Caledonia Mining Corporation has poured US$67 million using internal cashflow initiatives into Blanket Mine’s five-year Central Shaft sinking project, which is due for commissioning this quarter.
The Gwanda-based gold mine completed the Central Shaft sinking project last year.
Caledonia chief executive officer, Mr Steve Curtis, said the last 12 months have been transformational for the business. “Central Shaft has been a five-year project costing approximately US$67 million, all funded through internal cashflow and I am delighted that equipping was completed in the period and commissioning is on track to be completed in the first quarter of 2021,” he said.
Last year, Blanket Mine produced 57 899 ounces, which was at the top end of the guidance range and was a new record for annual production.
The strong operating performance was supported by a rising gold price and gross profit for the year under review was $46,6 million, almost 50 percent higher than 2019. “Once Central Shaft is commissioned, we can start to expect further increases in production: guidance for 2021 is a range of 61 000 to 67 000 oz while from 2022 onwards it is 80 000 oz, 38 percent higher than in 2020,” said Mr Curtis.
He said their strategic focus was expected to reduce operating costs and increase flexibility to undertake further exploration and development, thereby safeguarding and enhancing Blanket’s long-term future. “We will also conduct exploration activities at Glen Hume and Connemara North while evaluating further investment opportunities in the gold and precious metals sector in Zimbabwe and in other jurisdictions, with our long-term vision of becoming a mid-tier, multi-asset gold producer,” said Mr Curtis.
“In trying to minimise the impact of our operations on the natural environment and in a general drive towards a more sustainable future for our business, Caledonia has entered into a contract to construct a 12MW solar plant at the Blanket Mine. To fund the project, in the third quarter of 2020, the company issued approximately 600 000 shares to raise US$13 million before expenses.” Mr Curtis said the number of shares issued was lower than the 800 000 new shares that the Caledonia had expected to issue, thereby improving the anticipated returns to shareholders from the project.