Padenga expecting gold boost

Padenga Holdings is expecting gold production at its Dallaglio mines to increase by 45 percent over what was achieved in the 2020 financial year.

Padenga diversified into gold mining last year following the successful acquisition of a 50,01 percent shareholding in Dallaglio Investments (Private) Limited.

Dallaglio is made up of Pickstone Peerless mine and Eureka mine.

The expected outturn is in spite of a first quarter slump in sales and production for the period to March 31, 2021.

Dallaglio’s sales volume for the quarter decreased by 24 percent to 138 kgs from 183 kgs achieved same period in 2020.

This decrease in volume was mainly attributable to flooding following excessive rainfall which negatively impacted the open pit mining activities at Pickstone.

Fellow miner, Blanket Mine, also faced similar challenges and recorded a slump in production.

However, going forward, Padenga is expecting increased production output and sales.

“Total gold production is projected to increase by 45 percent over FY20 levels,” the company said in a trading update.

Padenga is also planning to ramp up production so that it can enjoy the incremental incentives announced by Government last week.

Gold miners across the country are now set to retain 80 percent of their export proceeds for the incremental portion of gold deliveries to Fidelity Printers and Refiners.

Padenga is also expecting gold spot price to remain elevated in 2021 given the continued uncertainty of the Covid-19 pandemic on the global economy.

Surging inflation in the United States will also add fuel to the fire.

During the period under review, the average spot price of gold firmed 12 percent to US$1,743 per ounce.

“This investment will continue to yield positive returns for the foreseeable future,” Padenga reckons.-ebusinessweekly.co.zw