Canada-based Caledonia Mining is planning to restart operations at its Blanket gold mine in Zimbabwe, “as soon as possible”, after receiving the permission and licences it needs under the country’s new regulations governing gold trading, the firm announced on Friday.

Caledonia shares rose 63,6 percent on the news to C$0,09 a share in Toronto trading, South Africa’s miningweekly reported yesterday.

Reports say the mining firm which is among several gold mines that closed down late last year, has secured an initial working capital facility and purchased the consumables and spares needed to start-up.

It will target an initial production rate of 25 000 ounces per annum, but hopes to increase this to 40 000oz next year, by completing a shaft expansion project, according to the company’s chief executive Mr Stefan Hayden.

The Blanket mine has been granted a gold dealer’s licence by the Ministry of Finance and a gold exporter’s licence from the Reserve Bank of Zimbabwe, which enables it to meet the new gold-dealing and gold-export requirements.

Under the new policy, producers can sell their gold wherever they wish and keep 100 percent of the proceeds in their foreign currency accounts.

The company said it had already opened the necessary account with a major precious metals refiner.

“The recommencement of gold production at Blanket is a very positive development for Caledonia,” said Mr Hayden in a statement. “Blanket has managed to retain the bulk of its skilled workforce since it was forced to temporarily suspend operations in October 2008 and accordingly is in a good position to recommence production rapidly.”

The mine’s ability to ramp up to 40 000oz per year in 2010, through the completion of the No 4 shaft expansion project, will depend on the availability of further credit facilities and the rate of internally-generated cash flow, he said.

Caledonia is in talks with a number of potential lenders, but its ability to raise capital would depend on the efficient and sustained implementation of the current arrangements for Zimbabwean gold exporters.

Caledonia announced in October last year that it had temporarily suspended gold production at Blanket because of “continuing non-payment” of foreign exchange by the Reserve Bank for the sale of gold delivered to the central bank’s subsidiary Fidelity Printers and Refiners.

Last week, the Reserve Bank Governor Dr Gideon Gono admitted he used money belonging to gold producers and other exporters to financed critical national programmes.

Mining firms, including New Dawn Mining and Mwana Africa, have since announced they will reopen closed operations.

Last week Mwana said it would raise about US$6 million to resume operations and hopes are that the mine will start operating within the next few months. The mine has to be de-watered before operations begin.

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