Name of the Project
Blanket gold mine expansion project.

Location
Zimbabwe.

Project Owner/s
Caledonia Mining Corporation (64%).

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 allows 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 raised $13-million for the construction of a solar power plant to supply electricity to the Blanket gold mine, through the sale and issue of about 600 000 shares in the company, pursuant to an “at the market” sales agreement with Cantor Fitzgerald.

Following the issue of these shares, the company has 12.1-million shares in issue.

As announced on July 24, Caledonia made an application to the Aim for a block admission in respect of up to 800 000 new depositary interests, representing the same number of shares in the share capital for the company that will rank pari passu with the existing shares in issue.

With Caledonia having raised the maximum amount of funds sought under the sales agreement, the company has, consequently, cancelled the remaining portion of the block admission – about 202 000 depository interests – effective September 7.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
Caledonia Mining, tel +1 416 369 9835 or email info@caledoniamining.com.