Caledonia to spend US$21,4m capex in 2023


THE Caledonia Mining Corporation, which is traded on the Victoria Falls Stock Exchange, plans to invest about US$21,4 million in capital projects this year.

The mining company stated in its 2023 guidance that capital expenditure at Blanket Mine, its flagship operation, will total approximately US$9,6 million for a new tailings facility and an additional US$9,8 million for deep-level capital development to ensure operations can be maintained in coming years.

It is anticipated that over US$2 million would be spent once more in 2023 on the revision of the feasibility study for the bigger sulphide project at Bilboes.

It is estimated that operating cash flows and domestic borrowings will cover the cost of the group's projected capital expenditure.

Caledonia CEO Mark Learmonth stated that excluding the expenses of the Bilboes oxides project, cost guidance at Blanket and Caledonia was similar with the costs they had traditionally incurred.

“We anticipate that the inflationary pressures currently being experienced by most mining companies will be offset by efficiencies resulting from the successful implementation of Central Shaft,” he said.

“At the consolidated level, the all-in sustaining cost per ounce is also expected to benefit from the lower cost of electricity due to the recently installed solar plant.

“The on-mine cost of the small oxides project at Bilboes reflects the low grade of the oxide material."

Learmonth revealed that in terms of grade, output volumes, or cost profile, the oxides project is not anticipated to be comparable to the considerably larger sulphide project at Bilboes.

“Nevertheless, the oxides project is expected to contribute to the group’s cash generation whilst at the same time allowing us to pre-strip to the deeper sulphide material,” he said.

Learmonth said the company had acquired Bilboes, Motapa, and Maligreen during the past 18 months, resulting in the creation of an appealing portfolio of assets.

“Blanket will continue to serve as a solid foundation for this growth as we look to progress our assets with our long-term goal of becoming a multi-asset gold producer,” he said.

Learmonth said production guidance for 2023 assumes that Blanket will broadly maintain the production rate achieved in 2022.

“In 2014, Caledonia announced a plan to sink a new shaft (Central Shaft) to 1 200 metres from the surface, all funded through internal cash flow, with a long-term target of achieving an annual production rate of 80 000 ounces,” he said.

“I am delighted to announce today that we have now achieved this target, with 2022 annual production of 80 775 ounces — just over the top end of our guidance.

“This achievement is a huge milestone for the company; it has been a tremendous team effort and I would like to thank all of our employees for their continued hard work.”

 Estimated production from the minor oxides project at Bilboes, where mining activity is anticipated to begin in February is also included in the production projection.

In March, the business anticipates removing gold from the heap leach process.

The Bilboes Oxides Project is a small, two to three-year project that involves removing overburden to a depth of about 40 meters in order to expose the oxidised material.

This material will then be processed on-site using an existing heap leach facility that has been in use for the majority of the past 10 years.

The project needed about US$540 000 in initial capital, which was spent in 2022.

The operating expenses for removing the overburden and the oxide material, Learmonth said, will be deducted as they are incurred.

He added that these expenses would have been incurred because the larger sulphide project would have eventually needed the removal of the overburden.

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