Caledonia Mining unveiled substantial increases in reserves and resources (R&R) at the 64%-owned Blanket gold mine, notes house broker Liberum.
Overall, Blanket’s Measured, Indicated & Inferred (MI&I) ounces increased by 47% to 2.85 million oz and grade by 20% to 3.74g/t, of which the proportion of higher-confidence M&I ounces improved to 63% (from 56%).
Proven & Probable (P&P) reserves roughly doubled whereas the increase in average grade of 5% was far less than that seen in the resources.
“We understand from the company that this is in part attributable to the higher cut-off grade applied; in addition, some new orebodies have been identified for which mine plans have yet to be drawn up – implying to us potential for some degree of upside in terms of reserve tonnage and grade.
“According to Caledonia: “Blanket’s mine life now extends to 2034 based solely on reserves, or past 2040 if some Inferred resources are included (which we believe to be reasonable given past conversion rates.”;
Liberum adds the next major catalyst will be the Bilboes sulphide feasibility study, which, if favourable, can be a significant share price catalyst
Buy with a target price of 1,103p is Liberum’s view.