TORONTO, ONTARIO — (Marketwire) — 03/28/13 — Caledonia Mining Corporation (the „Company“) (TSX: CAL)(OTCQX: CALVF)(AIM: CMCL) is pleased to announce its fourth quarter 2012 („Q4“ or the „Quarter“), and the operating and financial results for the 12 months to December 31, 2012 (the „Year“). All results are reported in Canadian dollars unless otherwise indicated. Following the implementation of Indigenisation, Caledonia owns 49% of the Blanket Mine in Zimbabwe. Operational and financial information set out below is on a 100% basis unless indicated otherwise.
Nama Base Metals Project, Zambia
The 2012 drilling programme at the Company-s Nama base metals project comprised 10,903m over 20 holes and confirmed the existence of a copper-bearing mineralised zone. Shallow drilling will be undertaken on the identified zone to improve resource definition. Initial exploration work will also be carried out on additional zones of mineralisation that have been identified to the west and south of the mineralised zone. Caledonia expects to issue a NI 43-101 compliant copper resource statement by June 30, 2013 and a preliminary feasibility study by the end of 2013, on the possible mining of near-surface copper oxide material.
Growth Strategy
As an indigenised entity, Blanket can now develop and implement its long term growth strategy. The recently re-constituted Blanket board, which includes representatives of the Indigenous Zimbabwean shareholders, has approved a capital investment programme for 2013 and a 4-year growth strategy for 2014 to 2017.
This investment programme is estimated to cost US$37 million and will be funded pro-rata by all of Blanket-s shareholders from Blanket-s internally generated cash.
The investment programme is expected to result in progressive increases in gold production to approximately 76,000oz in 2016 (of which 49% will be attributable to Caledonia) with further upside potential coming from the development of the satellite deposits which are built into the capital expenditure programme but not reflected in the gold production target.
Dividend Policy
Caledonia will continue to maintain its strong financial position so that it can implement its stated growth strategy and retain the flexibility to take advantage of further opportunities without the need to raise third party finance. The directors will to continue to assess further dividend payments at least annually in light of Caledonia-s continued financial performance and financial resources.
Commenting on these results, Stefan Hayden, Caledonia-s President and Chief Operating Officer said:
„I am delighted to again report further strong operational and financial performance. Since production re-commenced at the Blanket Mine in 2009, we have quadrupled gold production and for the 12 months to December 31, 2012 we achieved Blanket-s all-time record high for annual production at 45,465 ounces of gold. As a result of the latest production increases, we have also reduced the cash cost of production to US$571 per ounce; making Caledonia one of the lowest cost gold producers in the world.
„Following the implementation of Indigenisation at Blanket, Caledonia announced in January 2013 a growth strategy to increase production at Blanket by 90% to 76,000 ounces of gold in 2016. This plan is estimated to cost US$37 million and will be entirely funded from Blanket-s internally generated cash. The target production of 76,000 ounces excludes any potential production upside from any of Blanket-s highly prospective 18 satellite properties. Exploration and development work is currently well underway at the first three satellites and I look forward to announcing the preliminary results of this work in due course. Importantly, the Blanket crushing and metallurgical plant has surplus capacity and any incremental ore from these satellites could be treated with modest additional capital investment.
„In addition, further exploration work at our base metals project, Nama in Zambia is being carried out with a view to issuing a NI 43-101 compliant copper resource statement this year.“
Further information regarding Caledonia-s exploration activities and operations along with its latest financial statements and Management-s Discussion and Analysis can be found at .
Contacts: Caledonia Mining Corporation Mark Learmonth + 27 11 447 2499
Canaccord Genuity Limited Andrew Chubb / Sebastian Jones + 44 20 7523 8000
Newgate Threadneedle Beth Harris / Adam Lloyd +44 20 7653 9850
CHF Investor Relations Jeremy Hill +1 416 868 1079 x 238
Only registered users can comment.
