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Business Reporter

CALEDONIA Mining Corporation expects its gold production capacity in Zimbabwe from about 75 000 ounces to 250 000oz annually, after the mining group set its sights on becoming a multi-asset gold company in the country.

With Blanket Mine currently the group’s current active major asset in Zimbabwe, Caledonia is confident it will reach the new target within three years.

Beyond Blanket Mine in Matabeleland South Province, the group’s target is to evolve into a multi-asset company in the local gold mining sub-sector. 

Blanket Mine last year produced a record high 75 416oz in line with the group’s annual target of between 75 000oz and 80 000oz.

Gold is Zimbabwe’s largest export earner. 

The Southern African country has a target of 40 tonnes this year, after output reached an all-time high of 35 tonnes in 2022, but slowed down to 30t in 2023.

Caledonia group chief executive officer Mark Learmonth said: “Caledonia’s vision has evolved over the last couple of years from being a relatively small operator of a single asset towards a strategy focussed on becoming a multi-asset, Zimbabwe focussed gold producer with an ambition to produce over 250 000oz of gold per annum.”

He said the acquisition of Bilboes Gold Limited in Bubi District, Matabeleland North Province in January last year, builds on the earlier acquisitions of Motapa and Maligreen to create a portfolio of high-quality exploration and development assets in Zimbabwe.

The Bilboes project was acquired for US$53,3 million while in 2021 Caledonia paid US$4 million to acquire the Maligreen asset in Gweru from Pan African Mining.

In 2020 the Zimbabwe-focused gold producer bought a US$2,5 million option over an exploration prospect, Glen Hulme, also in Gweru. Mr Learmonth said the operating and financial performance at Blanket Mine was in line with management expectations in the first quarter of this year.

Thus Caledonia is evaluating the initial results of the ongoing work on revised feasibility studies for Bilboes with a specific focus on reducing the initial capital expenditure profile to enhance the project’s economics.

The mining group is working on completing a revised resource statement to extend the life of mine at Blanket.

“We are highly encouraged by the results from the underground exploration programme at Blanket which we restarted during the year; in general, the drilling results, which we announced in July 2023 and January 2024, indicated significantly better widths and grades than previously modeled and we expect to publish a revised resource statement in the second quarter of 2024 which should incorporate an increase in Blanket’s life of mine,” he said.

The mining concern anticipates announcing the results of the updated feasibility study for the Bilboes sulphide project soon and the future inclusion of the asset in the group’s production file is expected to deliver greater shareholder value.