Clarity recaps Duration Gold's operations and political developments in Zimbabwe.

Zimbabwe - Political

• September 15 2008 - Global Political Agreement (GPA) signed proposing an amendment to Zimbabwe's constitution paving the way for an Inclusive Transitional Government between ZanuPF (Mugabe) and MDC (Tsvangirai).
• February 5 2009 - Constitutional Amendment 19 passed by the Zimbabwe Parliament.
• February 13 2009 - Inclusive Transitional Government (ITG) formed between MDC and Zanu PF - Morgan Tsvangirai and MDC members sworn in as Prime Minister and cabinet ministers, respectivel.
  • ZanuPF retains the "coercive ministries" e.g. military, intelligence and shares the police (Home Office) with MDC - Mines Ministry also retained.
  • MDC receives the "service" ministries as well as the Ministry of Finance with Tendai Biti as Minister. MDC's overarching goal is to ensure the main deliverable under the GPA, a new constitution, a referendum approving it followed by free and fair elections, before September 15, 2010.
• International community greets the GPA/ITG with skepticism ("a bus with two drivers").  MDC acknowledges serious flaws, but had little choice in accepting it based on Southern African Development and Economic Community (SADEC) pressure.  Regular set backs expected along an upward trajectory. April 22, 2009 - Jacob Zuma elected President of South Africa.  Zuma, considered no friend of Mugabe, has tight family and union ties to MDC.  Not expected to take coercive action against ZanuPF - he is expected to be guardian of the main GPA deliverable - constitutional reform process leading to free and fair elections in 2010.

Zimbabwe - Economic

• January 2009 - Monetary Policy Statement (MPS) issued by Reserve Bank Governor Gono (ZanuPF) followed by January 29, 2009 budget of Acting Minister of Finance PA Chinamasa (ZanuPF) attempts to steal the new MDC Finance Minister's thunder.  Various "180º" policy changes including:
  • Official dollarisation of Zimbabwe economy. USD now reference currency accepted as legal tender along with SA Rand
  • Gold miners permitted to sell gold on international markets at spot prices and repatriate proceeds thus abolishing Reserve Bank monopoly
• March 2009 - Tendai Biti, new Finance Minister (MDC), tables his first budget, confirming and extending earlier ZanuPF changes and proposing a range of new initiatives.  General short term economic assessment grim compared to earlier ZanuPF pronouncements (halving projected revenues to achieve balanced budget) - but optimism that the worse is behind and the path left is recovery. International assistance critical - but not expected in short term.
• March 19 2009 - Short Term Emergency Recovery Plan launched focusing on the humanitarian crisis and agriculture, manufacturing and mining.
• Inflation contained, with increased supply of goods and services resulting in falling prices.  Shop shelves have filled up as a result of small and medium scale business revival supported by fund inflows from entrepreneurs and Diaspora.
• Public sectors such as health, education and infrastructure coming back from near collapse.  7000 schools have been reopened since ITG and several hospitals reopened. Public funded road work and construction once again underway.
• Zimbabwe stock exchange has resumed trading in USD
• June 2009 - Prime Minister Tsvangirai embarks on first official "rebranding Zimbabwe" tour visiting US and European heads of state while seeking international development assistance and foreign direct investment.  West remains skeptical and continues to demand that key milestones be met concerning democratization, respect for human rights and the rule of law.
• June 30 2009 - Tsvangirai announces US $950 million Chinese line of credit and US $500 million in financial "pledges" from the US and Europe.  Government revenues show a clear upward trajectory with receipts for: February - $13 million, March $30 million, April $52 million and may $68 million.  Zimbabwe Stock Exchange market capitalization about $2 billion.

Duration Gold - Operations

• In February the Vubachikwe mine recommenced production followed by Umviga mill (June 15) and Athens mine (June 22)
• 100 kgs of gold produced to date
• Gold sale revenues of US $2.9 million realised
• April 2009 - Duration licensed to market and sell its own gold production.  Refining agreement entered into with Rand Refinery, SA
• June 2009 - Reserve Bank of Zimbabwe backed Gold Bond reflecting a portion of 2008 gold sale proceeds owed to Duration was sold for net cash proceeds of US $2.6 million.
• May 2009 - Mark Meyer, Engineer, joins Duration as COO. Based with his wife in Bulawayo Mark, who extensive mine design, construction and operation experience in Africa, including Zimbabwe, is charged with executing the company's business plan.
• June 2009 - Duration updates business plan and budget
• Monthly gold production set to rise from 1,000 oz to 2,000 oz by year end
• Expansion of Vubachikwe CIL processing plant to 30,000 tonnes per month is underway and internally financed.
• June 2009 - Several drilling programs initiated to confirm prior JORC compliant reserves and resources.
• A range of acquisitions moving through due diligence review
• US $8.0 million private placement with several well known UK and international institutional funds nearing completion.  Duration principals agree to $2.25 million participation.
• August and October Zimbabwe investor relations tour planned in conjunction Clarity Capital.