New central shaft sets Blanket Mine a step above the rest

The recent official commissioning of the US$67 million new Central Shaft project at Blanket Mine in Gwanda, Matabeleland South, brings to the fore three critical observations about the prospects for the country’s mining sector and the economy in general.

The first one is that the multi-million-dollar gold project by Caledonia Mining Corporation, is a strong expression of growing investor confidence in Zimbabwe as a favourable destination for business.

Secondly, it buttresses the significance of expanding exploration investments across different mineral segments and deepening shaft levels to higher resource concentration so as to increase output and widen job opportunities.

Thirdly, the project has magnified in a big way the high-quality standards exhibited by local engineers who were 100 percent behind its implementation.

Caledonia Mining Corporation is listed on the New York Stock Exchange (NYSE), AIM of the London Stock Exchange and recently on the Victoria Falls Stock Exchange (VFEX) in Zimbabwe.

President Mnangagwa officially commissioned the new Central Shaft project two weeks ago, as well as the 12.2 megawatts solar project established at a cost of about US$14 million.

The Central Shaft project is a significant step-up in the company’s operations, said chief executive officer, Mark Learmonth.

Being one of the flagship projects under the country’s drive to achieve a US$12 billion mining milestone target by 2023, the objective of the Central Shaft was to provide access to the deeper mineral resources and enable the company to increase production and extend the mine life.

The project started in 2015 and was completed in 2021 at a cost of about US$67 million all funded through internal cash flows.

“The result is one of Zimbabwe’s deepest gold mine shafts, going down to 1,200 metres from surface,” said Learmonth.

Caledonia’s journey comes a long way before reaching such a milestone achievement, which is already paying dividend in the form of increased output, higher employment capacity and exports.

“When Caledonia purchased Blanket Mine in 2006, production was less than 6,500 ounces. Now, thanks to the Central Shaft, Blanket produced 21,120 ounces in the third quarter of 2022,” said Learmonth.

“We have more than tripled our production rate. I’m optimistic that Blanket could increase production further depending on exploration success.

“This growth benefits all stakeholders in Blanket Mine through increased employment, higher profitability and enhanced contributions to the fiscus.”

According to the company, the new Central Shaft project was delivered by a “100 percent” Zimbabwean workforce.

Although shaft-sinking is a dangerous business, Learmonth said management was delighted to report that the safety record for the project was excellent.

“This performance gives us great confidence as Caledonia continues to invest in the country and prepares to develop other projects in Zimbabwe,” he said.

“All this shows Caledonia’s commitment to Zimbabwe and the community around us. Over 2,000 Zimbabweans work at Blanket Mine and we have a very strong connection with the community.”

Buoyed by the successes at Blanket Mine, Caledonia Mining Corporation has set its focus on expanding its investment footprint by acquiring new mining assets in different parts of the country.

For instance, in November last year Caledonia acquired the Maligreen claims in Gweru, Midlands Province, which already contain about one million ounces of gold.

In July this year the group also signed an agreement to purchase the Bilboes Gold Project near Bulawayo. “Completion of this transaction is still subject to certain conditions,” said Learmonth.

“Bilboes has approximately 2.5 million ounces of gold and a feasibility study indicates the potential for an open-pit gold mine producing an average of 168,000 ounces per year over a 10-year life of mine.”

Most recently, Caledonia purchased Motapa, an early-stage project next to Bilboes.

Learmonth said while Motapa does not yet have a formal resource, the company was convinced it is highly prospective and is strategically important to the group’s growth ambitions in Zimbabwe in terms of location and scale.

“Blanket, plus Bilboes, plus Maligreen plus Motapa gives Caledonia a trajectory to grow into a multi-asset, Zimbabwe-focussed gold miner producing up to half a million ounces of gold per annum (nearly 17,000 kilogrammes),” he added.

Zimbabwe currently produces approximately 30 000kgs or 30 tons of gold per annum.

In the last few years, Blanket has not only distinguished itself as a strong gold producer but has gone further to empower the surrounding community and workers through different projects.

Learmonth said the Gwanda community and workers own a combined 20 percent of Blanket Mine shares hence they equally benefit from the company’s growth and success.

He said the already has an established Corporate Social Responsibility (CSR) strategy, which contributes significantly towards projects and initiatives in the Gwanda community.

These are focussed on the pillars of health, education, environment, agriculture, women, youth empowerment and charity.

During the official commissioning event, President Mnangagwa specifically commended the company for building decent and quality accommodation for its workers.

In his report, Learmonth told the President and his delegation that at the height of the Covid-19 pandemic, Blanket Mine constructed and equipped the specialist Phakama Clinic Isolation Centre and has continued to support the clinic with essential supplies, equipment and personal protective equipment.

“Caledonia also contributed towards the national Covid-19 fundraising. We believe in education as a tool to improve lives and many of our employees’ children are educated at the local schools,” said Learmonth.

“In 2021 Blanket Mine assisted in renovating Sabiwa High School, which included the construction and equipping of a new computer and science lab as well as other school infrastructure.”

In a bid to reduce reliance on the national power grid and buttressing environmental consciousness, he said Caledonia resolved to build its 12.2-megawatt solar plant at a cost of US$14 million.

The solar plant was connected to the Blanket grid two weeks ago and is expected to provide approximately 27 percent of the mine’s total daily electricity demand and improve security of power supply to the mine.

Learmonth said listing of Caledonia Mining on the VFEX last year not only strengthens its commitment to Zimbabwe but has also provided a platform for more local participation in the business.

The company has commended the Government for its continued efforts to make Zimbabwe a more attractive mining destination, whose positive results are being evidenced by expanding mining output as well as Zimbabwe’s recent shortlisting as one of the most improved mining jurisdictions by the London-based Mines and Money awards.

While more work still needs to be done to restore Zimbabwe as one of Africa’s major gold producers, Learmonth said Caledonia was committed to playing its part by increasing production, creating more jobs and positively impacting local communities.

“We look forward with optimism as Caledonia pursues the exciting opportunities ahead, with our long-term vision of becoming a multi-asset gold producer in Zimbabwe,” he said.-ebusinessweekly