MINUTES OF THE MEETING ON PROPORSED NON-CHROME MINERAL

EXPLOITATION STRATEGY DELIBERATIONS HELD AT ZIMASCO SHURUGWI

CENTRAL OFFICES BOARDROOM ON 4/03/2020 @ 1000Hrs

1.0 PRESENT:
R MATSHIYA (RM) GENERAL MANAGER-TECHNICAL (CHAIRING)
P. MUSARANDEGA (PM) GENERAL MANAGER (MINING)
F. MAKWARA (FM) MINING SERVICES MANAGER
T. CHISARE (TC) SOUTH DYKE MANAGER
M. CHIGUWARE (MC) MINE PLANNING MANAGER
C. MPALA (CM) SECURITY MANAGER
J CHINHERENDE (JC) LEGAL ADVISOR
N. MPOFU (NM) HEAD FINANCIAL PLANNING AND ANALYSIS
N. NYANDORO (NN) GT –MINING ENGINEER (MINUTING)

ITEM ITEM DISCUSSED ACTION DATE

BY
No.

2.0 OPENING REMARKS

 The GM (Mining) welcomed everyone present and laid out the background on the strategy for
the gold mining in the ZIMASCO claims and the occurrence of other non-chrome minerals
2.1 within our claims. He reiterated the need to maximise revenues in order to augment cash
flows in light of current depressed chrome prices on the market. PM For
 The GM Mining further alluded that an executive level team headed by Mr Matshiya for the noting
steering the non-chrome mining initiatives project. A divisional team has been set up to the
same effect with Mr Musarandega as the team leader.

PRESENTATION
 The Mining Services Manager began by giving a brief background on the occurrence and
discovery of the non-chrome minerals. The plans containing the claims with the non-chrome FM
2.2 minerals were presented to the team for appreciation. For
The non-chrome minerals found in Chromite registered Zimasco claim blocks are: noting
I. Gold in Shurugwi and Valley
II. Red oxide in Shurugwi used (for paints and pharmaceuticals manufacture)
III. Mutorolite in Mutorashanga(used for ornamental purposes in the Eastern world)
The Mining services manager emphasized that there is no geological information on the quantities of
minerals in the claims .Further exploration is required to quantify these occurrences.

DISCUSSION ITEMS
The discussion to mainly focus on the gold mining and processing options which will be then used for
the other non-chrome minerals.

GOLD EXPLOITATION OPTIONS For all For

Gold exploitation options were presented to the team for appreciation and further deliberation noting
The first item discussed was the UMCIMA tailings dump

PROPORSED PROCEDURE
1. Do a closed tender.
2. Contractor acquires an EIA certificate for
processing at own cost.
3. Processing done in Zimasco claim using
contractor equipment- environmental
liability remains with Zimasco.
OPTION 1
PROS
1. Less arduous on the company
as the company will not undergo
legislative processes (both legal
and environmental)
2.Liability will lie with the
contractor on both legal and
environmental.
CONS
1. There is need to increase
surveillance on the areas hence more
security obligations to avoid pilfering.
2.Strenuous in terms of operations
monitoring on Zimasco side

4. Compensation model: Percentages on the

revenue sharing to be determined when
final exploration figures are out
Zimasco security to monitor operations.
Sale of gold to Fidelity Printers

PROPORSED PROCEDURE
Open for bidders and sale the dump.
Buyer to carry the material out of
Zimasco claim blocks and process it
elsewhere
OPTION 2
PROS CONS
1. Liability will lie with the 1. Difficult on the contractor since there
contractor on both legal and is an added cost of transporting ore
environmental. outside the claim to process.
2.Shorter period realized on
acquiring cash once exploration
has been done conclusively

PROPORSED PROCEDURE
Zimasco sets up its own equipment on
site, process the ore and sells the gold
(owner operation)
OPTION 3
PROS
1. Zimasco set to benefit more-
plant to be designed with the
thinking that it would be later
used to process ores from the
gold bearing claims.
CONS
1. High initial capital outlay needed
to set up process plant. An estimate
of the cost pegged at about USD
200,000.00 for the set up.

The house agreed that exploration be carried out first before a decision is
reached.
Option 2 and 3 to be then considered on the potential value of the dump

The second item discussed was on Alluvial Gold Mining.

ZMDC to get 10% of gross revenue from all alluvial gold mining in Zimbabwe as per Cabinet
directive

OPTION 1
PROPORSED PROCEDURE PROS CONS
1. Zimasco carries out exploration 1. Reasonable gain on revenue 1. Strenuous process of getting the
on river bed in its claims to in recovered alluvial resource. legislative requirements in place.
understand the resource. 2.Increased security surveillance
2. Applies for SG and do joint 3. Liability will lie with ZIMASCO on
venture mining with ZMDC both legal and environmental.
getting 10% royalty on gross
revenue.
3. Process an EIA for river bed
mining working with JVC
partner.
4. Zimasco recovers its revenue
after sharing with JVC and
ZMDC.

OPTION 2
PROPORSED PROCEDURE PROS CONS
1. Do a closed tender 1. No hustles in getting paperwork 1. Need for increased surveillance in
2. Select a contractor with the for the alluvial mining on the terms of the security requirements
ability to get the necessary riverbeds. and operations monitoring on site.
papers and mine as earliest as 2. Risk of conflict with contractor on
possible. revenue sharing.
3. The Contractor does all the
paperwork including EIA
certificate.
4. Zimasco gets 30% of revenue
after the gold is sold to
Fidelity Printers.

OPTION 3
PROPORSED PROCEDURE PROS CONS
1. Maximum recovery of alluvial 1. High initial Capital outlay
resource and benefit in terms of 2. Increased security manning the
Owner mining and processing
revenue. sites.
3.Zimasco to face difficulties in getting
. paperwork for the alluvial mining on
the riverbeds

The house agreed that option 2 will be considered first when exploration results are finalized.

The Third item discussed was on In-situ Gold in Zimasco Claim blocks
The mining is basically subdivided into 2 subcategories namely small and medium to large scale
operators.
1. Small scale- producing less than 500t ROM ore per month.
Target areas:
Mainly wonderer, Peak and Valley in Zimasco claims where the reef is
 narrow, and not suitable for large scale operations
2. Medium to Large Scale- Producing more at least 1000t ROM per month.
Target areas:
3 claim blocks in Wonderer area,
2 claims in Railway block and
2 Claims in Tebekwe- (already allocated to Sinononferrous).
 The thrust is on Zimasco getting a percentage of either the slimes or the revenue of the
production

PROPORSED OPTION
OPTION 1
 Zimasco to provide mining
and processing equipment
SMALL SCALE
PROS CONS
 Easier to attract  Investment is risky because
contractors there is no sufficient
geological information with
regards to the gold claims

OPTION 2  Less risky with regards  Difficult to measure extend

to capital investment of due diligence with
 Zimasco does closed tender  Cuts on exploration regards to EIA and
and recruits contractors costs exploration
 The contractors carries out
own exploration and secures
an EIA
 Contractor does own mining;
Zimasco does further
processing
 Processing done in Zimasco
claims on a central location
allocated by Zimasco

OPTION 3  No capital investment  Does not give due financial

by Zimasco benefit to Zimasco
 Current approach which  Easier to manage
involves recruiting
contractors and leasing out
the claim blocks for a fixed
fee of US$ 200 per
tonne/Ha /Month

Option 3 was agreed upon in the meantime but the rates need to be adjusted and
continuously reviewed periodically to maintain

MEDIUM TO LARGE SCALE

PROPORSED PROCEDURE PROS CONS
OPTION 1

1. No CAPEX outlay 1. Need for increased

 1. Do closed tender and select surveillance in terms of the
contractor. security requirements and
2. The contractor carries out operations monitoring on
own exploration at own cost. site.
3. Contractor does own EIA
4. Contractor procures own
mining and processing
equipment. Processing done
outside Zimasco claims.
5. Sharing arrangement:
Zimasco gets 30% of Revenue
and Contractor 70%.
6. Security employed to monitor
gold production at the boiler.

OPTION 2 1. There is more benefit 1. Zimasco bears the legal

on Zimasco as there is and environmental
1. Owner mining and processing more return on the liabilities.
exploited resource 2. Initial CAPEX outlay
at a Capex of about US$
512,200 ( See small scale) required estimated at
around $600,000.00 based
on initial preliminary
Zimasco incurs an exploration cost of quotations.
US$110,000

OPTION 3

1. Zimasco recruits a contractor 1. No legal liability on the 1. Zimasco might be

through a closed tender
2. Zimasco sets up processing
equipment at a capex of
US$512,200( See small scale)
3. Contractor mines and
Zimasco processes
part of Zimasco. prejudiced of revenue in
the case when a contractor
discovers substantial
amounts of gold within the
claim.
2. Requires initial capital
outlay

The house agreed on option 1 for the time being, sharing arrangements to be
finalized.

EXPLORATION
 It was agreed that exploration be carried out, focus to start in the high potential areas and then
move to the secondary areas to ascertain the value of the resource in the claims.
 The dump to be sampled by augering to come up with a definitive estimate of what value the
tailings contained therein do have. This will then aid decision on coming up with the final
option, an estimate of $5000USD for the process was proposed.
 Manzimudhaka and the Valley alluvials to be sampled and quantified in terms of tonnage and
 grade an estimate of $5000USD was also proposed for the process for each site.
CLAIMS LEASE RATES

 It was resolved that the rates be revised to preserve the monetary value of the payments.
Suggestions were made on how to go forward on the issue. Reviews of the rates to be carried
out periodically (quarterly) and communicated to contractors. This will help to preserve the
value of the claim fees.

STATUTORY REQUIREMENTS.
 Mr Chinherende pointed out the need to familiarize and acquaint with Mining law regarding
licenses required when handling gold this would include environmental legislation as well:
CONTRACTS DRAFTING.

 Mr Matshiya emphasised that there is need to be explicit in the contracts especially those in
which the contractors will assume the responsibility of carrying out the exploration within
their allocated claims to avoid future turning back on agreed terms.

There being no further issues to discuss, the meeting ended at 1245hrs.

The date for the next meeting to be to be advised.

DATE:

M. CHIGUWARE
RECORDER

DATE:
R. MATSHIYA
CHAIRPERSON