OPERATION FOCUS
with effect from September 5, 2012 on the
following basis:
I 16% was sold to the National Indigenisation
and Economic Empowerment Fund
I 10% was sold to a Management and
Employee Trust for the benefit of the present
and future managers and employees of
Blanket
I 15% was sold to identified Indigenous
Zimbabweans
I 10% was donated to the Gwanda Community
Share Ownership Trust.
Blanket also made a non-refundable donation
of $1.0 million to the trust as soon as it was
established and paid advance dividends of $4
million before the end of April 2013. The trust
will receive no further dividends from Blanket
until the advance dividends have been repaid by
the offset of future dividends arising on the
Blanket shares that are owned by the trust.
Caledonia facilitated the vendor funding of
these transactions: ie Indigenous Zimbabweans
who have purchased their interest in Blanket
will repay their outstanding facilitation loan by
sacrificing 80% of their future entitlement to
Blanket dividends.
As an indigenised entity, Blanket can now
develop and implement its long-term growth
strategy.
Zimbabwe has a long and august history in
gold mining but by the end of 2008 all its gold
mines had been forced to close due to the
failure of the Reserve Bank of Zimbabwe (RBZ)
to pay for gold which, under the prevailing
regulations prior to February 2009, required all
gold producers to sell gold to the RBZ. Most of
the Zimbabwean gold mines re-opened in the
course of 2009 following the liberalisation of the
commercial environment for gold producers.
Gold production in 2009 was approximately 5 t
and is estimated to have increased to
approximately 10 t in 2012 and 13 t in 2013.
In the period from October 2008 until Blanket
resumed operations in April 2009, Blanket
continued to pay and provide food and basic
necessities to all of its over 500 employees,
thereby successfully retaining the majority of
the skills embedded in its work force. Current
employee numbers are much higher, at 1,300.
The Caledonia office in Johannesburg, South
Africa provides procurement services to Blanket.
This means that Blanket has ready access to
consumables and specialist technical services at
highly competitive prices.
The Zimbabwean Government recognises that
the mining industry and particularly gold mining
is crucial to the Zimbabwean economy.
Accordingly in February 2009, it relaxed
restrictions on foreign payments, which then
meant it was relatively easier to make payments
of less than $5 million to foreign suppliers,
12 International Mining | JANUARY 2018
lenders and investors
without the requirement
for Central Bank
approvals. However,
currency controls have
been reinstated in light
of the current foreign
currency shortage.
Caledonia receives
remittances from
Blanket in the form of
payments for goods and
services procured by
Caledonia on behalf of
Blanket; a management
fee payable by Blanket
to Caledonia; payments of dividends from
Blanket to Caledonia and the repayment of
facilitation loans which were extended by
Caledonia to the Indigenous Zimbabweans who
acquired shareholdings in Blanket.
In January, 2014 Caledonia announced that as
a result of new regulations introduced by the
Zimbabwe Ministry of Finance, all gold produced
in Zimbabwe must now be sold to Fidelity
Printers and Refiners, a company which is
controlled by the Zimbabwean authorities and
which is now responsible for the final refining
and marketing of all gold produced in
Zimbabwe. Accordingly, all of Blanket’s
production has subsequently been sold to
Fidelity. Blanket receives 98.75% of the value of
the gold within a maximum of seven days of a
sale to Fidelity. Blanket has received all
payments due from Fidelity under these new
arrangements in-full and on-time.
Since it completed the purchase of the
Blanket mine, Caledonia has allowed Blanket to
make considerable capital investments in its
underground, surface and township facilities.
These investments culminated in the
commissioning of the No 4 Shaft Expansion
Project at the end of September 2010 which
increased Blanket's hoisting capacity from the
No 4 Shaft from 500 to 3,000 t/d.
Gwanda Greenstone
Blanket mine is situated in the Gwanda
Greenstone Belt, a typical Archaean greenstone-
hosted gold deposit and was first established in
1904. The deposit is situated on the northwest
limb of the Gwanda Greenstone Belt along strike
from several other prominent gold deposits.
Blanket is the largest producing mine in a belt
which at one time had 268 operating mines.
The Belt extends 80 km in an east-west
direction and consists predominantly of basaltic
rocks (greenstones) with minor felsic and
ultramafic units. The belt has been intensely
sheared and intruded by granites resulting in
complex deformation structures and vertically
In October 2011 Blanket received two
prestigious safety awards. Blanket's
Occupational, Safety and Health (OSH) policy
and procedures have been audited by the
National Social Security Authority (NSSA). The
NSSA is a public institution in Zimbabwe and
was established as an initiative of the
Government of Zimbabwe with the objective of
introducing social protection to Zimbabwean
workers and their families. The NSSA audit
covered inter alia, Blanket's OSH policies,
procedures, training and management systems.
As a result of this audit, Blanket was awarded
the gold medal in the Mining and Quarrying
sector in Matabeleland and also the bronze
medal across all industrial sectors in Zimbabwe
dipping strata. The shape of the gold orebodies
is controlled by these structures, resulting in
their near vertical orientation.
Near vertical shear zones are developed
throughout the belt and are the loci of most of
the small mines that have been discovered in
the area. Most of Blanket's prospects are of this
type.