TORONTO (miningweekly.com) – Canada-based Caledonia Mining produced 766 oz of gold from its Blanket mine, in Zimbabwe, during April, and delivered the metal to Rand Refineries in South Africa, the firm reported on Wednesday.

Caledonia announced early last month that it planned to restart the mine, after being granted a gold dealers licence from the Ministry of Finance and a gold exporters license from the Reserve Bank of Zimbabwe, which entitles the company to meet the new gold-dealing and gold-export requirements.

Under the new policy, gold producers can market and sell their gold directly and are also allowed to keep the payment for their gold in foreign exchange.

Mining activities resumed on April 7, and milling began a day later, after Blanket secured working capital facilities and took delivery of the necessary consumables and spares.

The full sale proceeds of the gold delivered to Rand Refiners were credited to Blanket's foreign currency account with a Zimbabwean commercial bank.

The company hopes to reach an annualised production rate of 24 000 oz/y of gold by the third quarter of this year, but warned that this will depend on several factors, including an uninterrupted supply of electricity.

“In the period since the resumption of operations, electricity supply has been erratic with repeated unnotified interruptions which have adversely impacted on production,” the firm said.

The company is also in talks with potential lenders to raise further debt needed for the completion of its No 4 shaft-expansion project.

“Blanket's ability to resume production so rapidly vindicates the strategic decision made in October 2008 to continue to pay and feed our employees and thus retain our skill level at the mine,” said CEO Stefan Hayden.

“Provided a stable operating and monetary environment is maintained in Zimbabwe, it is hoped that commercial lending activities can resume which will allow Blanket to realise its next operating goal of becoming a 40 000 ounce per annum gold producer in 2010."

Shares in Caledonia Mining rose 5,9% on Wednesday, to C$0,09 apiece by 12:49 in Toronto.

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