Caledonia Mining to focus on gold and cobalt projects
January 19, 2007 Filed Under: Cobalt Mining, Mining Services
Canadian miner Caledonia Mining Corp is expecting to report an operating profit in the fourth quarter of 2006 but its directors have decided against re-opening the Barbrook Mine in South Africa, which was crippled by industrial action in November last year.
Caledonia will now focus on gold and cobalt concerns in Zimbabwe and Zambia, it said in a statement.
In the statement Thursday, Caledonia said the South African gold miner would remain on care and maintenance while talks are on-going with potential purchasers to dispose of the mine together with the Eersteling Gold Mine, which has also been on care and maintenance since 1997.
Caledonia said it had lodged a claim for R7.5 million rand against the labour broker whose employees burnt down administrative buildings during the strike.
The company however did not say who any ”potential purchasers” are. Late last year, however chief executive officer Stefan Hayden was quoted saying “a couple” of parties had expressed interest in the mine.
This week Caledonia said the sale of the two mines would enable it to focus primarily on the Blanket Mine in Zimbabwe, currently its only gold producer, and the Nama Cobalt project in Zambia.
The sale of Eersteling would not affect the Rooipoort Platinum Project, owned by the gold miner, and Caledonia said it will proceed with further developments at this asset.
”The Blanket Mine is now Caledonia’s only gold producer and operations at Blanket continue on target. The Blanket Mine shaft expansion to increase production to 40,000 oz per year has been delayed by a shortage of foreign exchange in Zimbabwe. Completion is now projected for the third quarter 2007,” said Caledonia.
In Zambia, Caledonia said it had signed Letters of Intent with refineries and companies to ensure long-term purchases of cobalt production from Nama, and discussions are underway with other interested refiners.
The finalisation of such agreements would depend on the outcome of metallurgical and process test works currently underway, it said.