CALEDONIA Mining said it had finished equipping the central shaft extension at its Blanket mine which would increase production of the operation to about 80,000 ounces of gold a year from current annual production of 55,000 oz.
Project costs were at $60m to date which compares to initial supplier quotes of about $100m. Full production of the expanded mine, via the deepening of its central shaft, would be in the firm’s 2022 financial year.
All-in sustaining costs (AISC) of Blanket would be reduced to between $700 and $800 per ounce compared to current AISC of $855/oz. Mining would also be extended to 2035.
“The completion of the equipping phase is a huge milestone for the company, and no-one should underestimate this achievement,” said Steve Curtis, CEO of Caledonia. The project was one of the largest gold mining investments in Zimbabwe, he added.
Curtis said in November he could foresee growing Caledonia into a 500,000 oz/year gold producer over time through acquisitions of exploration properties in Zimbabwe. “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.
“Over the last five years we have built a solid foundation for the company, we have a healthy balance sheet, a strong gold price and a highly cash generative asset with free cash flow expected to increase significantly with the rise in production,” he said today.
