Caledonia moots US31m expansion projects

Zim Now Writer

Victoria Falls Stocks Exchange-listed Caledonia Mining has earmarked US$31 million for expansion, of which US$28.8 million has been allocated to its flagship Blanket Gold Mine in Gwanda, Matabeleland South Province “for various capacity expansion and efficiency initiatives”.

The remainder will be deployed on a feasibility study on the Bilboes sulphides project and exploration at Maligreen.

“Capital expenditure at Blanket in 2023 includes approximately US$9,6 million in respect of a new tailings facility (reflecting tightened regulatory requirements) and a further US$9,8 million of deep-level capital development so that operations can be maintained in future years,” said Caledonia in its latest production guidance, adding that US$2 million would be spent on its Bilboes mining project.

“It is anticipated that the cost of the projected capital expenditure for the group will be met from operating cashflows and in-country borrowings,” Caledonia said.

Zimbabwe’s gold output for 2022 reached a record 35,38 tonnes, a 19 percent increase from 2021, according to statistics from Fidelity Gold Refiners, a subsidiary of the Reserve Bank of Zimbabwe which buys all the country’s gold.

This was achieved largely due to a combination of monetary incentives and new mining projects in the sector.

Caledonia in 2014 announced its plan to sink a new shaft (Central Shaft) to 1 200 metres from surface, all funded through internal cash flow, which was targeted to push annual output to 80 000 ounces.

Blanket Mine, however, marginally surpassed that target to achieve 80 775. The Group has set an overall production of 87 500 ounces to 97 000 ounces for 2023, of which its recently acquired Bilboes Mine is expected to contribute between 12 500 oz to 17 000 oz.

“Production guidance for 2023 assumes that Blanket (mine) will broadly maintain the production rate achieved in 2022. (The) 2023 guidance also includes the estimated production from the small oxides project at Bilboes, where mining activity is expected to commence in February, and we expect to extract gold from the heap leach process in March,” said Caledonia chief executive Mark Learmonth.