Name and Location
Blanket gold mine expansion project, Zimbabwe.

Client
Caledonia Mining Corporation (49%).

Project Description
A revised investment plan and production projection have been announced for the Blanket mine.

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

The 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 a new 6-m-diameter, four-compartment Central shaft. The shaft will eventually be sunk to 1 080 m below surface, providing access to the current inferred mineral resources below 750 m and allowing for further exploration, development and mining in these sections along the 3-km-long Blanket strike.

The revised plan thus considers the expansion project below 750 m as a standalone project.

The increased investment pursuant to the revised plan is expected to increase production from inferred resources of about 70 000 oz in 2015 to 80 000 oz in 2021, in addition to projected production in 2021 from proven and probable mineral reserves of about 6 000 oz.

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

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 expects to fast-track development and increase production at its Blanket mine towards the end of the year, owing to having completed a tramming loop ahead of schedule in June.

The company has also completed the sinking of the No 6 Winze, with the shaft currently being equipped as part of the mine’s revised investment plan. This will be followed by horizontal development towards the mine’s two main resource bodies.

Most of the equipment required for the sinking phase has been acquired and is either on site or in transit to site.

Five generator units, with a combined generating capacity of 2 MVA, have also been acquired to provide back-up power supply to the kibble winder in the full sink phase, which is expected to start in January.

"We are pleased with the ongoing implementation of the revised plan, which is proceeding as scheduled,” Caledonia CEO Steve Curtis has said.

The shaft’s presink is expected to be completed by the end of the year.

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.