Power crisis weighs heavily on Dallaglio

Dallaglio Investments says it has not been spared by current power shortages resulting in backup power from generators which has increased cost of production.

The company, majority owned by Victoria Falls Stock Exchange (VFEX) listed Padenga Holdings, has its main assets Eureka Mine and Pickstone Peerless Mine. Other assets not in production include Giant Gold mining claims and Blue Rock claims.

Marc Nicole, the group chief executive, told Business Weekly on the sidelines of a tour of Pickstone Mine that production at high costs would require good grades in the region of 3,5 to 5 grammes per tonne.

“We are also facing power outages therefore we are going to increase our back up power from generators with a long term view of setting up a 10 MW solar power plant,” he said.

However, he noted that the company does not have the financial capacity to undertake the solar project at the moment.

Nicole said the company is seized with the US$18 million underground mining project, which is set to replace open pit mining whose life approaches its end early next year.

He said of the project cost, US$15 million was raised offshore with US$3 million coming from internal cash flows and the major shareholder.

“Extensive shaft and surface infrastructure project being undertaken to reopen the existing underground mine has progressed well and commissioning is set for April 2023.

“The indicative underground grades are at 3,0 to 5,0 grams per tonnes compared to open pit grades of 1,5 to 1,8 grammes per tonne,” he said.

Nicole said when the company’s Pickstone underground mine comes into full production, overall group output will increase to 200Kgs per month from the 160 kgs per month.

Following investment by Dallaglio into Pickstone in 2014, the mine has produced 4,154 kgs of gold.

During the period 2015 to 2018, Nicole said US$14 million was invested to develop the processing plant and subsequently upgrading capacity.

As at September 30, 2022, Pickstone had underlying claims of a total measured and indicative resource of 527 000 ounces (16 tonnes) and a total resource including inferred resources of 908 000 ounces (28 tonnes).

Pickstone general manager Alfred Madowe said the mine’s underground project will boost output from the current 40 to 50 kg per month to 80 kgs per month.

He said the mine’s medium term is to develop an open pit mining operation on the Giant claims and the feasibility assessment is underway and exploration drilling has already been conducted.

“There is an indicative grade of 2,3 g/t and strip ratio of 7:1. Other midterm projects include the heap leach and ore sorting,” he said.

Madowe said in the long term, the company is investigating assessment of underground mining potential at Eureka mine.

He said assessment of the company’s Blue Rock claims near Chegutu will also be conducted in the long term.

“Geology reports indicate that they could contain 754 000 ounces (23,450 kg) of indicated and inferred resources,” Madowe said.

Meanwhile, in the period to September 30, 2022, Dallaglio’s gold sales volumes surged 195 percent to 1 480 kgs compared to 501 kgs during the same period prior year.-ebusinessweekly