CALEDONIA Mining Corporation could “see itself” growing into a 500,000 ounce a year gold producer through acquisitions of exploration properties in Zimbabwe, said Steve Curtis, CEO of the Toronto-listed firm.
The company was also scanning the Zimbabwean gold industry for opportunities to consolidate existing gold production.
Bloomberg News reported last month that Caledonia Mining signed a memorandum of understanding with the Zimbabwe government to evaluate some of the gold assets of Mining Development Corporation, a state-owned company.
“We recognise that being single asset won’t move the needle. We see our way with two or three projects of about 350,000 to 500,000 oz a year,” he said in response to questions at the Junior Indaba, a mining conference.
Caledonia Mining is currently expanding its Blanket mine to about 84,000 oz/year in gold production due to be delivered in 2022.
He added that Caledonia had a strong history in Zimbabwe; it, therefore, knew where to find new gold, but very few projects were at an advanced stage. “We don’t mind filling our pipeline with projects that would come to maturity at different times,” he said.
However, securing project finance was a constraint.
“There is no point getting absolutely eye-watering projects without the funding,” said Curtis. “I don’t think that’s available for a company like ours. But we can see 500,000 oz type company,” he said of Caledonia’s prospects.
Curtis added that Zimbabwe was a good place to operate despite the country’s dire economic situation with runaway inflation and failing services, as well as growing discontent with government corruption.
“We consider Zimbabwe one of the last gold frontiers,” said Curtis. “It is right next to South Africa where it has [access to] services. And because we are comfortable, we see a lot of opportunities. The resources are here and the government wants to see investment.”