Gold production soars at Blanket

Canadian-based Caledonia Mining Corporation reported a significant increase in gold production at its Zimbabwean entity.

The company said total gold production at Blanket Mine for 2011 increased by 102 percent to 35 826 ounces during the period.

In addition, Blanket recorded a 69 percent increase to 6 227 ounces in the last quarter.

Turnover for the year increased to $55,7 million from $22,4 million in 2010. During the period, gross profit for the year increased by 358 percent to $29 million.

Net profit after income taxes for 2011 was $12 million compared to $1,5 million in 2010.

“I am delighted to report that the fourth quarter of 2011 was the culmination of a highly successful year for Caledonia, during which gold production at the Blanket Mine in Zimbabwe more than doubled. Production has now increased in each of the last seven quarters. In the fourth quarter of 2011 10,533 ounces of gold were produced, which exceeded our quarterly production target of 10,000 ounces. In addition, the cash cost of production was significantly reduced for the year as a whole to US$581/oz, compared to US$751/oz in 2010,” Stefan Hayden, Caledonia President and CEO, said

“In the fourth quarter alone, the cash cost of production was further lowered to US$521/oz. This reduction, which is in line with our earlier guidance, was due to improved operating efficiency and the benefits of economies of scale. I believe that Blanket Mine is now one of the most efficient and lowest cost gold producers in Africa.”

During 2011 Caledonia carried out a five-hole diamond drilling programme on its wholly owned Nama copper/cobalt property in northern Zambia. On March 12, 2012 Caledonia announced the summary of the results of this 2011 exploration programme which has identified a new mineralised zone with a weighted average copper grade of 0.47 percent, a weighted average thickness of 41 metres and at a depth of 280 to 450 metres. A sufficiently large resource at shallow depth could provide the basis for a future open-pit mining operation.

A further exploration programme has now commenced comprising 8 400 metres of drilling.

On February 20, 2012, Caledonia announced it had signed a Memorandum of Understanding with the Minister of Youth, Development, Indigenisation and Empowerment of the Government of Zimbabwe pursuant to which Caledonia has agreed that Indigenous Zimbabweans will acquire an effective 51 percent ownership interest of the Blanket Mine for a paid transactional value of US$30.09 million. – SW Radio Africa News

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