Tawanda Karombo (Harare) – Australian listed Information Technology (IT) concern, Cape Range has revealed plans to acquire an equity stake in Ox Mining, a Zimbabwean gold mining company that owns the Inez gold mine and other gold properties in Kadoma.
Cape Range will exercise its option to acquire a 90 percent equity interest in Ox Mining and whose Inez gold mine is currently “producing gold from the surface sands and supergene/saprolite zone, down to a depth of about 12 metres”. The mine had its first full production in July and produced over 400 ounces of the precious resource.
Ox Mining said about 400,000 tones of ore had been mind from underground operations at an average grade of approximately 12g per tone. The company added that it was mining the top sands and the saprolite zone, and that it intended to continue with this model for the next financial year.
Cape Range revealed this week that it was hoping to target the deeper high-grade gold zones which indicate very high-grade potential for the mineralization to continue at depth.
“A hole drilled by Rio Tinto located approximately 300 metres east of the main Inez Mine, returned a high value of 21.46 g/t gold over 2.79 metres, from a down hole depth of 48.45 metres,” said managing director, Joe Cornelius.
“Drilling has been carried out by previous exploration parties over OXM’s ground holdings and some of the intercepts have been very encouraging,” he added.
Cape Range will acquire the first 10 percent equity in OXM by payment of US $1.5m in cash over six months while upon completion of due diligence, the company will weigh its options to snap a further 41 percent equity stake in the Zimbabwean gold mine. The acquisition, said Cape Range, will be undertaken by “payment of US $2m in cash and US $6m equivalent” in shares of Cape Range.
A statement on Monday indicated that Cape Range had upto six months to complete its due diligence, where necessary and that it was looking at spending up to US $2m in underground development costs at the Inez Mine.
The statement further states that Cape Range “can elect to acquire a further 39 percent in Ox Mining by payment of US $15 per ounce in the JORC resource category”.
Several Zimbabwean gold mines have been hit by incessant and unplanned power outages which have dented production figures for the country’s gold mining sector.
However, mining firms are resorting to high voltage generators to power their operations while others have signed up to a deal to import power directly from a Mozambican company.
The Inez mine – which is in close proximity to Zimbabwe Platinum Holdings (Zimplats) power grid – has a back-up generator. Cornelius said through due diligence that the company had carried out on the mine, it had been “discovered that a massive potential exist for further discovery of high-grade gold mineralized zones” at the mine.
And as part of its planned compliance with the controversial indigenization law in Zimbabwe, the Australian listed Cape Range said it intends to employ local skilled workers while “all beneficiation and mining activities will be carried out within” Zimbabwe. In addition to this, the company is also eyeing a listing on the Zimbabwe Stock Exchange (ZSE).
The country’s gold mining sector has all but glittered during this year, following years of slowed down operations and care and maintenance strategies by companies hard hit by a tough operational environment that was epitomized by rampant hyper-inflation.