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 was 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. 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.

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 is progressing with the sinking of a central shaft at its Blanket gold mine, with the second-quarter shaftsinking results better than expected.

The new shaft is being developed from surface to just below 1 000 m, with the shaft currently 870 m below surface. The company began sinking the shaft in August 2015 and aims to complete the project by the end of 2018.

Caledonia, however, experienced shaftsinking challenges during the second quarter, owing to a deficiency in the quality of the power supply from State-owned power utility Zimbabwe Electricity Supply Authority. This intermittent power supply has impeded work on the central shaft, requiring the sourcing of generators to mitigate shaftsinking delays and protect equipment against power surges.

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.