Blanket Gold mine, a unit of Toronto-listed Caledonia Mining Corporation, plans to increase gold production by 90% to 76 000 ounces in the next three years.
Report by Mernat Mafirakurewa Acting Business Editor
At the moment, the mine produces approximately 40 000 ounces per annum.
Blanket’s total capital investment between 2013 and 2017 is projected to top $37 million funded entirely from internal cash flows.
In a trading update yesterday, Caledonia said as a fully indigenised entity, Blanket mine could now develop and implement its long term growth strategy.
Blanket’s board of directors has approved a budget for 2013 and a strategic plan that covers the period 2013 to 2017.
Caledonia said Blanket’s efficient metallurgical plant had considerable surplus capacity adding it could process substantial volumes of additional ore with only a modest investment required to upgrade the existing crushing and milling circuits.
Increased production is also expected to come from the first three of Blanket’s portfolio of 18 satellite properties, which are expected to commence production in Q4 of 2013.
“The eventual rate of production from these properties will be determined by the success of on-going exploration and mining development work. Production from these properties has not been included in the 76 000oz gold target as the resources are undefined at present,” Caledonia said.
Blanket’s crushing capacity will be increased to 3 000 tonnes per day after minor amendments to the crushing circuits from the existing milling capacity of 1 460 tonnes per day will be increased to 2 900 tonnes per day following the budgeted investment of $850 000 on new rod mills.
It said work had already commenced on development projects at Blanket that were expected to progressively give rise to increased annual gold production of 36 000 ounces per annum. The first increase in gold production is expected in early 2014, and the targeted 36 000 ounce increase is expected to be achieved in 2016.
“Subject to the strategic plan projections, including future ore production, the price of gold and operating costs, and the company’s ability to adhere to the implementation timeline, both Blanket and Caledonia expect to continue to pay dividends throughout this period,” Caledonia said.
The two-part growth strategy includes exploration and development at satellite properties.