CALEDONIA Mining plans to double gold production at its Blanket Mine in Zimbabwe from the projected 40,000 ounces this year to around 75,000 ounces per annum in 2021 through a 70-US$70 dollar expansion project, the company said Monday.
Caledonia Mining Corporation, which is listed on the Toronto and AIM Exchanges, owns 49 percent in Blanket Mine.
The mining firm said in a mining exploration update that the expansion project was part of the firm’s response to lower gold prices and underground infrastructure constraints being experienced at Blanket Mine located in Zimbabwe’s Matabeleland South Province.
It said the expansion project will entail construction of a 6- meter diameter, 4-compartment Central Shaft from surface to 1, 080 metres down.
According to the firm’s investment plan, 50 million U.S. dollars will be invested in the period 2015-2017 and 20 million U. S. dollars from 2018 to 2020.
The mining firm said the expansion project will be funded from internal cash flows while most of the gold will come from resources currently classified as inferred.
Caledonia’s president and chief executive Stefan Hayden said the construction of the Central Shaft will substantially improve Blanket Mine’s operational efficiency and reinforce the beneficial effect of fixed costs being spread across more production ounces.
“The Central Shaft will also enhance the Mine’s operational flexibility by reducing its current dependence on a single production shaft and give it the flexibility to continue to explore and develop at depth,” Hayden said.
He added that the revised strategic plan represents a vote of confidence in Zimbabwe as an investment destination.
The expansion project is envisaged to create approximately 400 permanent jobs in Zimbabwe over the next five years, he said.Advertisement