Caledonia Mining to use 70m Investment to Double Gold Output at Blanket Mine

Caldeonia Mining announced plans for a 70 million dollar expansion of their Blanket Mine located in Zimbabwe's Matabeleland South Province.

The mine has a projected output of 40,000 ounces this year but the company expects to increase that output to around 75,000 by 2021.

Caledonia Mining is publicly traded on the Toronto and AIM exchanges and the company owns 49% of the Blanket Mine.

The company stated that the expansion efforts were actually part of a plan to cut operating costs and smooth infrastructure problems of the mine.

The proposed investment will be issued in two phases, with an initial infusion of 50 million dollars between 2015 and 2017 and another 20 million dollars dispersed from 2018 to 2020.

The funds will be sourced internally and the majority of the gold will come from current output estimates.

Much of the funding will be used to construct a Central Shaft for the mine, which will allow increased exploration and improve efficiency.

Caledonia CEO Stefan Hayden said in a press release that "The Central Shaft will also enhance the Mine's operational flexibility by reducing its current dependence on a single production shaft and give it the flexibility to continue to explore and develop at depth,"

The operation is expected to add around 400 permanent jobs for Zimbabwe and is one more vote of confidence from the mining industry for the country, which has recently instituted a new policy of “indigenization” where they force foreign owned miners and banks to cede control of their operations to the government.