Africa-focused gold mining company Caledonia Mining Corporation has developed an operational model aimed at increasing gold production at its Zimbabwe gold mine, Blanket, from 40 000 ozpa in 2013 to 76 000 ozpa of gold by 2016. And that is just the beginning, writes Laura Cornish.

Following the successful completion of its indigenisation deals in September last year, Caledonia has now finalised its plans to expand the mine. “Our intention to do this has been planned for long time but we had to wait for the right timing, which was entirely dependent on completion of the mine’s indigenisation,” explains Mark Learmonth, corporate development vice president for Caledonia.

As a fully indigenised entity, Blanket can now develop and implement its long-term growth strategy. The mine’s newly reconstituted board of directors, which includes the various indigenous Zimbabwean shareholder representatives, has approved an expansion budget for 2013 and strategic plan that covers the period 2013 to 2017.

“The combination of robust infrastructure and an operation that has been developed properly by Caledonia and its previous owners has given us the confidence, and the perfect platform, to invest in the project and improve and expand it further,” says Learmonth. An impressive statement considering the mine is over 100 years old and already delivered over 1 Moz of gold.

Increasing production so dramatically, by 90% over the next three years, includes extending an existing sub-vertical shaft from 750m to below 1000m, while simultaneously making minor upgrades to the crushing plant as well. “This is proof of our commitment to Blanket and Zimbabwe. Despite the numerous challenges we have experienced over the years, we believe in this mine and believe it still has plenty of value to offer, bearing in mind that we already have the track record of having increased production by 256% since 2010.”

Learmonth describes Blanket as a ‘pleasure’ to operate. “Because it is shallow, compared to South African gold mines, cooling is not required, neither is pumping. The rock is competent and the 800-strong labour force, comprising entirely of Zimbabwe locals, is well-educated and hard working. The mine’s major crisis of a few years ago – no power – is entirely resolved following the installation of 10 MW of stand-by diesel power and the negotiation of a revised power supply agreement. Blanket is generating cash, which we are reinvesting into the operation and into the country.”

Based on current resource figures, the mine has a 14-year lifespan, which could be considerably lengthened should its on-going exploration deliver favourable results. Blanket has 18 satellite properties in its portfolio, the first two of which are expected to start producing in the last quarter of 2013. Any additional ounces produced from these projects will be over and above the company’s targeted production increase.

Surplus capacity to accommodate increased production

Caledonia has already invested substantially in improving the efficiency of Blanket’s metallurgical plant after Blanket was acquired from Kinross in 2006.  Blanket now has surplus capacity (particularly for hoisting and in the carbon-in-leach (CIL) circuit) to accommodate future mine expansions. “As a result of this upfront, early-stage investment, very little capital is required now to see the mine and plant achieve our bigger production targets.”

While Blanket’s current gold production of approximately 40 000 ozpa equates to a throughput of 1 000 tpd, its current total hoisting capacity is 3 000 tpd and its CIL circuit capacity 3 800 tpd – indicating its status for scaling up on production immediately.“Minor amendments to the plant’s milling circuits will see its capacity increase to 3 000 tpd as well,” Learmonth adds.

Expanding the mine

Development of the existing ore resources above and below the current lowest mining level (750 m) at Blanket’s No 4 Shaft has commenced and is planned to produce an additional 36 000 ozpa of gold by 2016:

  • an additional 8 000 ozpa of gold will be achieved from the start of 2014 from development at the mine above the 750 m level anda further 4 000 ozpa will be achieved from early 2015
  • 24 000 ozpa is planned to start from the last quarter of 2015 from the No 6 Winze project below the 750 m level.

No 6 Winze

The deepening of the No 6 Winze from 750 to 1 080 m level will allow rapid access to the Blanket ore body below 750 m. The pre-production investment in this project is estimated to be US$3 million.

Production is scheduled to start in Q4 of 2015 and will progressively increase to about 600 tpd, which will give rise to incremental gold production of 24 000 ozpa. “This project is of extreme significance to us, which will allow us to continue following the gold reef at deeper levels.”

510 and 630 Level haulages

These projects will open up new mining areas on known resources at AR South and Lima, and will allow a 200 tpd increase inore production from Q1, 2014, increasing to 300 tpd in 2015 and should result in gold production of approximately 8 000 oz in 2014 and a further4 000 oz in 2015.

750 Level haulage

This project will connect the No 4 Shaft with the known ore bodies at Eroica and Lima on 22Level (750 m below surface) and will provide access for mining at Eroica and Lima between 630 and 750 m below surface. Cross-cuts from the 750 Level haulage will provide platforms for further exploration of the existing ore bodies above and below 750 m.

It is envisaged that the 750 Level haulage and related exploration will be completed by 2016. Budgeted investment on project and related exploration drilling for 2013 is US$669 000 and US$261 000 respectively. Projected further investment between 2014 and 2017 is US$2.2 million. No guidance as to future production arising from this project can be provided until the exploration work and subsequent feasibility study have been completed.

The satellite properties –short-term brownfield potential

Blanket holds 18 licenced satellite exploration properties, the furthest being 42 km from Blanket’s plant, on which there has been some small-scale historic goldmining activity. Any ore mined from the satellite properties will be crushed andtransported to the metallurgical plant.

“Three satellite properties, in particular, GG, Mascot and Eagle Vulture, are currently undergoingexploration and underground development work. We anticipate these projects will deliver further upside potential to the Blanket operation,” Learmonth reiterates.

The GG project is 7 km from Blanket, connected by an existing unpaved road, and was previously a small, shallow, surface operation. “We commenced with shaft sinking work to 120 m in 2012, which will be used for underground exploration, development and production.” The shaft has currently been sunk to a depth of 75 m and work has commenced on mining the first station and development level 60 metres below surface. Further stations will be developed at the 90 m and 120 m levels. In the process of sinking the shaft, gold mineralisation has been intersected between 45 and 60 m below surface with grab-sample gold grades of between 6.0 and over 10 g/t. Budgeted pre-production investment at GG for 2013 is about US$422 000.

The Mascot project is 42 km from Blanket, mostly connected by a paved road, and was previously mined down to 300 m below surface. Drilling undertaken by Blanket indicated the existence of two mineralised zones 50 to70 m on either side of the mined out area with gold grades of between3.5 and 4.6 g/t. The existing shaft at Mascot has now been re-accessed down to 180 m below surface and has been found to be in good condition. Development work has commenced towards the two identified mineralised zones. Budgeted pre-production investment at Mascot for 2013 is US$366 000.

The Eagle Vulture project is 40 km from Blanket, mostly connected by a paved road, and was previously mined down to 70 m below surface. Surface exploration work undertaken by Blanket indicated the existence of two extensive, unmined mineralised zones on either side of the old mine working zone. Development has commenced towards the identified mineralised zones.

Budgeted and projected pre-production investment at Eagle Vulture is US$702 000.

GG and Mascot are expected to commence production in Q4, 2013, while production at Eagle Venture is anticipated to commence in early 2015. The eventual production rate from GG, Mascot and Eagle Vulture and their lifespans will be determined once exploration and development work and metallurgical testwork on the mined mineralisation has been completed and a resource base has been identified.

Two further satellite properties have been identified for near-term development: Abercorn, which is approximately 20 km from Blanket, and Sabiwa, which is adjacent to Blanket but is not connected to Blanket’s underground infrastructure. The combined budgeted investment at Sabiwa and Abercorn in 2013 is US$1.3 million, with further investment of US$4.5 million is projected for 2014 to 2017.