Caledonia’s Blanket
gold mine in
Toronto, Canada — 18 April 2012 – Canadian-based gold producer Caledonia Mining says it expects to begin implementing its indigenisation compliance transactions in the current quarter. The transactions are contained in a memorandum of understanding that the company went into with the Zimbabwean government in February.

Caledonia operates the Blanket mine in Gwanda. Quoting “The Herald” newspaper, reports that in terms of the agreement, indigenous Zimbabweans will acquire an effective 51% of the mine for a paid transactional value of US$30 million.

“We are working hard on the various transactions envisaged in this MoU which we hope will be implemented during the second quarter of 2012,” said the company in a statement issued here.

Caledonia CEO Stephan Hayden said the empowerment deal, once implemented, would leave Blanket “financially and strategically well-positioned to progress its exploration and development projects.”

He added that Blanket Mine was one of the low-cost gold producers on the continent. “I believe that Blanket is now one of the most efficient and lowest cost gold producers in Africa,” he said.

The remarks came as the mine increased output by 69% in the quarter ended 31 December 2011. Fourth quarter output reached 10 533oz.

Total annual production last year increased by 102% to 35 826oz, while cash operating costs eased substantially to US$521/oz, compared to US$583/oz in the preceding quarter.

In terms of financial performance, the group’s turnover for the year increased to US$55.7 million from US$22.3 million in 2010.

Gross profit for 2011 rose by 358% to US$29.1 million from US$6.3 million in 2010. Net profit after income taxes for the year just ended stood at US$12.1 million.

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