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Charity Ruzvidzo Business Reporter
CALEDONIA Mining Corporation, which owns Blanket Mine in Gwanda, plans to spend about $28 million held in different financial institutions across the globe on its expansion projects.The Toronto-based entity, which is debt-free, said following the implementation of the Indigenisation and Economic Empowerment programme in Zimbabwe, its primary asset was a 49 percent interest in Blanket Mine while indigenous partners own 51 percent.

“Caledonia is debt-free and at nine months to September 30, 2014 had cash of $27.9m held with its bankers in the United Kingdom, Canada and South Africa. Blanket is a low-cost producer,” said the company in a statement.

During the period under review, Blanket mine’s on-mine costs were $599 per ounce of gold produced and its all-in sustaining cost was $972 per ounce of the yellow metal produced.

In line with its expansion programme, Caledonia plans to invest an estimated $70 million at Blanket Mine for the period 2015-2020.

All the capital expenditure will be funded from Blanket’s internal cash flows and existing facilities.

It is hoped that the funding will go towards expansion and infrastructural improvements that would allow an efficient and sustainable production build up for the mine.

Caledonia was also targeting production of about 75,000 ounces of gold per annum by 2021 from inferred resources and additional production of 6,000 ounces of gold in 2021 from proven and probable mineral reserves.

The increased investment pursuant to the revised plan was expected to give rise to production from inferred resources.

Caledonia said the revised plan would improve Blanket’s long term operational efficiency, flexibility and sustainability.

The mining firm said a preliminary economic assessment had been prepared in respect of the inferred resources.

Production at Blanket Mine resumed in April 2009 after a temporary shut-down due to the economic challenges the country went through over the years.

In late 2010, the gold mine successfully completed an expansion project that improved production capacity from 24,000 ounces of gold per annum to 40,000 ounces.