Caledonia Mining is to buy Pan African Mining’s gold claims near Gweru, developing its second mine in Zimbabwe and reviving an operation that shut down close to 20 years ago.
Blanket Mine is currently Caledonia’s only mine, and the company has been looking to expand its portfolio. The Maligreen claims could hold 940,000 ounces of gold, with resources shallow enough for open-pit mining, Caledonia says. The price for the mine is US$4 million.
“The property has significant potential and has benefitted from many years of exploration activity. Initial evaluation of the inferred mineral resource by our own team and by independent consultants indicates the potential for a significant mining operation with a NI 43-101 compliant inferred mineral resource of almost one million ounces at a grade of 1.88g/t, an acceptable open pit grade,” said Caledonia CEO, Steve Curtis.
After completing the deepening and equipping of central shaft at Blanket, which will increase output there from 55 000 ounces per year to over 80 000 from 2022, Caledonia has money to spare for new acquisitions.
In May last year, FD Mark Learmonth said the company was targeting small-sized brownfield investments that could be brought to production at low cost. Caledonia recently abandoned plans to buy Glen Hume, another property in the Gweru district, after poor exploration results.
But Maligreen shows better potential.
“This transaction is an important next step as Caledonia pursues its strategy to become a multi-asset gold producer in Zimbabwe, one of the last gold frontiers in Africa,” Curtis said.
Previous exploration at Maligreen has included an estimated 60,000 meters of diamond core and percussion drilling, 3.5 tonnes of bulk metallurgical test work and aeromagnetic and ground geophysical surveys.
Maligreen is estimated to host an inferred mineral resource of approximately 940,000 ounces of gold in 15.6 million tonnes, at a grade of 1.88g per tonne. As a plus for Caledonia’s preference for low-cost mining, 76% of the inferred mineral resource there – or about 712,000 ounces – is shallower than 220 metres. This means that there is potential for an open pit mining operation.
“The inferred mineral resource has been estimated using a cut-off grade of 0.4g/t for a potential open pit and 1.5g/t for a potential underground mine,” Caledonia says.
The mine on the site shut down in 2002, having produced around 20,000 ounces of gold over the two previous years. To get a better understanding of the resources there and the mining operations needed, Caledonia will spend US$1.6 million to drill an initial 4,800 meters over 18 to 24 months.
