HARARE (Reuters) - The Zimbabwe unit of London-based Gold mining company Metallon Corporation said it will spend $78.3 million to buy new equipment and expand underground mining to increase production to 150,000 ounces of gold this year. Metallon Corporation runs five gold mines in Zimbabwe through its Metallon Gold unit which produced 98,864 ounces last year, just shy of its target of 100,000 ounces. Klara Kazmarek, Metallon head of communications said the investment would be financed from loans and internal cash and could vary depending with results of feasibility studies. Metallon also said in a statement on its website it would need $300 million to reach an output of 500,000 ounces by 2019. The company said it would cut costs to double net profit to $22 million this year, with gold production costs falling to $883 an ounce from $946 last year. Metallon said it was awaiting approval of its proposal to partially comply with the government's black economic empowerment. The southern African country requires foreign-owned mines to sell at least 51 percent to black Zimbabweans. Metallon, majority-owned by South African businessman Mzi Khumalo, said it plans to sell 10 percent stakes each to employees, local communities and a government empowerment agency. (Reporting by MacDonald Dzirutwe; Editing by James Macharia)