JOHANNESBURG (miningweekly.com) – Aim- and TSX-listed Caledonia Mining would invest about $37-million in its Blanket mine, in Zimbabwe, between now and 2017 and planned to increase output at the mine by 90% to 76 000 oz/y of gold by 2016, up from the 40 000 oz targeted for 2013.

The company said in an announcement on Wednesday that it would invest $4.7-million, in addition to the normal planned capital expenditure required to sustain operations at the mine, to increase production and to conduct exploration and preproduction development of the first three satellite projects to access additional ore.

To increase available ore, Caledonia would conduct down-dip exploration and development of the Blanket mine, as well as explore and develop the mine’s satellite properties, three of which – GG, Mascot and Eagle Vulture were currently undergoing exploration and underground development work.

The eventual rate of production from the satellite properties would be determined by the success of ongoing exploration and mining development work.

Development of the existing ore resources above and below the current lowest mining level of 750 m had already started and was expected to produce an additional 36 000 oz/y of gold by 2016.

The first additional 12 000 oz/y of gold would be delivered in the first quarter of 2014 through the further development of the Blanket mine above the 750 m level.

The realisation of the remaining 24 000 oz/y would start in the fourth quarter of 2015, following the deepening of the No 6 Winze project at the mine to the 1 080 m level to allow more access to the Blanket orebody below the 750 m level.

Further, Caledonia stated that the mine’s metallurgical plant had considerable surplus capacity to process substantial volumes of additional ore and that only a “modest investment” would be needed to upgrade the existing crushing and milling circuits.

Blanket's crushing capacity would be increased to 3 000 t/d following minor amendments to the crushing circuits. The existing milling capacity of 1 460 t/d would also be increased to 2 900 t/d.

These capacity increases would enable the operation to process a substantial amount of additional compatible ore.

Caledonia would fund the $37-million capital investment from internal cash flows.