Caledonia Mining (CAL-T, CMCL-L) says total gold production for 2011 more than doubled at its Blanket mine in southwestern Zimbabwe, pushing its stock up nearly 9%.
For 2011 the company produced 35,826 oz., or a 102% increase compared to the previous year. About 10,533 oz. of last year’s total was recovered in the fourth quarter of 2011, representing an 8.1% boost in production over the third quarter, and a 69% jump from the year-ago quarter.
For this year, the Africa-focused miner expects to generate 40,000 oz. from its only producing mine, located 130 km south of Bulawayo, the country’s second-largest city, and 15 km northwest of Gwanda, the provincial capital of Matabeleland South.
The producer embarked on several initiatives to both sustain and improve operations at the Blanket gold mine, which first started production in 1906, and has since recovered more than one million oz.
The company acquired the mine, which includes 225 claim blocks covering 25.4 sq. km in the northwestern limb of the Gwanda greenstone belt, from Kinross Gold (K-T, KGC-N) in April 2006. The belt once hosted around 268 producing gold mines, but only a few operate today.
During the fourth quarter of 2011, the company continued working on the 14, 18 and 22 level underground haulages, which should be completed by March. The program is essential to support and maintain the increased underground production at Blanket, notes Caledonia.
Along with that, the company carried out rectification and maintenance work on the 825-metre deep No. 4 shaft, which it started last November and anticipates finishing this February.
Once the upgrade is completed, the speed of the No. 4 shaft winder will increase, which in turn will boost hoisting capacity.
Caledonia says the maintenance may temporarily reduce gold production this quarter.
The company commissioned the installation of an automatic cyanide measuring and dosing system on the carbon-in-leach circuit to reduce cyanide usage per tonne, and added a belt scale on the No.1 conveyor belt to record tonnages delivered from different ore sources. The reprogrammed computerized recording system is expected to be commissioned shortly.
Caledonia says it is still in talks with the Zimbabwean government regarding an indigenization plant for the gold mine.
As of Dec. 31, 2010, reserves at the mine, including stockpiles, stood at 3.8 million tonnes grading 3.78 grams gold per tonne for 467,200 oz. It has another 510,000 tonnes at 3.79 grams gold for 62,100 oz. in the measured and indicated category. The estimate used a gold price of US$1,100 per oz.
After releasing the 2011 operating results, the company’s shares gained 8.7% to close on Jan. 24 at 12.5¢ apiece, within a 52-week price range of 6¢–15¢.
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