Name of the Project
Blanket gold mine expansion project.

Location
Zimbabwe.

Project Owner/s
Caledonia Mining Corporation (64%).

Project Description
A revised investment plan and production projection were announced in 2014.

The revised plan aims to improve the underground infrastructure and logistics and allows for an efficient and sustainable production build-up.

Infrastructure improvements will include the continuation of the No 6 Winze shaft, the development of a tramming loop 650 m below surface and the sinking of the new 6-m-diameter, four-compartment Central shaft.

The extension will add two further production levels. They will provide access to the indicated and inferred resources below 30 Level and potentially increase Blanket's projected life-of-mine by a further four years to 2031.

The revised plan is also expected to improve Blanket’s long-term operational efficiency, flexibility and sustainability.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Based on the revised plan, the best-estimated net present value of the extension project has been calculated at $65-million at a real discount rate of 8.36%. The internal rate of return has been calculated at 42%.

Capital Expenditure
The Central shaft project is estimated at $44-million.

Planned Start/End Date
Production is expected to start in 2021.

Latest Developments
Caledonia Mining has bought an additional 15% shareholding in the Blanket gold mine from Zimbabwean company Fremiro Investments, taking its overall shareholding in the mine to 64%.

This marks the completion of a transaction first announced in November 2018, following approvals by various Zimbabwean regulatory authorities.

Fremiro initially acquired its shareholding in Blanket when Caledonia implemented transactions in 2012 to comply with the Zimbabwean Indigenisation and Economic Empowerment Act.

As part of the transactions, Caledonia sold 41% of the mine to Zimbabwean shareholders.

In March 2018, the Act was amended to remove the 51% indigenisation requirement for gold mining businesses; shortly thereafter, Caledonia and Fremiro agreed on a transaction whereby Caledonia would buy back Fremiro's shareholding in Blanket.

In exchange for Fremiro’s 15% stake in the Blanket mine, Caledonia cancelled a loan between itself and Fremiro and issued 727 266 new shares in Caledonia to Fremiro.

Fremiro will now hold about 6.3% of Caledonia's enlarged issued share capital.

The transaction is valued at about $16.67-million.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
The project remains on target for first production in January 2016, with production expected to reach the target rate of 500 t/d in May 2017.

Contact Details for Project Information
Caledonia Mining, tel +1 416 369 9835 or email info@caledoniamining.com.