WH Ireland notes that Blanket Mine has operated in Zimbabwe for over 100 years and in the 10 years under Caledonia, has operated without hindrance.
“During this time there have been no production halts as a result of operating in Zimbabwe – barring a period of non-production in 2008 as the country went from using Zimbabwean dollars to US dollars and the whole country stopped working for a while.
“Since early 2009 when production re-started following dollarization of the country there have been no production stoppages out of the control of Caledonia, outside of the normal course of mining.”
Caledonia owns 49 percent of Blanket but receives nearly 80 percent of the dividend flow from the mine until the vendor financing loans have been repaid. In addition, Caledonia receives a management fee, currently $4m per annum and also makes a margin outside Zimbabwe on the procurement activities in Johannesburg.
Current resources are only sufficient for another seven years of operation but moves the current reinvestment programme will prolong its lifespan.
Caledonia also hold the bulk of the mineral licences in Gwanda and has two advanced exploration projects in the area which are seen as key to pushing production above the 100 000 ounces mark annually.
The miner successfully moved its registration from Canada to tax haven Jersey, Channel Islands, on March 19 this year to avoid charges on dividends.-The Source
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