Treasure trove (Part 2): Pennine pursues southern Africa’s promise

Zimbabwe: Underdeveloped gold potential, and a ‘safe investment destination’

CALGARY, Canada (Nov. 26, 2021) — Zimbabwe’s top minerals include gold, platinum, chrome, coal, diamonds, and lithium. And, for mining interests, Zimbabwe is “open for business.”

Never was that clearer than during a virtual conference on March 1, 2021 when the country’s Minister of Mines, Winston Chitando, took questions from Zimbabwe’s Mines and Mining Development Portfolio Committee as well as from the general public.

“Seeing and hearing the Minister responding to questions not only from the committee but the public was an iconic development that was long overdue,” enthused Mining Zimbabwe magazine.

“The Minister we saw . . . is ‘the Minister the country has been missing.’ Miners love that Minister, miners need that Minister, we loved that Minister and we believe the country deserves such dedication from the Minister. Zvisaperera ipapo!! (It doesn’t end there!)”

Mining activities in Zimbabwe were depressed in 2020 compared to 2019, largely as a result of COVID 19-induced lockdowns, both domestically and globally. Exports of gold, Zimbabwe’s top mineral export, fell from US$1.64 billion in 2019 to US$981 million in 2020.

In addition to COVID-19, the Reserve Bank of Zimbabwe attributed the overall poor gold production to smuggling, fuel shortages, and antiquated technology. Fidelity Printers and Refiners (FPR), the official government buyer, announced in mid-2021 that it will combat these underlying issues by allowing large-scale gold mining companies to export a portion of their bullion directly.

FPR expects this measure to increase production by allowing companies to secure funding in the form of gold loans. FPR also hopes that direct payments will help prevent the illegal export of gold, estimated at US$1.2 billion per year, by small-scale miners who extract most of the country’s gold.

Pennine, under new CEO Jon Harris, announced in February that the company would begin a thorough investigation of mining opportunities in southern Africa.

“We believe that Zimbabwe has tremendous potential for gold production. Despite their potential, for a variety of reasons, up until now most of the known gold deposits remain largely underdeveloped,” says Harris, who has extensive experience in early-stage mining projects in southern Africa, particularly in gold, nickel and bauxite exploration and development.

“Our initial objective is to earn-in to a producing gold mine in Zimbabwe through an opportunity I’ve identified, through my background and contacts. Given Zimbabwe’s favourable investment climate for mining interests, we see great opportunity for Pennine’s future prosperity.”

Caledonia Mining Corporation Plc (NYSE and LON) has announced that it would increase production in its Blanket Mine by 37% in 2022—a development that could yield an annual total of 80,000 ounces, and would make it Zimbabwe’s top-producing gold mine.

Zimbabwe president Emmerson Mnangagwa envisions a US$12-billion mining sector economy in his country by 2023 to help the country “attain an upper-middle income earner position by 2030,” reports Mining Zimbabwe. The Caledonia announcement represents “a milestone achievement towards our (US$12-billion) quest,” said Zimbabwe’s President. “Furthermore, it is indicative of the Caledonia Mining Corporation’s explicit interest to invest in our economy, affirming that Zimbabwe is a safe investment destination.”

Caledonia has since announced the acquisition of the Maligreen project in the Gweru mining district, from Pan African Mining (Private) Ltd, a privately owned Zimbabwean company, for US$4 million in cash. The project is estimated to contain a NI 43-101 compliant inferred mineral resource of about 940,000 ounces of gold as of end August 2021, said Caledonia Mining.

“We are delighted to enter into this agreement to purchase the claims over Maligreen, one of the more significant exploration opportunities in Zimbabwe,” said Steve Curtis, chief executive of Caledonia Mining. “This transaction is an important next step as Caledonia pursues its strategy to become a multi-asset gold producer in Zimbabwe, one of the last gold frontiers in Africa.”

TSX-listed B2Gold Corp., the Vancouver-based company that owns mines in Africa and the Philippines, is once again interested in acquiring gold assets in Zimbabwe. In a Nov. 24 interview, CEO Clive Johnson stated: “There is really a strong case and we are making that case in Zimbabwe. We are looking at it as intriguing potential with some advanced projects as well as exploration potential.” He went on to say: “It’s an interesting area for us geologically and that’s what we are looking for in the world.”

Given the interest in Zimbabwe by the likes of Caledonia Mining and B2Gold, Pennine will be in good company when it implements its current strategy of investigating mining opportunities in the region.