caledonia-mining-corporationCaledonia Mining Corporation’s Zimbabwe mining unit, Blanket Mine, has produced a record 13 428 ounces of gold for the third quarter to 30 September 2016, which was a 7% increase from 10 927 ounces achieved in the second quarter.

Caledonia’s president and chief executive, Steve Curtis said the results for the third quarter were another step in the journey of “consistent” growth in production, profitability and cash generation at Blanket Mine.

“Gold production in the quarter was 13 428 ounces, 23% higher year-on-year and 7% higher than the previous quarter due to the increased tonnes mined and milled and despite marginally lower planned grade when compared to the second quarter.

“We continue to see the benefits of our investment in the mine over the past two years. As we approach the middle of the investment programme at Blanket, we are increasingly confident that the growth in production and declining cost trends will continue as we ramp up production to 80 000 ounces by 2021,” he said.

Gold was sold at an average price of $1 312 an ounce, which was an increase from $1 106 an ounce in the third quarter last year.

Profit before tax for the company during the period went up to $4,11 million from $2,24 million the previous year. The company’s cash position continued to grow with net cash of $12 million at the end of September compared to $10 million as at June 30, 2016.

Mr Curtis said the underlying operating and financial performance of Blanket Mine remains strong and is on an upward trajectory.

He said the quarter presented a number of indirect cost headwinds, which resulted in adjusted earnings being 25% lower than the second quarter of 2016.

These costs include those associated with the evaluation of new investment opportunities and the share-based expense relating to the long term incentive plan.

Despite these headwinds, Mr Curtis said Caledonia still expects to deliver full year earnings substantially higher than 2015.

“The quarter saw yet another production record, following on from the record set in the second quarter, as the benefits of improved mine flexibility become increasingly apparent.

“The installation of a third mill at Blanket in the quarter will further improve plant capacity as we continue to mill increased tonnage as part of the production expansion,” said Mr Curtis.

He said this achievement is a testament to the hard work of the management and employees at Blanket Mine as well as the technical team at Caledonia over the last 18 months.

Mr Curtis said production guidance for 2017 is 60 000 ounces, a 20% increase on 2016 production as the ramp-up of production at Blanket towards 80 000 ounces by 2021 continues.Costs at Blanket and Caledonia remain well-controlled and the company expects to see further reductions in the average cost per ounce as production increases in line with the production plan.

Target on mine costs and all-in sustaining costs for 2017 are in the ranges of $600-$630 per ounce and $810-850 per ounce respectively.

“We are also pleased that our increased focus on exploration and resource development is now beginning to show results.”The addition of over 200koz of gold at a grade of five grams per tonne during the quarter is testament to the success of these efforts.

“I am confident that the life of mine will be further supplemented by further resource additions and upgrades,” said Mr Curtis.

He said Caledonia’s strategic focus continues to be the implementation of the investment plan at Blanket, which was announced in November 2014 and is expected to extend the life of mine by providing access to deeper levels for production and further exploration.






Additional Reading?

Request Free Copy