OPERATION FOCUS
Blanket gold
John Chadwick looks at a historic, centurion
Zimbabwean mine, with a great sustainable mining
reputation, being upgraded and expanded with
mechanisation and its concomitant benefits
ast July, Caledonia Mining Corp's common
shares were listed on the NYSE American
stock exchange. At the time, Steve Curtis,
CEO, stated: “This listing for the company on
the NYSE American is another significant step
for Caledonia which joins some of the world's
best-known gold and precious metals
companies with a listing on this prestigious US
exchange. This further step in the development
of Caledonia's corporate status has taken place
against the backdrop of continued progress on
our major operational development projects,
principally the sinking of the Central Shaft at the
Blanket mine in Zimbabwe.
“The Central Shaft, which is being funded
from Blanket's internal resources, is expected to
fundamentally change the nature of Blanket's
operations by improving operating efficiencies
and providing access to deeper levels for
exploration, development and production.
Completion of the Central Shaft remains on
schedule for the fourth quarter of 2018.
“The listing on the NYSE American is intended
to provide the company with greater access to
US institutional and retail investors which in
turn is hoped will result in better overall trading
liquidity, a lower cost of capital and other
benefits for Caledonia and its shareholders”.
L
Those shareholders include many residents
local to the mine and mine workers.
Blanket plans to increase production from
50,351 oz in 2016 to approximately 80,000 oz in
2021.
Caledonia acquired Blanket from Kinross Gold
in April 2006. Following the implementation of
indigenisation with effect from September 5,
2012, Caledonia now owns 49% of Blanket, a
well-established gold mine, which currently
operates at a depth of approximately 750 m
below surface. Blanket also holds brownfield
exploration and development projects both on
the existing mine area and on its satellite
properties which are within trucking distance of
the Blanket metallurgical recovery plant.
Blanket mine is located in the southwest of
Zimbabwe approximately 15 km west of
Gwanda, the provincial capital of Matabeleland
South. Gwanda is 150 km southeast of
Bulawayo, the country's second largest city and
196 km northwest of the Beit Bridge Border post
with South Africa, and 560 km from Harare.
Access to the mine is by an all-weather tarred
road from Gwanda, which is linked from Beit
Bridge to Bulawayo and Harare by a national
highway.
Zimbabwe had an excellent infrastructure
system of good roads, railways and electricity
generation. Lack of investment over the last 10
to 15 years means that much of the general
infrastructure in Zimbabwe has deteriorated and
substantial investment will be required to rectify
and remediate it. Notwithstanding the general
deterioration of the country, Blanket has
adequate access to the specific infrastructure it
requires in order to operate efficiently.
Zimbabwe's national highway system remains
serviceable and most of Blanket's consumable
and equipment supplies are transported to the
mine by road from Johannesburg. Blanket has
funded the maintenance of the minor road that
connects the mine to the national highway and
heavy goods vehicles can easily access the mine
without impediment throughout the year.
To address the national problem of
considerable interruptions to power supplies,
Blanket installed four, Caterpillar 3516 B 2500
kVA generators fully automated through a
SCADA system. These allow the mine and all of
the metallurgical operations to run normally
during any interruption to the main electricity
supply. In addition, Blanket has entered into an
un-interruptible power supply agreement with
the state-owned electricity supplier. Although
the power supplied in terms of this agreement is
more expensive than previously, it is substantially
cheaper than the electricity generated by the
stand-by diesel generators. Following the
conclusion of the un-interruptible power supply
agreement, the frequency of power interruptions
has diminished to an acceptable level.
Sustainable mining
Caledonia Mining is well placed to benefit from Zimbabwean opportunities. There is worldclass gold
potential in the country, but it is under explored and under-capitalised
10 International Mining | JANUARY 2018
Much of Zimbabwe’s social infrastructure
(eg water treatment and healthcare) has
deteriorated making outbreaks of illness such
as cholera and typhoid amongst the general
population more likely. The majority of Blanket's
employees live with their dependants on the
Blanket mine village where they are provided
with potable water (treated at Blanket's on-site
treatment facility) and healthcare facilities.
Despite the country’s problems and a chronic
shortage of funding in recent years, the general
levels of education in the Zimbabwean
workforce are very high and this is reflected in
Blanket's well-educated and highly skilled
workforce.
The indigenisation of the operation was
achieved by various transactions implemented