RSS 2.0 FeedMay 2011 Vol 33, Mining and Industry Indaba
Electricity black-outs a thing of the past: Caledonia Mining
Caledonia is continuing to ramp up production at the Blanket gold mine to an annualised 40,000 ounces a year, while reducing the cash costs to below $550 an ounce
Caledonia is continuing to ramp up production at the Blanket gold mine to an annualised 40,000 ounces a year, while reducing the cash costs to below $550 an ounce
Caledonia Mining Corporation this morning revealed it now has the ability operate independently of the electricity grid in Zimbabwe.
It follows the successful commissioning of the 10 MVA generating plant at the company’s producing Blanket gold mine.
The installation gives the group the ability to carry on surface and underground operations in the event of blackouts.
Although the supply to the mine has been good in recent months there is immense pressure on the Zimbabwe electricity grid, which can struggle to cope with household and industrial demand.
During peak demand times, particularly when the nation’s tobacco crop is being harvested and processed, it is not uncommon for the supply to be shut down for up 12 hours a day.
While the use of the new back-up power plant will inevitably lead to an increase in the cash cost of mining at Blanket, they will be minimal compared with the financial impact of lost production.
Caledonia is continuing to ramp up production at Blanket to an annualised 40,000 ounces a year, while reducing the cash costs to below $550 an ounce.
The first quarter results showed the company is heading in the right direction. Output was 7,322 ounces of gold, while costs fell 18 per cent to $648 an ounce.
In doing this the company generated around $4.7 million in cash in the three months to March 31while posting pre-tax profits of just over $3 million.
Caledonia is self-funding, which is a novelty in the junior mining sector. And this is crucial because the group has some ambitious plans and aims to be producing 100,000 ounces of gold a year by 2015.
Before it can do this it needs to increase its reserves and resources, which at the anticipated production rate gives Blanket at least a 13-year mine life.
It is currently sinking one new shaft and rehabilitating three others on two of its highly prospective brown-field satellite zones – GG, which is seven kilometres from Blanket’s metallurgical plant, and the Mascot Project Area, which is 42 kilometres away.
Caledonia also isn’t ignoring the potential of the Blanket Mine footprint itself.
It is developing the 22-Level Haulage, which is essentially a horizontal tunnel 750m below surface that will provide access for further exploration of the up-dip and down-dip extensions of the mine’s known main ore bodies above and below this depth.
This is a much faster and cheaper approach to exploration than drilling all the way from surface.
Any incremental ore produced from Blanket and its satellite properties could be immediately processed without any requirement for new investment in its existing metallurgical plant, due to the substantial surplus capacity.
This busy round of resource development activity should lead toa revised43-101 compliant resource statement possibly towards the end of 2012. Caledonia has set aside US$4 million for exploration at Blanket this year and early next.
The company’s Nama mining licences in Zambia’s copperbelt shouldn’t be ignored in all of this for they are a potentially huge value driver.
Caledonia has a large scale, long-termmining licencescovering approximately 800 square kilometres in one of the world’s premier locations for both cobalt and conventional copper-belt type mineralisation.
In fact one of those mining licence areas borders onto the world class Konnococopper property being developed jointly by Brazilian giant Vale and African Rainbow Minerals, a South African mining company, and is currently capitalised at around US$4billion.
They are currently investing a massive US$400 million in their neighboringKonkola North Copper Mine and expect to be in production by 2013.
In terms of this type of copper mineralisation,Caledonia’s immediate plans are more modest by comparison. It is initially drilling four holes on its Konkola East target at a cost of US$1.3m.
Subject to the drilling results and board approval, a second programmewill be focused either on defining this target to a 43-101 compliant stageor an initial program of holes on its second copper-belt target, Kafwira, which lies about 20 kilometres northwest of the Konkola East target.
However, the company won’t be drawn any further on this aggressive exploration plan until the results of these holes are known. An update should come in the summer when all the initial holes are drilled.
Source: ibtimes
Caledonia Mining Corporation this morning revealed it now has the ability operate independently of the electricity grid in Zimbabwe.
It follows the successful commissioning of the 10 MVA generating plant at the company’s producing Blanket gold mine.
The installation gives the group the ability to carry on surface and underground operations in the event of blackouts.
Although the supply to the mine has been good in recent months there is immense pressure on the Zimbabwe electricity grid, which can struggle to cope with household and industrial demand.
During peak demand times, particularly when the nation’s tobacco crop is being harvested and processed, it is not uncommon for the supply to be shut down for up 12 hours a day.
While the use of the new back-up power plant will inevitably lead to an increase in the cash cost of mining at Blanket, they will be minimal compared with the financial impact of lost production.
Caledonia is continuing to ramp up production at Blanket to an annualised 40,000 ounces a year, while reducing the cash costs to below $550 an ounce.
The first quarter results showed the company is heading in the right direction. Output was 7,322 ounces of gold, while costs fell 18 per cent to $648 an ounce.
In doing this the company generated around $4.7 million in cash in the three months to March 31while posting pre-tax profits of just over $3 million.
Caledonia is self-funding, which is a novelty in the junior mining sector. And this is crucial because the group has some ambitious plans and aims to be producing 100,000 ounces of gold a year by 2015.
Before it can do this it needs to increase its reserves and resources, which at the anticipated production rate gives Blanket at least a 13-year mine life.
It is currently sinking one new shaft and rehabilitating three others on two of its highly prospective brown-field satellite zones – GG, which is seven kilometres from Blanket’s metallurgical plant, and the Mascot Project Area, which is 42 kilometres away.
Caledonia also isn’t ignoring the potential of the Blanket Mine footprint itself.
It is developing the 22-Level Haulage, which is essentially a horizontal tunnel 750m below surface that will provide access for further exploration of the up-dip and down-dip extensions of the mine’s known main ore bodies above and below this depth.
This is a much faster and cheaper approach to exploration than drilling all the way from surface.
Any incremental ore produced from Blanket and its satellite properties could be immediately processed without any requirement for new investment in its existing metallurgical plant, due to the substantial surplus capacity.
This busy round of resource development activity should lead toa revised43-101 compliant resource statement possibly towards the end of 2012. Caledonia has set aside US$4 million for exploration at Blanket this year and early next.
The company’s Nama mining licences in Zambia’s copperbelt shouldn’t be ignored in all of this for they are a potentially huge value driver.
Caledonia has a large scale, long-termmining licencescovering approximately 800 square kilometres in one of the world’s premier locations for both cobalt and conventional copper-belt type mineralisation.
In fact one of those mining licence areas borders onto the world class Konnococopper property being developed jointly by Brazilian giant Vale and African Rainbow Minerals, a South African mining company, and is currently capitalised at around US$4billion.
They are currently investing a massive US$400 million in their neighboringKonkola North Copper Mine and expect to be in production by 2013.
In terms of this type of copper mineralisation,Caledonia’s immediate plans are more modest by comparison. It is initially drilling four holes on its Konkola East target at a cost of US$1.3m.
Subject to the drilling results and board approval, a second programmewill be focused either on defining this target to a 43-101 compliant stageor an initial program of holes on its second copper-belt target, Kafwira, which lies about 20 kilometres northwest of the Konkola East target.
However, the company won’t be drawn any further on this aggressive exploration plan until the results of these holes are known. An update should come in the summer when all the initial holes are drilled.
Source: ibtimes
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