Blanket Mine targets further gold ramp up

Published: 10 April 2014

Toronto Stock Exchange-listed Caledonia Mining Corporation plans further investment in Blanket Mine to ramp up production to 52 000 ounces per annum by next year.

Already, Caledonia is confident it will achieve its 2014 production guidance of 48 000oz and contends more investment will increase production beyond 52 000oz by 2015.

"Investment continues at Blanket with the objective of increasing production to 48 000 ounces of gold in 2014 and 52 000 ounces of gold in 2015," said Caledonia.

Blanket also continues to make substantial investments in exploration and development projects with a view to raise output above 52 000 ounces per annum in due course.

Plans to take production up to 76 000oz annually by 2016 are already in place, and the company has C$25 million capital reserve, which it is now looking to deploy.

Caledonia revealed plans to ramp up production to 52 000oz next year when its board of directors announced this week that it has declared a dividend of one and one half Canadian cents ($0,015) on each common share issued and outstanding.

Caledonia remains confident it will achieve its target of 48 000oz of gold at 49 percent owned gold mine in Gwanda despite a 7 percent fall in output in the first quarter.

Targeted gold production (at Blanket Mine) for 2014 is maintained at 48 000 ounces," Caledonia said after first quarter output came in lower at 10 6070z from 11 429oz in 2013.

A total of 10 607oz were produced during 2014 first quarter (10 472oz in Q1 2013), representing a 7,2 per cent decrease on the gold output in Q4 2013 (11 429oz).

Production in the first quarter 2014 was affected by achieved grade being lower than the targeted grade of 3,83 g/t.

This was due to a sub-horizontal fault encountered at the South ore body between 680 and 695 meters below surface, which had displaced ore zone to the west and south.

Production on the panels was stopped and re-development was required to establish other panels at the required grade and the measures have been a success.

Caledonia believes that the measures undertaken have been successful and that an average head grade of between 3,6g/t Au to 3,83g/t Au is expected to be maintained, with closer attention paid to grade quality in future.

Production was also adversely affected in February 2014 by an unstable mains power supply and by the unscheduled requirement to replace the winding rope on shaft 4.
- The Herald