B2Gold Corp. is in talks to purchase the inactive Shamva gold mine in Zimbabwe from South Africa's Metallon Corp. Ltd., Bloomberg News reported May 23, citing unnamed sources.
However, the deal can only go through if the Canadian miner secures an exemption from a law requiring miners to sell their output to Zimbabwe's central bank.
B2Gold will reportedly pay one third of the mine's book value, which was estimated seven years ago at about US$167 million. The Vancouver, British Columbia-based company will then spend a further US$150 million to US$200 million to develop the mine.
Spokeswomen for both companies declined to comment, the publication noted.
Metallon recently served a legal notice to the Reserve Bank of Zimbabwe and its unit Fidelity Printers and Refiners Ltd. claiming that it was owed US$132 million for lack of payment for gold produced.
The company said it lost US$82 million between 2016 and this year, and is demanding US$132 million for the lack of profit and procurement, including interest.
In mid-April, Metallon's Mazowe, Shamva and Redwing mines were shut down and according to a report, about 1,400 workers at the company's Zimbabwean mines are owed US$40 million in salaries, benefits and unremitted pensions.