Caledonia Mining Corporation complete equipping phase of central shaft

Caledonia Mining

Caledonia Mining Corporation Plc (LON:CMCL) has announced that the phase of fully equipping the Central Shaft from its base to the surface collar is now complete and it is on track to be commissioned in the first quarter of 2021. This has been completed considerably below budget and within a time frame to underpin the Company’s expectation of delivering production of 80,000 ounces of gold in 2022.

Key features of the Central Shaft project since the start on 3 August 2015 include:

·    Safety: 1,850 fatality free shifts with only two lost time injuries (LTI); 920 shifts since last LTI;

·    Extended scope: the scope of the Central Shaft project was extended from an initial target depth of 1,089 meters to a final depth of 1,204 meters;

·    Project is self-funded and is owner-built by Blanket crews with supervision from Sinking Engineering Mining Construction;

·    During shaft sinking, more than 1,800 metres of infrastructure development was completed including mid-shaft loading;

·    Capital cost to date is approximately $60 million, compared to initial sinking contractor quotes received of about $100 million;

·    Increased mine-life: the shaft has extended Blanket’s life of mine to the current time horizon of 2034;

·    Increased production: the Central Shaft is expected to increase production by  around 45 per cent from approximately 55,000 ounces of gold in 2019 to the target rate of 80,000 ounces from 2022;

·    Reduced costs: economies of scale and operational efficiencies arising from the Central Shaft are expected to reduce the all-in sustaining cost per ounce of gold from $855[1] in 2019 to between $700 and $800 per ounce;

·    Increased exploration:  the Central Shaft will provide access for further deep-level exploration which, if successful, may extend Blanket mine life beyond 2034;

·    The erecting and fixing of the headgear is due to be completed by the end of 2020 and commissioning is on track for first quarter 2021.

Commenting on news of the completion, Steve Curtis, Caledonia Mining Corp Chief Executive Officer, said

“The completion of the equipping phase is a huge milestone for the Company, and no-one should underestimate this achievement. The last five years have been a tremendous team effort and we commend our employees for their hard work and their commitment to safety. Shaft sinking is widely regarded as one of the most dangerous activities in mining and I am proud to report that over more than five years the crew achieved 1,850 fatality free shifts to date with only  two LTI and achieving more than one million LTI free man hours worked since the last LTI.

“We’ve invested approximately $60 million in this project since we first announced it in 2015 and it has been owner-built and fully funded through internal cash flow and has been completed at a cost that is well below initial quotes received.

“Central Shaft is one of the largest gold mining investment projects in Zimbabwe and will be transformational to our business:  our target production is set to increase by 45 per cent to 80,000 ounces by 2022 while our long-term all-in sustaining costs are expected to drop to $700-$800 per ounce. Central Shaft will also position us to step-up our deep level exploration which, if successful may extend Blanket’s life of mine, which is currently to 2034.

“Over the last  five years we have built a solid foundation for the Company, we have a healthy balance sheet, a strong gold price and a highly cash generative asset with free cash flow expected to increase significantly with the rise in production. This is a very exciting time for Caledonia, and I would like to take this opportunity to recognise Dana Roets (Chief Operating Officer), Caxton Mangezi (Blanket Mine General Manager), Wimpy Nel (Design Engineer), Carel Greeff (Projects Manager), the late Rodney Voight (Civils Design Engineer), the entire team at Blanket, our technical team in Johannesburg especially Deon Niemand and the contractors for their outstanding performance as we take the business into its next chapter.”

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Caledonia Mining Corporation

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