Blanket Mine on a solid foundation for growth: Caledonia

Business Reporter

CALEDONIA Mining Corporation says its flagship, Blanket Mine, located in Matabeleland South province, remains on a solid foundation for growth as the group seeks to become a multi-asset gold producer in Zimbabwe.

The Zimbabwe-focused gold producer, announced in 2021 that it was aggressively pursuing its “multi-asset strategy” of acquiring the US$4 million Maligreen project in Gweru from Pan African Mining.

Prior to this, in 2020, Caledonia bought a US$2,5 million option over a gold exploration prospect, Glen Hulme, also in Gweru.

In 2022, the mining group signed a US$53,3 million deal to buy Bilboes Gold Limited in Bubi district, Matabeleland North province, indicating its long-term vision for Zimbabwe.

Caledonia chief executive officer Mr Mark Learmonth noted: “The performance of Blanket remains robust; operating cash flows across the second half of the year show a continuation of the improved operating performance compared to the first half of 2023.

“We continue to see Blanket as the solid foundation for growth as we pursue our strategy to become a multi-asset gold producer.”

Last year, Blanket Mine produced 75 416 ounces of the yellow metal and this was in line with the annual target of between 75 000 ounces (oz) and 80 000oz.

In the fourth quarter of last year, the Gwanda-based gold asset produced 20 172oz.

This year, Caledonia has set a gold production target of between 74 000oz and 78 000oz, and a similar guideline will be maintained in 2025.

“Further encouraging are results from the deep-level drilling programme at Blanket, as announced in January 2024, which is currently evaluating the continuity of the mineralised zones on the Blanket and Eroica ore bodies.

“Total drilling for 2023 was 13 280 metres and this, together with ongoing drilling, will be reflected in a revised mineral resource statement expected to be released in the second quarter of 2024,” he said in a statement released last week.

The firm said the operating and financial performance at Blanket has been in line with management expectations in the first quarter of 2024.

In this context, Caledonia is evaluating the initial results of the ongoing work on revised feasibility studies for Bilboes with specific focus on reducing the initial capital expenditure profile, thereby enhancing the project economics.

The mining group is working towards completing a revised resource statement, thereby extend the life of the mine at Blanket.

In addition, an updated feasibility study on the Bilboes sulphide project to determine the best implementation strategy, estimate the funding requirements and commence development of the project is expected to be completed soon.

Exploration activities at the Motapa project are also continuing.

Meanwhile, Caledonia has pointed out that its quarterly dividend of 14 US cents announced last week reflects management’s confidence in the operations of the business.

“Future dividend payments will reflect operational performance and an assessment of capital allocation.”

The mining group has maintained its quarterly dividend policy adopted in 2014 and the strategy is meant to maximise shareholder value.