Caledonia Mining’s (LON:CMCL) expansion plans were given a boost by an increase and upgrade in the gold resource at its 49%-owned Blanket Mine in Zimbabwe.
Following an extensive drilling programme it has been able to move 491,000 ounces of gold into the higher confidence indicated resource category from inferred.
An additional 47,000 of ‘indicated inventory’ has also been identified. In all it now has just under 3.5mln tonnes of reserves and indicated resource.
This represents a 20.5% increase in contained gold compared with the last figure released late last year, which formed the basis for the company’s plans to double production over the next three years.
At that point only 55% was measured and indicated. After the upgrade, the resources split has improved to 62% in the higher confidence categories.
Chief executive Steve Curtis said: "This upgrade reflects an increased focus on resource development at the Blanket Mine.
“The rate of exploration drilling has increased and will increase further when the new drill machines, which have already been ordered, are delivered and commissioned.”
Last November Caledonia said it intended to double production at its Blanket after a strategic review indicated expansion of the mine was the best use of its funds.
The gold producer was considering growing outside of Zimbabwe, but the review concluded the best potential returns lay with exploiting the additional resources at the mine, which is 49% owned and operated by Caledonia.
Blanket is forecast to produce 42,000 ounces of gold this year, but through a US$70mln investment, output will rise to around 80,000 ounces.
It said in November most of the additional gold would come from resources currently classified as inferred.