- December 1, 2020
- Posted in NEWS
CALEDONIA Mining Corporation says it has completed a US$60 million project to equip its Central Shaft at its flagship Blanket Mine in Gwanda, Matabeleland South.
The development extends Blanket Mine’s life to 2034 with the Central Shaft expected to increase production by around 45 percent from approximately 55 000 ounces of gold in 2019 to the target rate of 80 000 ounces from 2022.
The company is set to enjoy reduced costs owing to economies of scale and operational efficiencies. According to the latest update from the company, the Central Shaft would reduce the all-in sustaining cost per ounce of gold from $855 in 2019 to between $700 and $800 per ounce.
The Central Shaft project began in August 2015 and targets higher safety standards with fatality free shifts. The scope of the project was extended from an initial target depth of 1,089 metres to a final depth of 1,204 metres and was self-funded and built by the Blanket Mine crew with supervision from Sinking Engineering Mining Construction.
“Caledonia Mining Corporation is pleased to announce that the phase of fully equipping the Central Shaft from its base to the surface collar is now complete and it is on track to be commissioned in the first quarter of 2021,” said the company on Monday.
“During shaft sinking, more than 1,800 metres of infrastructure development was completed including mid-shaft loading. Capital cost to date is approximately US$60 million, compared to initial sinking contractor quotes received of about US$100 million.
“This has been completed considerably below budget and within a time frame to underpin the company’s expectation of delivering production of 80 000 ounces of gold in 2022.”
Caledonia said the Central Shaft would also provide access for further deep-level exploration, which, if successful, may extend Blanket mine life beyond 2034. Commenting, Caledonia chief executive officer, Mr Steve Curtis, said the completion of the project was a huge milestone for Blanket Mine.
“The last five years have been a tremendous team effort and we commend our employees for their hard work and their commitment to safety,” he said.
“Shaft sinking is widely regarded as one of the most dangerous activities in mining and I am proud to report that for more than five years, the crew achieved 1 850 fatality-free shifts.
We’ve invested approximately US$60 million in this project since we first announced it in 2015 and it has been owner-built and fully funded through internal cash flow and has been completed at a cost that is well below initial quotes received.”
Mr Curtis said the Central Shaft was one of the largest gold mining investment projects in Zimbabwe and will be transformational to the business.
“Over the last five years we have built a solid foundation for the company, we have a healthy balance sheet, a strong gold price and a highly cash generative asset with free cash flow expected to increase significantly with the rise in production. This is a very exciting time for Caledonia,” he said.