Blanket gold mine expansion project, Zimbabwe
Name of the Project
Blanket gold mine expansion project.
Location
Zimbabwe.
Project Owner/s
Caledonia Mining Corporation (64%).
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 allows 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.
The extension will add two further production levels. 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%.
Capital Expenditure
The Central shaft project is estimated at $44-million.
Planned Start/End Date
Production is expected to start in 2021.
Latest Developments
Caledonia Mining has fully equipped the Central shaft – from the base to the surface collar – of the Blanket mine, well below budget and within its set timeframe. The shaft sinking was completed in 2019, before the company moved to the now completed equipping phase before the commissioning planned for the first quarter of 2021.
“Central shaft is one of the largest gold-mining investment projects in Zimbabwe and will be transformational to our business: our target production is set to increase by 45% – to 80 000 – oz by 2022, while our long-term all-in sustaining costs are expected to drop to $700/oz to $800/oz,” Caledonia CEO Steve Curtis has explained.
Central shaft will also enable the company to enhance its deep-level exploration, which, if successful, may extend Blanket’s life-of-mine, which is currently to 2034.
Caledonia has injected $60-million into the owner-built project since inception in 2015, and has fully funded it through internal cash flow, completing the work at a cost that is well below initial quotes received, with initial sinking contractor quotes received of about $100-million.
Further, over the past five years, the crew achieved 1 850 fatality-free shifts, with only two lost-time injuries (LTI) and more than one-million LTI-free work hours completed since the last LTI.
“Over the last five years, we have built a solid foundation for the company; we have a healthy balance sheet, a strong gold price and a highly cash generative asset, with free cash flow expected to increase significantly with the rise in production,” Curtis has commented.
Key Contracts, Suppliers and Consultants
None stated.
Contact Details for Project Information
Caledonia Mining, tel +1 416 369 9835 or email info@caledoniamining.com.
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