Canada’s B2Gold in talks to buy idle Zimbabwean gold mine

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B2Gold, a Canadian public gold-mining company based in Vancouver, British Columbia, will consider buying an idled Zimbabwean gold mine, if it can be exempted from a law that requires producers to sell all the metal to the country’s central bank.

Securing an exemption may open the way for further investment by gold producers in the country, where a number of companies have closed mines because of the sales requirements and Zimbabwe’s economic crisis.

An anonymous source said if a transaction with owner Metallon is concluded, B2Gold will invest $150 million to $200 million developing the Shamva gold mine.

The Vancouver-based company will pay about a third of the book value for the mine, which was last assessed at about $167 million seven years ago.

The purchase would be an unusual investment in Zimbabwe’s struggling gold sector, with the two biggest producers, Metallon and RioZim, suing the central bank over its payment arrangements.

By law, gold miners in the country must sell their gold to a unit of the central bank, which then pays them back partly in dollars and partly in a local quasi-currency that cannot be traded outside Zimbabwe. Both companies have sued the central bank over the currency they are remunerated in and over late payments.

A large portion of Zimbabwe’s gold is produced by artisanal miners and much of it is smuggled out the country. The country is in the midst of an economic crisis with shortages of fuel, medicine and foreign currency being commonplace.

B2Gold officials have visited Zimbabwe several times in a bid to conclude the sale.

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