CALEDONIA Mining Corporation (Caledonia) has started equipping its US$44 million central shaft meant to ramp up production to about 80 000 ounces annually and the exercise is expected to be completed in the fourth quarter next year.
BY MTHANDAZO NYONI
In its management’s discussion and analysis of the consolidated operating results and financial position for the quarter ended September 30, 2019, the mining group said the shaft-sinking project, completed in July this year, was now undergoing equipping phase prior to commissioning in the fourth quarter next year.
Production from Blanket Mine was expected to progressively increase to the target of 80 000 ounces of gold per year from 2022 onwards.
“As announced on July 24, 2019, the central shaft has reached its target depth of 1 204 metres, which means that the shaft sinking phase of the project has been completed. Work has commenced on equipping the shaft, but was severely affected by the sustained power outages experienced in July and early August and in October,” the company said.
“It is expected that equipping will be completed in the fourth quarter of 2020, after which production from central shaft can commence. Production in 2021 is expected to be approximately 75 000 ounces, increasing to the target rate of 80 000 ounces in 2022,” it said.
The mining company, which owns 49% interest in Gwanda-based Blanket Mine, said completion of the shaft-sinking phase at central shaft was a significant milestone and substantially de-risks the remainder of the project.
Caledonia said its board and management believed the successful completion of the central shaft was in the best interests of all stakeholders because “it is expected to result in increased production, reduced operating costs and increased flexibility to undertake further exploration and development, thereby safeguarding and enhancing Blanket’s long-term future.”
“Caledonia continues to evaluate further investment opportunities in Zimbabwe that would not fall under Blanket’s ownership,” it said.
In the three months to September this year, gold output at the mine dipped 2,4% year-on-year to 13 646 ounces, held back by lower mining rates.
But gold production was up 7,3% quarter-on-quarter.
Caledonia is an exploration, development and mining corporation focused on Zimbabwe.
Following the implementation of indigenisation at the Blanket Mine in September 2012, its primary asset is a 49% legal ownership in Blanket, an operating gold mine in Zimbabwe.
Pursuant to the signing of an agreement announced on November 6, 2018, Caledonia intended to purchase a further 15% of Blanket from one of the mine’s indigenous shareholders.
The transaction remains subject to approval of various Zimbabwean regulatory authorities.