Guyana Gold in proposed JV in Zimbabwe

The government of Zimbabwe has approved a proposed joint venture concerning the Sabi gold mine.

Guyana Gold (VSE), along with a private Zimbabwe firm, can acquire a 55% interest in the joint venture for a purchase price of US$9 million. The remaining 45% would be held by Zimbabwe Mining Development Corp. (ZMDC), the state mining company. (Guyana Gold’s actual interest works out to 51%.) The joint venture is committed to upgrading production to 20,000 from 7,000 tonnes of ore per month over a 2-year period, at a projected cost of US$12 million.

The cost of participating in the upgrading is proportionate to the interest held by the different parties. Guyana Gold can increase its interest in the venture to as much as 85% if ZMDC elects not to fund its proportionate share and Guyana Gold is required to provide the additional funding. The property is 14 km south of the city of Zvishavane in the south-central portion of the country. The deposit hosts proven, probable and possible reserves at 218,224 tonnes grading 4.78 grams gold per tonne, and drill-indicated reserves of 5.5 million tonnes grading 5.69 grams. Gold mineralization is hosted in parallel-to-sub-parallel, en echelon, quartz-vein bodies within a shear zone measuring 50 to 150 metres wide.

Guyana Gold believes there is potential for increasing reserves and delineating new orebodies along strike.

A carbon-in-pulp processing plant treats 7,500 tonnes per month to produce about 965 oz., which is equivalent to yearly production of 11,580 oz. The joint-venture agreement is subject to final documentation, regulatory approval and financing arrangements. Guyana Gold has working capital of $4.5 million and 13.6 million shares outstanding.