Mining Group RioZim is seeking to raise $10 million through a rights offer to reopen the Cam and Motoring gold mine near Kadoma, a cash cow until it was shut down nearly 50 years ago and key to the group’s revival.
RioZim had expected to reopen the historic mine, a world class operation when it was shut down in 1968 having produced 150 tonnes in its entire life, in the second half of 2014 with a projected production of 4 000 ounces per month.
It carried out trial mining of waste from the Motor site with underwhelming results and sought to set up new operations on the old mine’s ore bodies, with a new plant being designed and manufactured in China.
“The directors have proposed the raising of $10 000 000 by way of a rights offer to shareholders to fund the Cam and Motor Gold Mining Project which is of strategic importance to RioZim’s objective of stabilising cash flow,” said company in a statement today.
“The Cam and Motor Gold Mining Project is one of the key projects that are expected to get the group turnaround the strategy back on track.”
Cash from the rights offer will be used to buy equipment worth three million United States dollars which at full capacity will produce more than 3000 oz of gold per month.
Shareholders are expected to vote on the proposed rights issue at an extra general meeting on February 19.
GEM RioZim Investment, which holds 24.97 percent stake in RioZim will underwrite the transaction. The investor also injected $700 thousand to start-up the project while the rights offer process is underway.
Although Cam and Motor was an underground operation, its second life will be as an open cast mine.-The Source
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