Caledonia commissions new shaft

AIM and NYSE-listed Caledonia Mining has begun operations at the new central shaft of its Blanket mine in Zimbabwe.
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Caledonia Mining's Blanket gold mine in Zimbabwe

Oonagh Reidy

The company said the new shaft will solve its hoisting constraints and facilitate the planned expansion in mine capacity targeting 80,000 oz of gold production per year.
 
The gold miner is forecasting an uplift in production to 61,000-67,000 ounces of gold in 2021 - up from 57,899oz last year - and rising to 80,000ozpa from 2022.
 
"I am delighted to announce that our new Central Shaft, which is the deepest shaft of any gold mine in Zimbabwe, is fully operational," said Caledonia chief executive Steve Curtis.

"Commissioning the Central Shaft has been the culmination of a six-year project costing approximately $67million, all funded through internal cash flow," he added. 

"This has been an owner-funded and built project by the Blanket team and I would like to thank everyone for their hard work and especially for achieving the completion of the shaft without any serious accidents, recording only two lost time injuries." 

An increase in quarterly dividend, to US$0.12c per share, was also announced, marking the fifth increase since 2019.  
 
The Q1 dividend pay-out marks a 9% jump from the $0.11c/sh paid out last quarter.
 
Firm gold prices and good cost control during the quarter also contributed to the generous shareholder pay-out. 
 
"As we reach the end of the six-year investment programme at Blanket mine, the anticipated combination of rising production and declining capital investment gives us confidence to further increase the dividend payment in addition to providing funding for investment in new projects, including the exploration prospects at Glen Hume and Connemara North," Curtis said.
 
Shares in Caledonia have jumped 65% in the last 12 months and were up 8.6% to 1,157.5p on Tuesday, valuing the company at £129 million.