- Caledonia Mining has hosted an analysts’ visit at the Blanket Gold mine in Zimbabwe, providing the opportunity to see the progress on implementing the long term development plan which is aimed at increasing gold output from the present level of around 40,000 oz pa to approximately 65,000 oz by 2017 and 80,000 oz by 2021.
- The underground ore transport system known as the “tramming loop” on the 750m level is now in full operation and the benefits are now flowing through, with September quarter milled tonnage of 117,000 tonnes helping to deliver Q3 gold production of 10,927 oz; 5% above Q2 and 10% higher than the production in Q3 2014.
- The increased volumes have also started to reduce costs with a 7% reduction on a per milled tonne basis to $62.60/tonne compared to Q3 2014.
- The new Central Shaft, which is planned to reach a depth of 1080m by June 2018 is well underway with the pre-sinking stage largely complete. The company has purchased winders for the shaft from another mine in South Africa and refurbished them generating substantial cost savings over the price of new equipment.
- Drilling work to upgrade the resources below the 750m level is well underway and part of a long term programme of resources estimation drilling over at least the next 3 to 4 years. Existing mines within the area have already mined to significantly greater depths than the Blanket mine and, although there may be changes to the metallurgical characteristics of deeper mineralisation there is reason to infer that the drilling programmes will demonstrate that gold mineralisation extends at least to the depths envisaged in the company’s development plan.
- The company has also identified a number of other deposits within its licences which, subject to positive metallurgical test results and project economics, have the potential to deliver additional sources of feed to the Blanket mill, where additional milling and treatment capacity is also part of the long term plan.
SP Angel Conclusion: The site visit, in conjunction with the recently released Q3 results provided evidence that the development programme is beginning to bear fruit in terms of both production and costs. The major work on site is being managed efficiently by an experienced in-house team and is currently on schedule. We await the next results from the drilling work which, if positive, should help to upgrade the deeper level inferred resources and should add further support to the credibility of the long term plan.
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