New York Exchange-listed gold mining company, Caledonia Mining Corporation plc is developing a new mine underneath its Gwanda based Blanket Mine as it seeks to produce over 2 tonnes of gold annually.
The government through the Minister of Mines and Mining Development Hon Winston Chitando is on record optimistic that Blanket Gold Mine is vital towards the achievement of the US$12 billion mining industry where gold is expected to produce an annual revenue of US$4 billion.
According to Caledonia Chief Executive Officer Mr. Steve Curtis, after the development of a central shaft which was commissioned this year, the company is developing a three-level new mine underneath the existing mine in an effort to reach its 2022 target of producing 2.28 tonnes annually.
“We have solely ramped up production from about 20 000 ounces a year to our target of next year’s 80 000 and over the last five years we have done a five-year expansion project sinking a new shaft down to 1200 metres and we are developing effectively a 3-level new mine underneath the existing mine. The mine is over 110 years old and it’s produced over a million ounces of gold and as we stand here today it has got a life of mine up until 2034.” Curtis said.
Caledonia increased its gross revenue by 31 percent year-on-year to $30-million for the second quarter of the year 2021.
During the quarter the company produced 24 percent more gold year-on-year, at 16 710 ounces setting a new second-quarter production record.
Over 165 000 t of ore were mined and milled in the second quarter, which is a new production record for any quarter and reflects the contribution of Caledonia’s Central shaft, which was commissioned at the end of March and the build-up towards the target of 80 000 ounces per year from 2022 onwards.
In terms of production in the first half of the year, Caledonia produced 8 percent more gold in comparison to the first half of 2020.
Going forward, the miner states that production in July was 5 995 ounces, thereby showing a steady increase in average monthly production and demonstrating that the Blanket mine is on track to achieve its production guidance of between 61 000 ounces and 67 000 ounces for the full year.
The mine’s cost guidance for this year is in the range of $740 per ounce to $815 per ounce, with guidance for AISC being between $985 per ounce and $1 080 per ounce.
Meanwhile, the company has decided not to proceed with the acquisition of the Glen Hume property in the Northern part of Gweru owing to disappointing exploration results.
Curtis notes that the company’s net profit was adversely affected by the impairment of the Glen Hume exploration asset following the board’s decision not to proceed further with this project.
Nonetheless, Caledonia reports that it will conduct exploration at Connemara North, the other optioned property in Zimbabwe, and will also consider further investment opportunities in Zimbabwe and elsewhere.
As for the solar photovoltaic project being undertaken by Caledonia at the Blanket mine, the company reports that this is now in the procurement phase, with project completion expected in April 2022.
This project is expected to provide about 27 percent of Blanket’s average daily electricity use.