LONDON (Alliance News) - Caledonia Mining Corp Monday said the revised mine plan for the Blanket mine in Zimbabwe is being implemented on time and on budget.
The miner revised its investment plan for the Blanket mine in November 2014 to try to improve the underground infrastructure and logistics at the site to stabilise the production build-up. That revised plan was in response to the mine's declining production rates and head grades, which forced the company to reduce its guidance in the last financial year.
Under that revised plan, Caledonia has completed the tramming loop ahead of schedule, which will allow Caledonia to develop more of the project, leading to higher levels of production when operations begin toward the end of 2015 to produce around 42,000 ounces of gold per year. Commercial production will begin in January.
The No.6 Winze shaft has also been completed, with the aim of accessing deeper-level resources and the shaft is now being equipped so the company can begin horizontal development towards the two main resource bodies.
Although the company said the overall plan is on schedule, it had previously said it would have the shaft equipped before the end of July.
"The completion of the Tramming Loop and sinking of the No. 6 Winze earlier in the year were significant steps towards progressively increasing production from 2016 onwards to achieve an annual rate of 80,000 ounces of gold by 2021," said Chief Executive Steve Curtis.
At the central shaft of the project, surface earthworks have been completed, and the shaft will be sunk into the ground to around 1,080 metres below surface. The new central shaft will provide access to the current inferred mineral resources below 750 meters and allow for further exploration, development and mining in these sections.
"The Central Shaft project remains on target. I expect that the pre-sink will be completed by the end of 2015 and the main sink phase from 90 metres to 1,080 metres will commence in mid-January 2016," said Curtis.
The group plans to make an investment of approximately USD50 million between 2015 and 2017, and about USD20 million more between 2018 and 2020. The entire capital expenditure will be covered by internal cashflows from Blanket and from existing facilities.
Caledonia shares were up 1.5% to 40.60 pence per share on Monday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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