11 January 2013

Zimbabwe: Blanket Mine to Invest U.S.$ 37 Million

Blanket Mine plans to invest a total of US$37 million between 2013 and 2017 to raise gold output to an annualised 76 000 ounces.

In a statement, the group said the capital investment would be funded entirely from Blanket's internal cash flows.

Blanket Mine, which is a low- cost producer, will process substantial volumes of additional ore with only a modest investment required to upgrade the existing crushing and milling circuits.

The group said it has already started development of the existing ore resources above and below the current lowest mining level - 750m- which will produce an additional 36 000 oz per annum of gold by 2016.

About 12 000 oz is plann-ed to start in the first quarter in 2014, which will move to 24 000 oz in the fourth quarter in 2015 from the Winze project.

"This will result in a combined 90% increase to 76 000 oz pa from Blanket's targeted 2013 gold production of approximately 40 000 oz," the statement said.

The group also said increased production was expected to come from the first three of Blanket's portfolio of 18 satellite properties which are expected to commence production in the fourth quarter of 2013.

"The eventual rate of production from these properties will be determined by the success of on-going exploration and mining development work. Production from these properties has not been included in the 76 000 oz gold target as the resources are undefined at present," the company said.

Blanket holds 18 licenced satellite exploration properties, the furthest of which is 42 km from Blanket's plant, on which there has been some small-scale historic gold mining activity. Any ore mined from the satellite properties will be crushed and transported to Blanket for processing at Blanket's metallurgical plant.

Three satellite properties, GG, Mascot and Eagle Vulture, are currently undergoing exploration and underground development work.

GG and Mascot are expected to commence production in the fourth quarter of 2013 whilst production at Eagle Venture is anticipated to commence in early 2015. The eventual production rate from GG, Mascot and Eagle Vulture and their life-of-mine will be determined once exploration and development work and metallurgical test-work on the mined mineralisation has been completed and a resource base has been identified.

Two further satellite properties have been identified for near-term development: Abercorn, which is approximately 20km from Blanket, and Sabiwa, which is adjacent to Blanket but is not connected to Blanket's underground infrastructure. The combined budgeted investment at Sabiwa and Abercorn for 2013 is US$1,269 million with further investment of US$4,5 million projected for the four years 2014 to 2017.

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