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Blanket mine pins hopes on new $44 million shaft

By Business Reporter – Wednesday 31 July 2019

HARARE (Mining Index) – BLANKET Mine has completed sinking a new central shaft to the tune of $44mln which is expected to ramp up production at the mine in the long term, parent company Caledonia Plc has announced.

In a statement released to the media, Caledonia said the new shaft will ramp up production to 80 000 ounces of gold per year by 2022 from the current 54,511 ounces.

“The central shaft project has been in progress since early 2015 and the company has spent approximately $44 million sinking a new shaft from surface to a depth of over 1,200 meters (approximately 4,000 feet). The project now moves to the equipping phase prior to commissioning which is expected during the third quarter in 2020. Production from Blanket mine is then expected to progressively increase to the target of 80,000 ounces of gold per year from 2022 onwards,” read the statement.

Production at the central shaft is expected to commence in the second quarter of 2020, delivering the company’s growth plan of 75,000 ounces in 2021.

The Canadian listed firm expects the increased production, combined with economies of scale and lower future capital investment to result in significant increases in Caledonia’s profit and distributable cash.

Caledonia’s Chief Executive Officer, Steve Curtis said completion of the shaft sinking is a key milestone in the investment plans of the company.

“Completion of the shaft sinking is an important milestone in Caledonia’s investment plan.  I would like to recognise the outstanding contribution of Caledonia’s technical staff, led by Dana Roets, Caledonia’s Chief Operating Officer, who have worked hard over the last five years to ensure that we have reached this point.

“We now commence the equipping phase, which will take approximately 12 months, after which we can commence the production ramp-up towards our target of 80,000 ounces of gold in 2022.”

Caledonia’s gold production for the second quarter ended June 30, 2019 was up 6.4% to 12,712 ounces from 11,948 ounces produced in the first quarter.  However gold production for the first half of 2019 slumped 3.4% to 24,660 from 25,582 ounces produced in the comparable quarter. Nonetheless, Caledonia maintains its 2019 full year production guidance of 53,000 to 56,000.

Curtis attributed the quarterly improvement to enhanced grade control at Blanket mine.

Production in the second quarter of 2019 was slightly below our target but ahead of the comparable quarter in 2018 and still at a level at which we remain comfortable with our 2019 production guidance of 53,000 to 56,000 ounces for the full year. I am pleased to report that our efforts to improve grade control have delivered results in the quarter although this remains a significant area of focus.” he said. ENDS//

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