Gold miner Mwana Africa's Zimbabwe mine output has risen to a monthly average of 4,500 ounces, outstripping its targeted annual production rate, company executives said on Friday.
The AIM-listed firm's Freda Rebecca mine, 85 kilometres northeast of Harare, produced 27,240 ounces of gold in the financial year to March 2011, company figures show.
We are currently producing at a rate of 4,500 ounces per month, which exceeds our phase two target of 50,000 ounces, Freda Rebecca General Manager Toindepi Muganyi said during a tour of the mine.
We have operated at 100,000 ounces per year before and we can still get back to those production levels.
The mine produced 112,164 ounces in 2000, before an economic meltdown critics say was triggered by President Robert Mugabe's seizure of white-owned farms.
Freda Rebecca suspended mining operations in 2007 at the height of a political and economic crisis, but resumed production in 2009 after a coalition government set up by Mugabe and Prime Minister Morgan Tsvangirai adopted the use of foreign currencies and allowed firms to sell their gold and keep all the proceeds.
Speaking during the tour, mine manager Eliakem Hove said Freda Rebecca now had its sights set on ramping up production to 70,000 ounces per year, subject to board approvals and the availability of capital.
There are plans to increase production to 70,000 ounces, taking advantage of the higher gold price and the current liberalised environment, Hove said, adding the mine was working on reducing costs from the current $681 per ounce to around $650 per ounce in order to maximise profitability.
We don't expect the (gold) price to come down below $1,200. Experts are predicting the rally will stay for at least another year.
Hove said Freda Rebecca and other mines had struck a deal with state power utility ZESA to directly import electricity from Mozambique, easing outages that had affected production in previous years.
Mwana Africa was in talks with the Zimbabwe government over its empowerment laws, which seek to transfer majority shareholding in foreign-owned mines to local blacks, Muganyi said.
Zimbabwe's Empowerment Minister Saviour Kasukuwere had given miners up to September 30 to comply with the law and had threatened to cancel several firms' licences. However, Harare has taken a softer tone over the last few days about the policy.
Mines Minister Obert Mpofu told a mining conference this week no licences would be withdrawn, while Kasukuwere indicated the government was willing to be flexible in implementing the law.