Tinashe Makichi
New York Stock Exchange-listed Caledonia Mining Corporation will commission its Central Shaft expansion project at its Zimbabwean mining unit-Blanket Mine during the fourth quarter of 2020, the company has announced.
The US$18 million Central Shaft expansion project is a transformational project for the company aimed at extending an additional 250 metres in depth including development on 34 and 38 levels which will potentially secure Blanket Mine’s operating future for the next 20 years taking exploration potential into account.
“We expect the Central Shaft to be commissioned in the fourth quarter of 2020; thereafter we look forward to further increases in operating cash flow as production increases to the target rate of 80,000 ounces of gold per annum from 2022, as capital expenditure falls further and we begin to realise the operational efficiencies arising from the new shaft,” said Caledonia chief executive Steve Curtis.
He said as the mining group approaches the end of its five-year investment programme at Blanket Mine, there is anticipation that the rate of capital expenditure will begin to reduce from the middle of 2020, which gives the company greater flexibility to consider deploying some cash reserves on an increased dividend for shareholders.
The mining group however this week declared an increased quarterly dividend of US$0.075 on each of the company’s common shares.
“I am pleased to announce a 9.1 per cent increase in the dividend which reflects our increased confidence in the outlook for our business.
“As we reported in mid-November 2019 when we published the results for the third quarter of 2019, our financial performance has improved due to increased production and the continued higher gold price. This improvement has continued through the final quarter of 2019,” said Curtis.
Caledonia’s primary asset is a 49% interest in an operating gold mine in Zimbabwe where in November 2018, Caledonia the mining group announced the signing of a legally binding sale agreement to increase its holding in Blanket Mine to 64%, subject to receipt of, amongst other things, regulatory approvals.
Blanket Mine plans to increase production from 54,511 ounces of gold in 2018 to approximately 75,000 ounces in 2021 and approximately 80,000 ounces in 2022.
