B2Gold of Canada is considering 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, people familiar with the situation said.
If a transaction with owner Metallon is concluded, B2Gold will invest $150m to $200m developing the Shamva gold mine, one of the people said. The Vancouver-based company will pay about a third of the book value for the mine, which was last assessed at about $167m 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.