Name of the Project
Blanket gold mine expansion project.

Location
Zimbabwe.

Project Owner/s
Caledonia Mining Corporation (49%).

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 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 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 Corporation has completed the sinking of the new Central shaft at the Blanket gold mine. It has been sunk to a depth of more than 1 200 m.

The project will now move to the equipping phase, which will take 12 months to complete.

Thereafter, commissioning will start – in the third quarter of 2020.

The Blanket mine plans to increase production from 54 511 oz/y in 2018 to about 56 000 oz this year, and to 75 000 oz in 2021, once the new shaft has been commissioned.

Further, production at Blanket is expected to increase to 80 000 oz/y from 2022.

Caledonia expects the increased production, combined with economies of scale and lower future capital investment, to result in increased profit and distributable cash.

Meanwhile, Caledonia has signed a legally binding agreement with Fremiro Investments to buy its 15% shareholding in Blanket for $16.6-million. This will increase Caledonia’s holding in Blanket to 64% once regulatory approvals have been granted.

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.