GOLD & SILVER PICKS

[NYBob]

Blanket Gol Mine switches to alternative power -



31/05/2011
by Business Reporter

Independent ... Blackouts a thing of the past at Blanket Mine

Blanket achieves 40 000 ounces target

GWANDA-BASED Blanket Gold Mine
has completed the installation of alternative power supplies
which management says will ensure operations are not
interrupted during cuts in electricity supplies by ZESA.

The mine – which is owned by Canada-based

Caledonia Mining Corporation --
said on Tuesday that it had completed the installation of
a 10 MVA generator power plant that will enable operations
to continue during electricity blackouts.

“Blanket Mine has successfully commissioned the 10 MVA generator
power plant,” the company said in a statement.

“The installation of the standby generator sets ensures that
Blanket Mine is now self-sufficient and able to continue all
its surface and underground operations in the event
of power disruptions.”

ZESA is struggling to meet domestic and industrial demand
forcing companies to consider alternatives to ensure
operations are not affected by frequent blackouts.

Blanket concluded a deal with the power utility under which
it would pay a higher tariff for more reliable supplies but
ZESA still struggles to meet its end of
the deal during peak demand times.

Gold output at the mine jumped 17 percent to about 7000 ounces
over the last quarter on the back of firming world market
prices and a significant reduction in production costs.

Average production costs per ounce were down 18 percent at
US$648 compared to the first quarter in 2010 while prices
hit US$1,397 per oz compared to about US$1,107 over
the same period last year.

The company said gross profit for the first quarter nearly
doubled to $5,248,000 compared to $2,815,000 in the fourth
quarter of 2010.

Revenues increased to US$11 million compared to US$4.4 million
in the first quarter of 2010.
Managements says the mine is on course to achieve annualized
output of 40 000 ounces by year-end.

“We have made significant progress during the current quarter
to address the remaining constraints which, once solved,
should enable us to reach our target of 10,000 ounces per
quarter.

A new ore pass was raise-bored and commissioned on May 13, 2011,”
chief executive Stefan Hayden said recently.

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