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Tinashe Makichi Harare Bureau
Gwanda-based gold miner Duration Gold will introduce strict cost cutting measures to improve efficiencies to counter the fluctuation of gold prices on the international market.
The move comes after the company expressed intentions to raise $10 million from international financiers to increase production at the mine and achieve economies of scale.London-based Clarity Capital holds a majority stake in the Duration group while the remaining stake is in the hands of Zimbabwean mining families the Muirs and the Thompsons.
In an interview with our Harare Bureau Duration Gold spokesperson Ollie Iversen confirmed the development.
“Despite the difficult operating environment in particular the low gold price, as well as scarcity of direct investment, the company continues to perform well under the circumstances. Duration Gold has reacted to these situations by cutting costs and improving efficiencies and this has had a positive impact on the performance,” said Iversen.
At present, Duration Gold has resources and reserves of one million ounces and produces from 1,200 to 2,000 ounces of gold per month. The gold mine’s production and profitability varies widely depending mostly on power availability which has averaged only 60 percent in 2010.
The gold mine has an excellent capacity utilisation but the issue of fresh capital injection remains a challenge.
Duration is a small mine by world standards and hence a significant capital investment of about $10 million is required to increase production in order to achieve economies of scale.
The mining concern has two projects at an exploration stage that require capital to the tune of $5 million.
Iversen said despite the fall of gold prices that has forced many gold mines to close, Duration gold mine is still striving to make profits and improve its capacity utilisation as well as payment of its employees.
The Youth, Indigenisation and Empowerment Ministry at one time threatened to act against Duration Gold, blaming the mining firm for failing to comply with the country’s equity laws.
However, Iversen said the company had lodged an indigenisation plan which is compliant with the law and is looking forward to discussing its empowerment initiatives with the ministry.
Online Reporter