23 November 2012

Zimbabwe: Blanket Mine Projects 70 Percent Increase in Output

CALEDONIA's Blanket Mine forecasts a 70% increase in gold production by 2015 following the commencement of new exploration projects and approval of a five-year development plan by board members.

The company said it had started work at its number six Winze project to access resources below 750 metres.

It said future improvements in production depended entirely on the outcome of underground exploration and development which were expected to increase capacity.

The projects, which include the five-year development plan, will be financed from Blanket mine's internal resources.

The mine recorded a new all-time high in gold output of 12 918 ounces in the third quarter of this year, 12% higher than the 11,560 ounces produced in the quarter to June 30, and 33% higher than the 9 743 ounces produced in the third quarter last year.

As a result, the company proposed to pay an initial dividend of 5US cents per share as an appropriate way to optimise its capital structure and enhance shareholder value.

Caledonia recently complied with the country's indigenisation laws which saw the appointment of a new board of directors for the company comprising representatives of indigenous Zimbabwean shareholders.

The new board has already approved a capital investment programme for 2013 and a four-year growth strategy for 2014 to 2017.

In the nine months to September 30 2012, Blanket paid a total of US$19,7 million in royalties, taxation and other non-taxation charges to government as well as payments to community and social projects not directly related to the operation of the mine.

The mine's gross profit in the third quarter surged 25% to US$12,6 million compared to US$10,6 million in the quarter ended June.

Gold sales were at an average price of US$1 673 per ounce compared to an average price of US$1 599 per ounce in the preceding quarter and an average of US$1 737 per ounce in the comparable quarter last year.

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