the national average of 13%.

According to official data obtained from NAC, Shurugwi district, on average recorded about 300 cases of sexually transmitted infections in the last quarter of last year_Business Weekly

Zimplats annual production increase 7 percent

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Zimplats annual production increase 7 percent

Zimbabwe’s biggest platinum producer, Zimplats holdings’ productions increased by 7 per cent when the miner extracted 7.2 million tonnes of ore 700 thousand more than the 6.7 million tonnes achieved in FY2019 the company’s chairperson of Board Dr Fholisani Sydney Mufamadi has said.

Rudairo Dickson Mapuranga

Through his annual message to the company’s stakeholders, Mufamadi also said that milling volumes for the Ngezi based miner increased by 300 thousand tonnes due to the tonnes addition from the company’s Mupani mine and fleet productivity enhancement initiatives.

“Your Company mined 7.2 million tonnes of ore, 7% more than the 6.7 million tonnes achieved in FY2019. Milling volumes also increased from 6.5 million tonnes in FY2019 to 6.8 million tonnes due to ore from Mupani Mine and benefits of fleet productivity enhancement initiatives that started towards the end of FY2019 and have now been rolled out to all the underground mines. The concentrator plants outperformed their previous year throughput due to higher running time and milling rate.”Mufumadi said in the report.

The 6E ounces produced increased marginally to 580 178 ounces from 579 591 ounces achieved in FY2019. The positive impact of the 5% increase in mill volumes on metal production was partly offset by in-furnace inventory build-up on start-up after the 122 days major furnace rebuild shutdown which commenced on 10 June 2019 and was completed in the first half of FY2020.

The Group recorded a profit for the year of US$261.8 million, 81% increase from US$144.9 million achieved in the prior year. This was mainly attributed to the increase in revenue (US$868.9 million in FY2020 compared to US$631 million in FY2019) arising from improved metal prices and decrease in exchange losses from US$20.2 million in FY2019 to US$4.8 million. This was partly offset by the discontinuation of the Reserve Bank of Zimbabwe export incentive scheme in February 2019 resulting in other income decreasing by US$45.8 million compared to the prior year.

The Company paid the final instalment of US$42.5 million on the Revolving Credit Facility with Standard Bank of South Africa. In addition, the Group generated enough cash to pay dividends amounting to US$45 million.

The Mupani Mine development project, (replacement for Rukodzi and Ngwarati mines), progressed well during the year and is on schedule. The project is expected to be completed on time and within the approved budget.

The Bimha Mine redevelopment project is substantially complete save for the underground workshops whose progress was affected by the COVID-19 pandemic. The company expect to commission the workshops in the first half of FY2021.

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