Prospect chases Zimbabwe gold

At a time when most miners and explorers are becoming more risk averse, Perth minnow Prospect Resources is venturing into Zimbabwe.

Harry Greaves is relatively unusual for a white Zimbabwean, having stayed in the country through all of the political and economic troubles of the past 20 years and now encouraging new investments there.

“Zim is starting to turn, it’s a very noticeable shift,” Mr Greaves told Business News.

Mr Greaves’ unusual perspective was highlighted on a recent trip to Perth. For starters, he was constantly bumping into Zimbabwean migrants who have settled here, and then he had to explain why he wanted to invest in their home country.

He acknowledged there are many issues to be addressed in Zimbabwe but said the adoption of the US dollar as the currency of choice was a big positive.

A boom in the building industry was, he believed, a clear signal that people in Zimbabwe had more confidence in the country’s recovery.

Mr Greaves also highlighted the positive approach of professional young bureaucrats, saying the improvements justified cautious new investment.

“A lot of it is first-mover advantage,” he said.

“The companies that did well in Zambia and the DRC were the ones that got in early.”

Subiaco company Prospect Resources has partnered with Mr Greaves as it seeks to build a gold mining business in Zimbabwe.

Managing director Hugh Warner said the partnership was an opportunity to pick up good priced assets and develop them when no-one else was there.

Prospect is drawing on Mr Greaves’ experience with Farvic Consolidated Mines, a private company that has brought three small gold mines in southern Zimbabwe into production in the past 10 years, with annual production currently in the order of 10,000 ounces.

Farvic has also been certified as a Zimbabwean indigenous company, and will hold a 30 per cent stake in Prospect’s mining projects, with the right to lift its stake to 51 per cent.

Mining history

At its peak in 1935, Zimbabwe had 262 operating mines. However only a handful of big mines are now operating, with the main operators including Impala Platinum, Anglo American Platinum, Aquarius Platinum and Rio Tinto’s Murowa diamond mine.

Mr Warner said the lack of drilling and exploration created an opportunity for Prospect.

“The fact it has been geographically quarantined for 50 years gives us a big advantage,” Mr Warner said.

The areas Prospect is exploring, at the Prestwood and Bushtick projects, are located underneath historic mines.

Mr Warner said a six-hole drill program at Prestwood had confirmed that the mineralised reef extended below the historic gold workings.

He said development of its tenements would be made easier by the proximity to operating toll treatment plants and an experienced mining workforce.

Prospect has raised $2.7 million over the past year, most recently completing a $1 million placement in May at 1.5 cents per share.

Most of the funds have come from ‘family offices’ in Africa and Europe.

“They want to build an Africa-focused mining company,” Mr Greaves said of the investors.

Prospect is continuing to pursue legal action against a Singapore consortium, including Blumont Group, which agreed last year to invest $3.9 million but pulled out after claiming the conditions precedent had not been fulfilled.

Prospect’s volatile share price closed at 0.4 cents last week.