Caledonia implements measures to minimize the impact of South Africa’s lock down

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  • Caledonia has increased the levels of consumables stocks
  • Estimates that Blanket has enough critical spares and mining consumables to sustain uninterrupted gold production
  • In the event of a lockdown in Zimbabwe, Caledonia will have a $12.5 million war chest

Following the announcement by South African authorities of a nationwide 21 days lockdown as means to curb the spread of COVID-19 infections, Caledonia Mining Corporation has put measures to avert the effects of the lockdown from affecting gold production from its Blanket mine.

The company said the lockdown is expected to have knock on effects for Caledonia as the supply chain for the procurement of a significant portion of mining consumables and capital equipment for the Blanket mine comes from South Africa.

Hence, the company has increased the levels of consumable stocks at Blanket in recent weeks as it does not expect that the mine will be forced to suspend gold production as a result of the disruption in the South Africa supply chain.

Caledonia estimates that Blanket has adequate critical spares and mining consumables in its inventory to sustain uninterrupted gold production well past the expected duration of the supply interruption including allowing for a period of supply chain and inventory restocking after the end of the South Africa lock down on 16 April.

The company has also done some financial resilience planning in case of a similar lock down being enacted in Zimbabwe, or an outbreak of COVID-19 infections at Blanket which will necessitate a mine shut down.

“….Caledonia would enter this unprecedented situation with a strong balance sheet with cash on hand at March 25, 2020 of approximately $12.5 million.”

The cash has been boosted by a strong first quarter production performance at the recently high gold prices.

Caledonia said the current cash on hand and existing term and overdraft facilities already in place at Blanket leave the business in a strong position to withstand an extended period of production interruption if it were to materialize.

Commenting on the measures to combat this pandemic, Chief Executive Officer, Steve Curtis said, “Our first priority remains the safety and health of all of our employees and their families. Management has taken active measures to help minimise the risk of infection and to safeguard the continuity of day to day business operations at Blanket. These plans are reviewed and, if necessary, updated daily in response to this highly fluid situation.

“We approach this challenge with a strong balance sheet, adequate inventory levels and a healthy workforce. Caledonia, our employees and indeed the people of Zimbabwe have successfully overcome great challenges in their recent past. I have full confidence that we will deal with this current challenge in a similar manner.”

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