Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL)’s update from the deep-level drilling programme at its Blanket Mine was encouraging, says broker Cavendish with grades and widths generally better than expected.
As a result, the overall resource should increase and so lead to an extension of the mine life.
“We currently value Blanket out to 2036, even only a four-year life of mine extension, that far in the future, could increase our NPV 12%-US$1700/oz by over 10%.
“This is a meaningful result given the infrastructure in place and how far in the future this is.
“Drill holes at Eroica and Blanket, drilled from 750 metres below the surface, have intersected the orebodies to depths of 1,110 metres below the surface, all the way down to the lowest level of main infrastructure being developed from Central shaft.
“But that’s not the end, as drilling has also intersected the Blanket and AR South orebodies below 1,110 metres (including 12.37m at 8.76g/t gold) so it looks like Blanket could keep delivering for many years to come.”
Cavendish has a 1,294p target price.