PROJECT PROPOSAL

ON

GOLD MINING

Submitted By:

Ushe Anthony

Cell:

E-mail:

Date: April 2018

1.0) Executive Summary

2.0) Copper Mining Operations

3.0) Copper Market

4.0) Competition

5.0) Financial Statements

6.0) Repayment of Loan

7.0 Conclusion
1.0 EXECUTIVE SUMMARY

1.1 Background and Purpose

The purpose of this proposal is to enter into a partnership with NSSA to enable the acquisition and
hiring of mining equipment, so that we would be able to join the mining fraternity as a small-scale
miner and contribute to wealth and employment creation as well as foreign currency generation. The
facility shall see the jump-starting of the mining operations which should become self-sustaining in
approximately two months time.

1.2 Market Analysis and Plan

The critical activity in gold mining is to acquire the metal for the demand is already very high so that
there is no need to worry about the gold price or the marketing side of the product. All the gold
produced is to be sold to Fidelity Printers and Refinery at a price determined by the refinery. The
refinery is a subsidiary of the Reserve Bank of Zimbabwe. The current price of gold at the market is
USD$45/g but we have been prudent in forecasting it in our cash flow where we have used a low
price of USD$40/g.

1.3 Sales Forecasts

We have forecasted annual sales of approximately $2 529 000 in the 1st year. Monthly sales will grow
by an average of 5% and reaches a peak tonnage of approximately 306t. Therefore sales growth is a
function of tonnage of ore excavated. Year on year inflation will be 5%.

1.4 Expertise of Management

We have planned to engage a mining engineer on consultation basis, with background knowledge in
gold mining and having at least 5 years experience. We also intend to consult geologists who will be
working hand in hand with the mining engineer in exploring the direction and existence of the ore in
the soil. The business advisor has an ACCA qualification and has 10 years experience in business
management. We intend to employ qualified expertise like secretary and accountant for book-keeping
and accounting. Initially we will outsource.

1.5 Strategic Direction

Initially, in the first year the director s (owner) shall be fully involved in the day-to-day running of the
mine and from the 2nd year onwards, ownership will be separated from management.

1.6 Developmental Plan

We intent to acquire mining equipment for the extraction of the gold ore, transportation, processing
and infrastructural development of the mine. We will also do cynaedation and elutions process. Some
of the mining equipment will be hired out and also cynaedation and elution process. Future plans
include the sinking and construction of a mine shaft and a gold processing plant, construction of roads
and of houses for workers and development of the mining community that will have emerged. The 3
year cash flow statement shows a healthy cash surplus to implement these developmental goals.
2.0 INTRODUCTION TO GOLD MINING OPERATIONS

2.1 Mine Development:

Initially several pits shall be opened and developed in which a series of stepped bunches are dug
deeper and deeper into the earth over time. Crushers shall be established near the pits as well
as millers for further processing of Copper Sulphide. To facilitate the heap leaching process an
impenetrable shall be constructed.

2.2 Copper Production:

An analysis has been made that, using the proposed labor and machinery an approximate of 250
tonnes per day will be excavated/mined giving a total output of 900000tonnes per year.

2.3 Mineral Processing:

After mining and transportation the two types of ores are further processed as follows:

Copper Oxide Ore

-To extract copper from copper oxide, oxide ore is generally processed using Hydrometallurgy. The
process uses aqueous solutions at ordinary temperatures, usually in three steps that is HEAP
LEACHING, SOLVENT EXTRACTION and ELECTROWINNING.

Heap leaching- is a process of using percolating chemical solutions to leach out metals. Heap
leaching is a process very commonly used for low grade ore, which would be otherwise not be
economical to send through a milling process.

Solvent Extraction-Used to separate two un-mixing liquids.

Electrowinning- Requires an anode which acts as an electrolyte and a cathode through which copper
ions will be plated to get pure copper.
Copper Sulphide:

Sulphide ores are generally processed using pyrometallurgy which is the extraction and purification of
metals by process involving the application of heat. This process uses a series of physical steps and
high temperatures to extract and purify copper from copper sulphide ore in four basic steps i.e:

1. Froth Flotation-Used to separate copper minerals from gangue using chemical reagents
called collectors. Pipes are needed to blow air into the bottom of the tank to create bubbles
which then rise to surface.

2. Thickening – The froth is poured into large tanks called thickeners. The bubbles break and
solids from the froth solution will settle at the bottom of the thickener. The solids are then
filtered to remove excess water, which can be reused in processing additional batches of
sulfide ore.

3. Smelting- At the smelter high temperatures are used tofurther purify the ore in a series
of smelting steps

4. Electrolysis

2.4 Planned Output:

When the gold has been sent for processing at the nearest processing plant, it is anticipated that
approximately 60% of free gold will be recovered using concentrators with copper plates. With an
average assay of 8 grams per tonne it is expected that only 4.8 grams per tonne of free gold is
recoverable per tonne of ore milled. Therefore it can safely be estimated that about 216 grams of gold
can be produced in 20 hours of continuous milling. Thus about 0.3 kilograms of gold is produced per
week and 1.3 kilograms of gold is produced per month. Using the current gold price of US$40/g, this
is tantamount to US$52 000.

2.5 Manpower Requirements:

The services of a geologist and mining engineer shall be required initially on a part-time basis and on
a full-time basis as the mining and explorations intensify and become more complex. We also
anticipate starting with one individual in Management, 3 Supervisors, 3 Technical Staff and 15
workers as General Labour. As time goes and as the work intensifies, we intend to employ 5
individuals in the Technical Staff, increase Management to 2 and the General Labour to 20.

2.6 Use of Chemicals in Copper Recovering and Processing:

The most used chemical in the process is dilute sulphuric Acid.

A major attraction for copper mining in Zimbabwe is the fact that there is a ready and accessible
market. According to the research, 50% of the world produced copper is bought by China and there
are some markets also like LME (London Metal Exchange) which are also into Copper trade.

4. COMPETITION

Currently, multi-national and international companies have dominated the production of copper in the
country. Recent events have shown that small-scale producers hold the key for the growth of the
mining sector in general and in copper production in particular. There is stiff competition in access
and ownership of mining concessions in areas that are productive and readily accessible. Multi-
nationals, through exclusive prospecting orders, control most of the land rich in mineral deposits thus
making it difficult for small scale miners, who are largely indigenous people, to penetrate this sector.
This situation needs to be reviewed and corrective measures taken to ensure that small scale miners,
especially indigenous ones, have access to control over and ownership of mineral resources in
Zimbabwe. This is more so now that they produce as much copper as the large scale producers. We
sincerely welcome the black empowerment initiative being undertaken by the Ministry.

Furthermore, most copper miners are located Mhangura since it is one of the areas with high
concentration in copper production however most companies have targeted the local market which
gives the opportunity to penetrate into the market as we will be targeting international markets.

4.1 SWOT ANALYSIS

Strengths

1. Business management and technical expertise for the successful implementation of the project
2. The product is readily marketable
3. Most miners have their focus on gold mining.
4. Machinery can be easily sourced, both for hire and for purchasing
5. No employment challenges as unemployment rate is very high
6. Materials like explosives, drilling equipment are readily available on the market
7. Hierarchical/organogram structure can easily be established for communication purposes,
discharging responsibilities and protocol

Weaknesses

1. Lack of capital to implement the owner’s brainchild business idea

Opportunities

1. There is a surge in the price of gold on the world market. Currently there is an upward trend
in gold price which is currently pegged at US$44/g of gold.
 2. Copper is one of the most precious minerals which determines the performance of the
Zimbabwean economy.
3. There is an open door for black empowerment especially in the mining sector for one to
acquire and own mining claims
4. Employment creation
5. Infrastructural development for the surrounding and emerging community

Threats

1. Stiff competition in access and ownership of mining concessions in area of Mhangura.

5. FINANCIAL STATEMENTS AND REPORTS:

These are attached as an excel document.

6. RETURN ON INVESTMENT

Return on investment would be as follows:

Since we are not partnering with any organization all the retained income will be for the company.

7. CONCLUSION:

The project proposal seeks to enter into the extraction and purification of copper so as to expand the
copper mining operations in the country. Its financial requirements are modest and if provided will
contribute to wealth and employment creation, foreign currency generation and emergency of
enhanced participation of women in mining, a sector that is dominated by men.