Caledonia affiliate upgrades Zimbabwe copper mine

Plans are afoot to expand the Sanyati copper mine, currently under development in Zimbabwe.

Majority owner Reunion Mining, an affiliate of Caledonia Mining (TSE), intends to produce 5,000 tonnes of the red metal per year at an operating cost of US49 cents per lb.

In addition, a feasibility study calls for zinc to be simultaneously leached with copper from the oxide ore and then recovered by means of solvent extraction. Highly pure zinc metal will then be produced by electrowinning. The zinc plant is expected to cost about US$9 million and roughly match the throughput of the copper plant. Annual zinc production is estimated at 6,300 tonnes at an operating cost of US20 cents per lb.

Cobalt and manganese also occur throughout the Sanyati deposits, and although grades are erratic, an average of at least 0.015% cobalt and 0.8% manganese is expected. Tests have resulted in recoveries of 65-92% for cobalt and 55-90% for manganese. Metallurgical studies to test the viability of recovering the two metals have begun, and pilot tests will commence in April. Oxide reserves are 5.8 million tonnes grading 1.1% copper and 1.2% zinc, while the sulphide reserves total 14.2 million tonnes at 1.2% copper and 3.2% zinc.

In other news, Caledonia has retained investment banking firm IBK Capital to raise up to $20.6 million in a private placement of unsecured, convertible debentures. The debentures will have a term of five years, earn interest at a rate of 4% per year and be convertible into Caledonia shares at $11.13 each. Proceeds will be used to expand Caledonia’s mining operations in Spain and Hungary and to conduct exploration in North America, Europe and Africa.