Chronicle Editor
Oliver Kazunga, Senior Business Reporter
THE construction of a 12MW solar power plant at the Gwanda-based gold operation, Blanket Mine, has resumed after Covid-19-induced delays and the target is to meet the second quarter completion deadline.
The US$13 million project is part of the broader mining concern’s strategy to beat power cuts that continue to affect the economy due to depressed generation capacity.
The new project also dovetails with the Government’xs strategy to boost development of green solutions and cost-effective energy sources.
“Progress on the 12MW solar plant has resumed following delays arising from the combined effects of Covid-19 and difficulties with the supply chain,” said Caledonia in an update yesterday.
“The plant is expected to provide approximately 27 percent of Blanket’s total daily electricity demand, improve Blanket’s security of electricity supply and reduce its environmental footprint.
“It is anticipated that the project will be commissioned in June 2022.”
Caledonia chief executive officer, Mr Steve Curtis said year 2021 marked a turning point for their business in operational terms hence the move towards solar was also part of the growth strategy.
“This project, which is expected to yield a modest return to shareholders, is expected to be completed in mid-2022,” he said.
“Operationally, the last 12 months have marked a turning point for the business.
“The Central Shaft has been a huge project costing approximately US$67 million, all funded through internal cashflow and I am delighted that it was commissioned in the first quarter of 2021,” he said.
“Production in the year was 67 476 ounces, which was above the top end of the guidance range and was a new record for annual production.
“The robust operating performance was supported by good cost control and gross profit for the year was US$54,1 million — 16 percent higher than 2020.”
Mr Curtis said cash generated from operations before working capital increased by 17 percent from US$42,4 million to US$49,6 million.
“Now that the Central Shaft is commissioned, we expect further increases in production: guidance for 2022 is a range of 73 000 to 80 000 ounces while from 2023 onwards it is 80 000 ounces — 38 percent higher than in 2020,” he said.
Mr Curtis said Caledonia’s immediate strategic focus is to finish the remaining underground development associated with the Central Shaft project.
The Central Shaft project is expected to increase production, reduce operating costs and increase the flexibility to undertake further exploration and development at depth, thereby safeguarding and enhancing Blanket’s long-term future.
“We also believe there is excellent exploration potential in the older shallower areas of the mine and in brownfield sites immediately adjacent to the existing Blanket footprint,” he said.
Caledonia is consolidating its footprint in Zimbabwe and last year it acquired mining claims at Maligreen in the Midlands.
The latest acquisition is estimated to host a NI 43-101 compliant inferred mineral resource of approximately 940 000 ounces of gold in 15,6 million tonnes at a grade of 1,88 grammes per tonne.
“Our immediate focus on this asset is to improve the confidence level of the existing resource base and we are currently re-assaying historic drill cores,” said Mr Curtis.
“Thereafter, we expect to prepare a feasibility study to commercialise the existing resource before we engage in further exploration on the claims area along strike, at depth and at a previously unexplored zone in the claims area.
“Our approach to new projects is highly disciplined: after further evaluation, the company has decided not to exercise the options to acquire the Connemara North property as it does not meet our investment criteria.”
During the year under review, Caledonia divested non-core assets in the vicinity of Blanket and the mining group continues to evaluate further investment opportunities in Zimbabwe’s gold sector with a view to transforming the firm into a mid-tier, multi-asset Zimbabwe-focused gold producer. — @KazungaOliver
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