Pambili angles to become major gold producer in Zimbabwe

Pambili Natural Resources Corporation, has announced a strategic decision to focus on Zimbabwe’s gold mining sector where it eyes to be a significant producer of the yellow metal.

The Canada headquartered firm has diverted from its legacy oil and gas operations in North America to concentrate on expanding its gold assets in Zimbabwe, where it currently owns the Golden Valley project in Matabeleland region.

Pambili said in a statement that its legacy oil assets in Canada — the Chinook oil wells, pipelines and surface leases and the related Asset Abandonment and Retirement Obligation (ORA) liability for CAD150 000 (equivalent to US$108 000), have been bought by Chauvin Energy Inc.

Pambili chief executive officer, Jon Harris said: “The divestiture of the Chinook wells is significant because it crystallises the ARO as a reduced and defined obligation to Chauvin.

“Pambili’s objective is to become a significant gold producer in Zimbabwe. We will achieve this by acquiring a portfolio of producing and near-producing gold assets and increasing low-cost gold production by implementing modern mining and processing technologies.”

The Chinook wells were shut down at the end of March 2020 as a result of low natural gas prices at the time resulting from the effects of the Covid-19 pandemic, along with increased operational costs.

Since then, Pambili has been carrying an estimated ARO of CAD231 500 (equivalent to US$166,760) on Chinook.

“Removing legacy oil and gas obligations from our operations enables us to direct our financial and management resources toward meeting our company goals in Zimbabwe,” said Harris.

Recently, the Toronto Stock Exchange-listed natural resources exploration and development firm announced that it had brought the gold production plant at Golden Valley Mine back on line.

In November last year, Pambili entered into a share purchase agreement to acquire the Golden Valley project from White Satin Investments (Privvincate) Limited, signifying a critical moment in the firm’s growth plan.

Pambili has also entered into a strategic partnership with the Southern Africa-focused metals and exploration firm, Kavango Resources plc which is listed on the London Stock Exchange to revive operations at Golden Valley.

The mining industry is among Zimbabwe’s major economic centerpieces accounting for over 75 percent of the national export earnings while gold is the country’s largest single export expected to contribute US$4 billion going forward into next year from about US$2,7 billion in 2018.

Currently, the gold sub-sector accounts for nearly US$3 billion.

In 2022, Zimbabwe produced a record 35,3 tonnes of the precious metal while output last year plummeted to 30,1 tonnes due to operational challenges small-scale miners faced power constraints, among other hurdles.

The Government has committed to address the headwinds facing the mining sector from which a gold target of 35 tonnes has been set this year.

For instance, the authorities recently reversed the 15 percent Value Added Tax (VAT) on gold deliveries.

The tax was scrapped through Statutory Instrument (SI) 105 of 2024 following a stakeholder engagement between the Government and players in the mining industry in July.

Against this background, official data from the country’s exclusive buyer of the yellow metal, Fidelity Gold Refinery (FGR) — Zimbabwe’s gold output rose by 33 percent to 10,3 tonnes in the third quarter ended September 30, 2024 compared to 7,7 tonnes in the second quarter of the year.

In the first nine months of the year, the country’s gold deliveries improved by 7,2 percent to 24,1 tonnes from 22,4 tonnes in the corresponding period last year.-ebsinessweekl