Meikles plans $100m chrome mining investment

HARARE - Meikles Limited (Meikles)’ mining subsidiary Meikles Centar Mining (MCM) plans to invest $100 million in a chrome mining venture.

This comes as MCM has acquired a 75 percent stake in an undisclosed company that owns chrome claims on the Great Dyke.

The group’s chairman John Moxon said exploration on the chrome claims had already been carried out.

“Proposals have been submitted to the Ministry of Mines related to a significant chrome related project,” he said.

He said a smelter would also be constructed to beneficiate both lumpy and alluvial ore, adding that the group is also set to acquire stakes in Matebeleland-based gold producers.

“MCM is currently in the process of acquiring a 51 percent shareholding in a group of gold mines in Matebeleland for a consideration of $3 million,” Moxon said.

“We await regulatory approval for the transaction to be concluded,” he said.

Meanwhile, the group posted a $37 million profit in the year to March 2014, up from $6,5 million recorded in prior comparative period.

During the period under review, revenue went up 1,8 percent to $384 million from $391 million, but  the increase was lower than prior year’s due to poor performance by the group’s retail and agricultural subsidiaries.

Operating costs increased by 1,7 percent ahead of those incurred prior year, with finance costs surging to $10,4 million from $7 million.

Borrowings increased to fund the group’s expansion and refurbishment in the supermarkets, hotel refurbishments and plantation development.

Non-trading income for the group increased from $9,7 million to $48,8 million. Basic earnings per share rose to 13,56c from 0,75c prior year.

The set of results presented by the group are, however, unaudited, but sanctioned by the Zimbabwe Stock Exchange, due to funds being held on deposit at the central bank.

“Intense negotiations with the ministry of finance are in progress with the intention to facilitate access to these funds by the end of July 2014. All parties to the discussions believe that this timetable is realistic,” Moxon said.

The group is owed $87,2 million by the Reserve Bank of Zimbabwe (RBZ).

The debt has accrued interest amounting to about $27 million since the economy was formally dollarised in February 2009.

The debt originated from deposits made to RBZ following Meikles listing on both the local bourse and the London Stock Exchange in 1996 and the raising of funds from a number of substantial investors for the benefit of the company

Moxon warned the resolution of this matter would influence the audited results, in terms of the composition of the balance sheet and in the disclosure of post balance sheet events.

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