Southern Africa-focused gold miner Caledonia Mining Corporation aims to have its Blanket gold mine, in Zimbabwe, produce 60 000 oz of gold at all-in sustaining costs (AISCs) of between $810/oz and $850/oz this year, says corporate development VP and investor relations manager Maurice Mason.
Blanket gold mine is the company’s primary asset, in which it has a 49% interest. He notes that, in accordance with Zimbabwe’s indigenisation law, the mine has been
51%-owned by black Zimbabwean nationals since 2012, with the local community and mineworkers each having a 10% shareholding stake in the project.
Mason tells Mining Weekly that Caledonia intends to ramp up gold production at Blanket to 80 000 oz/y by 2021 while driving down the mine’s AISCs to about $750/oz through the “benefits of greater economies of scale”.
Additionally, the gold miner has also ringfenced about $43-million to upgrade infrastructure at the mine to increase productivity and lower operating costs. Caledonia has, to date, spent about $22-million on these upgrades, which include the sinking of a new 1 000-m-deep shaft.
He points out that Caledonia recently announced record gold production from Blanket for the quarter and year ended December 31, 2016. Production included work in progress of about 754 oz as at December 31.
Mason remarks that about 13 591 oz of gold was produced by the mine during the fourth quarter of 2016, which is a new quarterly production record representing an 18% increase on the 11 515 oz produced in the fourth quarter of 2015, and a 1.2% increase on the 13 428 oz of gold produced in the third quarter of 2016.
“Total 2016 gold production was about 50 351 oz, which is a new full-year production record and represents a 17.6% increase over the full-year gold production in 2015 of 42 804 oz,” he highlights.
Mason explains that the increase in production in 2016 was largely due to the start of production from below 750 m, improvements in underground infrastructure and the commissioning of the mine’s new ball mill.
Making Mining Work
Mason says, despite the negative perceptions regarding the running of mining operations in Zimbabwe, Caledonia has proved that it is possible to have a sustainable, profitable mining operation in the country.
“We have excellent working relationships with the government and our workers in Zimbabwe, which is a key reason for our ongoing successes,” Mason emphasises, adding that 100% of Blanket’s mineworkers are locals.
He contends that “operationally, Zimbabwe is a fine place to run a mine”, as mines have security of power supply from the national electricity grid, there is sufficient water and it has a highly skilled and educated workforce.
“We have consistently paid out dividends to our shareholders over the past four years from our Zimbabwe operation, which clearly indicates we are running a profitable business. We are . . . also on the look-out for good quality, high-value assets to add to our project portfolio in the country, along with other gold assets in the rest of Africa and globally,” Mason concludes.