Caledonia Mining Corporation The golden touch
www.caledoniamining.com
The golden
touch
Caledonia Mining Corporation Stefan Hayden, Chief Executive of Caledonia Mining Corporation, explains how a combination of exciting assets and a highly-skilled, passionate workforce and management team have created one of Africa’s leading low-cost gold producers
written by: Will Daynes research by: Robert Hodgson
No 2 Conveyor discharging onto stockpile at twilight
Caledonia Mining
W
ithout beating around interest in the Blanket mine in Zimbabwe, the bush, the gold which produced over 45,000 ounces of gold in industry as it stands 2012, and a 100 percent interest in the Nama in mid-2013 is under base metals exploration project in Zambia. The Blanket gold mine re-started pressure and not just when it comes to the recent falls in gold price. production in April 2009, following a This pressure also stems from issues including temporary six month shut-down during the resource nationalism, labour concerns, testing times before Zimbabwe changed political and legislative uncertainty, and its currency to the US dollar, and has been increased environmental requirements. With expanded since to significantly increase these factors having an increasing influence production capacity to 48,000 ounces on the financial performance of gold mining of gold per annum last year. Last year operations in core markets like Africa it is Blanket was the first mining company to all the more important to comply with the Zimbabwe Indigenisation Legislation. recognise the achievements of those businesses that are Meanwhile the recently not only weathering the reconstituted Blanket board have also approved a four storm, but prospering in difficult conditions. year growth strategy for Ounces of gold per “While the drop in the the mine. Estimated to annum achieved by gold price we have seen in cost a total of $37 million Blanket in 2012 recent times now appears the investment programme will be funded from to be recovering slightly, we have remained profitable at these Blanket’s internally generated cash considerably lowers levels, this at a time is expected to result in progressive when much of the industry has been sub- increases in gold production to approximately economic,” states Stefan Hayden, Chief 76,000 ounces in 2016. Executive of Caledonia Mining Corporation. As it stands at the time of writing the “We have done so by controlling our costs Blanket mine extends over three kilometres. and the efficient use of labour we have Current work on the asset includes the sinking trained and been able to retain. This has of the new No. 6 Winze shaft. This shaft will allowed to maintain our position as one travel down to the mine’s current production of the lowest, if not the lowest cost listed level of 750 metres and continue down to producer on the African continent and one approximately 1,080 metres below surface. of the lowest cost producers in the world.” While the No. 6 Winze will allow for more As an exploration, development and rapid access to the mine’s ore bodies below mining company focused on Southern Africa, 750 metres, it is only an interim measure, Caledonia’s primary assets are a 49 percent one that will remain in place while the
48,000
Caledonia Mining company assesses its plans to sink a central shaft that could eventually descend to 2,000 metres. “One of the major advantages of our operations at Blanket is that we have 18 satellite properties all within trucking distance of our main plant,” Hayden continues. “Ever since we purchased the mine from Kinross Gold eight years ago we have been continuously investing capital to the point where our metallurgical plant now has a very substantial over capacity for what we are currently producing. Rather than this being a negative issue, we are now starting to take up
Blanket miners on their way to their workplaces
that over capacity by bringing these satellite properties into production as planned.” Work currently ongoing around the main Blanket mine includes shaft sinking and underground development on one property
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Caledonia Mining
Underground loading a Granby car
and the dewatering of an older mine that also saw Caledonia complete a comprehensive ceased production in the late 1950s. While drilling programme at its Nama Base Metals all of this is ongoing Caledonia continues to Projects in Zambia. This involved drilling some stockpile ore from these operations, rather 10,903 metres over 20 holes, the results of than truck it to the plant, the reason for which confirmed the existence of the copperwhich Hayden goes on to clarify. “At Blanket bearing mineralised zone identified in 2011. we run a huge, highly efficient metallurgical The 2013 drilling programme on the asset plant where we recover gold at better than will include shallow drilling on the identified 93 percent. With this in mind we are simply zone to improve resource definition. Initial not prepared to jeopardise exploration work will also be carried out on additional that recovery by simply throwing ore into it without zones of mineralisation having first carried out that have been identified to extensive test work to ensure the west and south of the that we can adapt a blend mineralised zone. of that ore so that we don’t Turning back to Zimbabwe, Gold recovery at Blanket affect our overall recoveries.� while Hayden does agree that metallurgical plant The 2012 financial year the market there does pose
93%
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several unique challenges, it also possesses considerable benefits which often do not get the coverage or recognition they deserve. “The biggest advantage of working in Zimbabwe is that we are dealing with a very well educated labour force who collectively boast a strong work ethic in everything they do. What we have found as a result is that we are able to utilise this labour efficiently, to the point where we employ around a third of the amount of labour that one of our neighbours employs in order to produce four times as much gold. It goes without saying therefore that we have found it to be an absolute pleasure dealing with labour in Zimbabwe.� Leaving a positive legacy behind for Zimbabweans is also something that is at
Caledonia Mining
Aerial view of the Blanket operations
the forefront of Caledonia’s thinking when it comes to its operations in the country. This commitment runs right through the business right down to the fact that it is the only African signatory of the Cyanide Convention. By putting less than 30 parts per million of cyanide onto its tailing dams Caledonia is reaffirming that not only is it safeguarding the welfare of its employees,
but also that of surrounding communities and the region in general. In accordance with the Indigenisation and Economic Empowerment Act ten percent of the Blanket mine is actually owned by the local Gwanda community, with a further 16 percent held by the Sovereign Wealth Fund of Zimbabwe and ten percent by all of Blanket’s employees. Over and above its holding in the
“The recently reconstituted Blanket board have also approved a four year growth strategy for the mine”
“Leaving a positive legacy behind for Zimbabweans is at the forefront of Caledonia’s thinking when it comes to its operations in the country” mine the Gwanda community has also been the recipient of $1 million donation from Blanket, which has also provided it with an advance dividend of a further $4 million to enable it to proceed with various community projects such as clinics, schools and the drilling of boreholes for water. Other projects that highlight the corporate social responsibility aspect of Caledonia’s business include the building and rehabilitating
of approximately 130 kilometres of hard top and dirt roads around the mine, and the ongoing support the company lends to local schools located within a 20 kilometre radius of its operations. Additionally, Caledonia has to date donated $2 million towards Zimbabwe’s Presidential Scholarship Fund. This fund enables Zimbabwean students based outside of the country to continue their studies at various international institutions.
Caledonia Mining
Panorama view of the Blanket mine and surrounding area
“Skills generation is something we are equally dedicated to facilitating in Zimbabwe,” Hayden enthuses. “As well as the six engineers we graduate on average each year through the country’s School of Mines we also operate a training school at Blanket from which we run more than 1,000 courses per quarter for our employees.” It isn’t just the company’s employees who Caledonia have incentivised to improve their quality of life. Their dependents have also been encouraged to become more selfsufficient by growing vegetables. In order to help facilitate this the company pumps water from one of its smaller, out-of-use shafts to irrigate crops. “All the aforementioned work we are doing is being done because we want to
improve the quality of life of our employees and neighbouring communities,” Hayden concludes. “Our employees can see this and a measure of their satisfaction when it comes to working for Blanket can be seen in the fact that our staff turnover figure is low at 0.01 percent per annum. This means that not only are we developing talent but we are retaining it, and that is crucial for any successful mining operation, particularly one that like ours is actively looking to expand, both in Zimbabwe and further afield.” For more information about Caledonia Mining Corporation visit: www.caledoniamining.com
Caledonia Mining Corporation www.caledoniamining.com
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