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Caledonia Mining Corporation switches to reality mode, admits monetary flaws can potentially affect its Blanket Mine

By News Editor

HARARE (Mining Index) – CALEDONIA Mining Corporation has now shifted its gear into reality mode regarding its position on the monetary situation in Zimbabwe, saying if the status quo remains unabated, it will potentially have adverse effects on the operations of its Zimbabwean subsidiary, Blanket Gold Mine.

This is despite the mining company revealing that operations at Blanket Gold Mine have to date, continued undisturbed by the current fiasco in the monetary system which had forced Zimbabwe Stock Exchange-listed mining giant, RioZim to temporarily close three of its mines in September this year owing to a foreign currency glitch in the country.

“Operations at Blanket are currently continuing as normal and the situation is being closely monitored by management and is receiving the highest levels of attention from Zimbabwean Monetary and Government authorities. Caledonia is actively and constructively engaged at the appropriate levels in government on a regular and on-going basis,” revealed Curtis.

Commenting on the operating and financial results for the third quarter of 2018, Caledonia Mining Corporation Chief Executive Officer, Steve Curtis acknowledged the complexity of the financial situation in Zimbabwe which he said may turn out to be an impediment to implementation of Caledonia’s capital projects.

“Difficulties in obtaining sufficient foreign exchange may jeopardise Caledonia’s ability to implement the Central Shaft project as planned,” he said, adding that “Caledonia intends to evaluate further investment opportunities in Zimbabwe that may not fall underneath Blanket’s ownership.”

“Recent changes in the banking environment in Zimbabwe and the chronic shortage of foreign exchange in Zimbabwe may present challenges with regards to operating cost inflation, and the ability to implement the capital investment programme at Blanket and to externalise cash from Zimbabwe,” said Curtis.

Expansion of the Central Shaft is expected to result in increased production, reduced operating costs and increased flexibility to undertake further exploration and development, thereby safeguarding and enhancing Blanket’s long-term future.

“The Central Shaft has now reached a depth of 1,148 meters and continues to progress well. We expect capex (capital expenditure) to decline as we progress towards the commissioning of the Central Shaft in 2020. The Central Shaft project is the key enabler of longer term value for our shareholders as we progress towards our production and cost targets by 2021,” he said.

Curtis highlighted Caledonia’s strategic focus, which he said is expected to extend the life of mine by providing access to deeper levels for production and further exploration.

In the outlook, Caledonia remains on track to achieve the production target of 80,000 ounces per year by 2021 at Blanket Mine. ENDS//

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