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AMN - ZIMBABWE: Boost in resources at Blanket

Caledonia Mining Corporation has announced an increase and upgrade to the resource base at its 49%-owned Blanket Mine in Zimbabwe. Measured and indicated resources have increased by 6% from 671,000 ounces in December 2016 to 714,000 ounces today while inferred resources have increased 47%.

The increase is based on development and diamond core drilling carried out to the end of August 2017 combined with improvements to the geological model. Total measured and indicated resources now stand at 5.62 million tonnes at a grade of 3.95 g/t.

Inferred resources have increased from 604,000 ounces in December 2016 to 887,000 ounces today. Total Inferred resources now stand at 5.53 million tonnes at a grade of 4.99 g/t.

The resource update has resulted in a modest decline in the average grade of the resource in the indicated category from 4.31 to 3.98 g/t as a result of additional infill drilling data, although the average resource grade remains well above the current mill feed grade. Caledonia expects the mined grade to trend upwards over time as higher-grade resources are accessed at depth.

The increase in measured and indicated resources have increased the proven reserves and indicated resources that may be used in the life of mine plan by 45% from 3.33 million tonnes, used for the Technical Report published in December 2014, to 4.84 million tonnes currently.

The resource update marks the sixth successive year of sustained resource growth at Blanket. Blanket's resources have grown by approximately 69% since 2011 despite mining over 250,000 ounces in this period. Resources have increased both in terms of measured and indicated as well as inferred resources.

Continued exploration success at Blanket has prompted Caledonia to re-asses the Life of Mine Plan (LOMP) for Blanket in the context of the increased resources and the current progress of the Central Shaft project. Caledonia is engaged in an investigation of the potential to bring additional ounces into the LOMP with the potential for increased mine life at Blanket.

Chief executive officer Steve Curtis said, “We are pleased to see continued positive results from our exploration activities at Blanket. To have consistently grown the total resource base every year since 2011 is a commendable achievement and is testament to the great potential of the mine and to the efforts of our technical staff. It is very satisfying to see our investment in exploration continue to deliver results.

“The increase in the measured and indicated resource base to 714,000 ounces is good news for the longer-term life of Blanket and underscores the overall confidence level in Blanket's resources.

“Furthermore, the increase of 47% in the inferred resources at depth to 887,000 ounces shows the future potential of the mine. We are especially pleased to see good grade continuity in both our measured and indicated resources as well as in our inferred resources at depth with grades above the current mine head grade.

“We are currently engaged in an investigation into the economic potential of modifying the current life of mine plan and the current investment plan at Blanket which commenced in the fourth quarter of 2014 to include additional ounces where possible with a view to extending the life of Blanket.”

During the September quarter there was record quarterly production of 14,389 ounces. Production was 15% higher than the previous quarter and 7% higher than the corresponding quarter of 2016. The improvement is expected to continue this quarter and the company remains on track to meet its 2017 guidance of between 54,000 and 56,000 ounces.