18th Jun 2015 11:15
LONDON (Alliance News) - Caledonia Mining Corp Thursday said it is progressing its revised investment plan for the Blanket mine in Zimbabwe on schedule and on budget.
"We are pleased with the ongoing implementation of the revised plan, which is proceeding as scheduled and within budget," said Chief Executive Steve Curtis.
The exploration miner said it has completed the tramming loop at the company's flagship Blanket gold mine in Zimbabwe ahead of schedule, which will allow Caledonia to develop more of the project, leading to higher levels of production when operations begin toward the end of 2015 to produce around 42,000 ounces of gold per year.
The No.6 Winze shaft has also been completed, with the aim of accessing deeper-level resources, and the company is now preparing to equip the shaft by the end of July. Once equipped, the company will mine horizontally from the shaft toward the two main resource bodies at the project.
Production from the No.6 Winze shaft is expected to begin in January 2016, reaching a target rate of 500 tonnes per day by May 2017, it said.
"The completion of the tramming loop and sinking of the No. 6 Winze are significant steps towards incrementally increasing production from 2016 onwards to achieve an annual rate of 80,000 ounces of gold by 2021," said Curtis.
At the central shaft of the project, surface earthworks have been completed, and the shaft will be sunk into the ground to around 1,080 metres below surface. The new central shaft will provide access to the current inferred mineral resources below 750 meters and allow for further exploration, development and mining in these sections
Caledonia revised its investment plan for the Blanket mine in November 2014 to try to improve the underground infrastructure and logistics at the site to stabilise the production build-up.
The group plans to make an investment of approximately USD50 million between 2015 and 2017, and about USD20 million more between 2018 and 2020. The entire capital expenditure will be covered by internal cashflows from Blanket and from existing facilities.
That revised investment plan was in response to the mine's declining production rates and head grades, which forced the company to reduce its guidance for the last financial year.
Caledonia Mining shares were down 2.3% to 51.32 pence per share midday Thursday.
By Joshua Warner; [email protected]; @JoshAlliance
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