Name of the Project
Blanket gold mine expansion project.

Location
Zimbabwe.

Client
Caledonia Mining Corporation (49%).

Project Description
A revised investment plan and production projection were announced in 2014.

The revised plan aims to improve the underground infrastructure and logistics and allow for an efficient and sustainable production build-up.

Infrastructure improvements will include the continuation of the No 6 Winze  shaft, the development of a tramming loop 650 m below surface and the sinking of the new 6-m-diameter, four-compartment Central shaft.

Meanwhile, Caledonia Mining announced in November 2017 that it was planning to extend the depth of the Central shaft at the Blanket mine by 250 m to 1 330 m.

The extension, which will cost about $18-million, is expected to be commissioned by the first quarter of 2020.

Caledonia is still constructing the Central shaft and states that extending the shaft before it has been completed, equipped and commissioned is cheaper, quicker and less disruptive than a subsequent extension after commissioning.

The extension will add two further production levels than those already planned. They will provide access to the indicated and inferred resources below 30 Level and potentially increase Blanket's projected life-of-mine by a further four years to 2031.

The revised plan is also expected to improve Blanket’s long-term operational efficiency, flexibility and sustainability.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Based on the revised plan, the best-estimated net present value of the extension project has been calculated at $65-million at a real discount rate of 8.36%. The internal rate of return has been calculated at 42%.

Value
$50-million is expected to be spent from 2015 to 2017 and about $20-million from 2018 to 2020.

All capital expenditure is expected to be funded from Blanket’s in-house cash flows and existing facilities.

Duration
Production is expected to start in 2021.

Latest Developments
Caledonia Mining’s plan to extend the depth of the Central shaft at the Blanket mine by 250 m to 1 330 m will create an additional two levels, which will increase mining flexibility and further derisk the target production of 80 000 oz/y from 2021. This leaves Caledonia with a distinct window of opportunity to continue with its investment.

“The Central shaft is already a transformational project for our business, and to extend the project by an additional 250 m in depth, including development on 34 and 38 levels, will potentially secure Blanket's operating future for the next 20 years taking exploration potential into account,” CEO Steve Curtis has commented.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
The project remains on target for first production in January 2016, with production expected to reach the target rate of 500 t/d in May 2017.

Contact Details for Project Information
Caledonia Mining, tel +1 416 369 9835 or email info@caledoniamining.com.