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Caledonia Mining Corporation says it retains plans to dispose of non-core operations and focus on boosting the capacity of its main asset, the Gwanda-based gold producer Blanket Mine.

The Blanket gold mine is Caledonia’s primary asset in which it has a 49 percent interest after fully complying with Zimbabwe’s indigenisation law.

Without specifying the “non-core operations” that will be sold, Caledonia chairman Mr Leigh Wilson said that the disposal will help the group reduce operating costs while Blanket’s expansion forges ahead.

“2014 was a year of substantial change and significant progress for Caledonia. It reflects a sustained effort by your board to sharpen the company’s focus on its primary operation and to close and dispose of non-core operations, thereby reducing operating expenses,” said Mr Wilson in a statement he will give at the mining group’s annual general meeting this Thursday.

The chairman added that the current expansion at Blanket Mine is going according to plan.

Last year, the group announced plans to excavate a new central shaft to an investment of $70 million, a development that will double the gold producer’s output.

In 2014, the mine produced 41 800 ounces of gold.

“The ongoing implementation of the Revised Life of Mine Plan, announced in November 2014, is progressing well. It is designed to increase production and extend the mine life of the Blanket Mine.

“Successful implementation of the plan will also improve Blanket’s operational efficiency, re-enforce its position as one of Africa’s lowest-cost gold producers and create a platform for Blanket’s long-term development,” he said.

Blanket remain “cash generative” despite challenges in the broader mining sector, said Mr Wilson.

“Your board believes Caledonia can look to the future with confidence and we are gratified that the Blanket Mine remains cash generative in the current adverse market conditions.”

Meanwhile, Caledonia will — at its Thursday AGM — ask shareholders to vote on a new Omnibus Incentive Compensation Plan (OICP) for executive management, which will largely be dependent on the performance of the Blanket Mine.

“The performance objectives of the awards that the board intends to grant under the OICP will be aligned strongly with long-term shareholder interests.

“The board intends to grant awards that will reward management for specific and measurable performance objectives that are embodied in, and compatible with, objectives of the Revised Life of Mine Plan.

“These objectives include increased production, total cash generation and growing the resource base,” said Mr Wilson. — BH24.