Blanket Mine parent firm, Caledonia Mining Corporation Plc, has obtained exclusive rights to explore new gold mining claims in the Connemara north area near Gweru in the Midlands province.
Connemara north is in close proximity to the Glen Hume property, which is also under Caledonia focus consideration. The latest option gives Caledonia the right to explore the area for a period of up to 18 months.
The company hopes to derive favourable outcome from this effort, which will impact positively on its overall business.
“This option agreement gives the company the exclusive right to explore and subsequently, if exploration is successful and at its sole discretion, acquire the mining claims over an area known as Connemara north, a property which, like Glen Hume, is situated in the Gweru mining district in the Zimbabwe’s Midlands province that has historically produced significant quantities of gold,” said Caledonia.
Connemara north is the northern section of the closed Connemara mine, which was previously owned by First Quantum Minerals. The mine was placed on care and maintenance in 2001 and subsequently disposed of in 2003.
It has not been commercially mined since that time but before being placed on care and maintenance it used to produce approximately 20 000 ounces of gold per annum from an open pit heap leach operation.
According to Caledonia, previous public disclosures made by First Quantum in 2001 indicated that they had plans to expand the existing open pit operations at Connemara mine when gold prices were approximately $300/oz.
“At this stage it is not possible for Caledonia to verify any of the work performed by previous owners or to ascertain what proportion of any purported resource lay within the boundaries of the Connemara north property over which Caledonia has secured the option,” said the company.
“The property is approximately 30km from Glen Hume with good road access between them offering the potential of operating synergies should Caledonia decide to develop both areas.
“The total consideration is an initial payment of $300 000, followed by a further payment of $5 million (payable in cash or shares at the discretion of the vendor), which would be payable should Caledonia decide to exercise its right to acquire the mining claims.
“Caledonia has also agreed to the payment of a one percent net smelter royalty to the vendor on gold it produces from Connemara North.”
Caledonia chief executive officer, Mr Steve Curtis, said his company sees great potential in the project, which has been lying untapped for 20 years.
“We will be excited if evaluation work proves successful and our exploration programmes deliver favourable results,” said Mr Curtis.
“Caledonia will have a great opportunity to establish a footprint in the highly prospective Zimbabwe Midlands, which could deliver operating synergies between the two sites.
“This has been a busy year for Caledonia and with the completion of Central Shaft in sight I am pleased that we are now able to start delivering on the other components of our corporate strategy.” The Chronicle