Caledonia Mining plans to invest up to $70 million in six years at its Blanket Mine near Gwanda to nearly double its gold output by 2021, an official said today.
Stefan Hayden, Caledonia’s president and chief executive said the junior miner will invest approximately $50 million in the period 2015-2017 and a further $20 million between 2018 and 2020 which would increase gold production by 87.5 percent from the current 40 000 ounces annually to 75 000oz 2021.
All capital expenditure would be funded from Blanket Mine’s internal cash flows and existing facilities, he said in a statement.
“It is anticipated that the construction of a central shaft will substantially improve Blanket Mine’s operational efficiency and reinforce the beneficial effect of fixed costs being spread across more production ounces,” he said.
Hayden noted that the central shaft would 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.
“The revised strategic plan represents a vote of confidence in Zimbabwe as an investment destination. I am pleased to say that Blanket’s indigenous shareholders and the government of Zimbabwe are both highly supportive of the revised plan.
“Implementation of the plan will result in considerable long term benefits to all stakeholders, including Caledonia and Blanket shareholders, Blanket’s current and future employees, the surrounding community and the government of Zimbabwe,” he added.
Implementation of the plan is expected to create approximately 400 full time jobs in Zimbabwe over the next five years, he added.
“Once these projects are completed, Caledonia and Blanket will have the critical mass and the financial capacity to consider significant new investment opportunities,” said Hayden.
Caledonia, which has a 49 percent interest in Blanket Mine, with the rest of the shareholding in indigenous hands, last month, trimmed its forecast for gold output to 40 000oz this year after a dip in grades.
Production in the nine months to September was 31 354 ounces, prompting Caledonia to reduce its full year target to 40 000 ounces from 45 000oz.- The Source