Blanket Mine to commission US$18m shaft in Q4

BY MTHANDAZO NYONI

A TOP official at mining concern, Caledonia, says the company plans to commission its US$18 million central shaft expansion project at Blanket Mine in Gwanda during the fourth quarter of this year,.

The project is expected to increase production, reduce operational costs and increase flexibility to undertake further exploration and development, thereby safeguarding and enhancing the mine’s viability.

Following the commissioning of the project, production is expected to jump to 75 000 ounces in 2021 and later increasing to 80 000 ounces in 2022.

“We expect the central shaft to be commissioned in the fourth quarter of 2020; thereafter, we look forward to further increases in operating cash flow as production increases to the target rate of 80 000 ounces of gold per annum from 2022, as capital expenditure falls further and we begin to realise the operational efficiencies arising from the new shaft,” the company’s chief executive officer Steve Curtis said in a recent statement.

Meanwhile, the company has declared an increased quarterly dividend of US$0,075 on each of its common shares.

“I am pleased to announce a 9,1% increase in the dividend, which reflects our increased confidence in the outlook for our business. As we reported in mid-November 2019 when we published the results for the third quarter of 2019, our financial performance has improved due to increased production and the continued higher gold price. This improvement has continued through the final quarter of 2019,” Curtis said.

“As we approach the end of the five-year investment programme at Blanket Mine, we anticipate the rate of capital expenditure will begin to reduce from the middle of 2020, which gives us greater flexibility to consider deploying some of our cash reserves on an increased dividend.”

He said the board would review Caledonia’s future dividend distributions as appropriate while considering the balance between delivering returns to shareholders, pursuing the significant growth opportunities within Zimbabwe and maintaining a prudent approach to financial management.

The New York Stock Exchange-listed Caledonia has a 49% interest in Blanket Mine.

In November 2018, the company announced that it had signed a legally binding agreement to increase its holding in Blanket to 64%, subject to receipt of, among other things, regulatory approvals.

As at September 30 2019, Caledonia had cash at hand estimated at US$8 million.

In 2019, Blanket had targeted to produce between 50 000 and 53 000 ounces.

Do you have a coronavirus story? You can email us on: news@alphamedia.co.zw