Blanket Mine posts 6pc jump in gold production
Thu April 11 2024
Victoria Falls Stock Exchange (VFEX) listed resources group Caledonia Mining Corporation said gold production at its Gwanda-based gold mining operation, Blanket Mine, jumped by 6 percent in the first quarter to March 2024. According to the group, total production at Gwanda reached 17 050 ounces during the quarter under review, which was 6 percent ahead of the same period in 2023.
Caledonia said the increased production was derived from 8 fewer production days (9,3 percent less) compared to the first quarter last year, which was due to the production cut-off for gold delivery set to March 21, 2024.
Sales volumes jumped 17 percent to 18 450 ounces during the quarter under review compared to 15,797 ounces that were sold during the same quarter last year. The group indicated that ounces sold during the quarter under review include 3 057 ounces of gold work in progress classified as inventory at the end of 2023 (Q1 2024: 1 657 ounces).
Commenting on the first quarter performance, Caledonia chief executive officer (CEO) Mr Mark Learmonth said: “I am pleased that 2024 production at Blanket has got off to a strong start with over 17,000 ounces produced in the Quarter which, considering we had 8 fewer production days compared to Q1 2023, is an excellent result,” he said. “With the current high gold prices, it was good to see our gold sales ounces increase by 17 percent in Q1 2024 versus Q1 2023. Our significant investment in Blanket over the past seven years and completion of the Central Shaft has nearly doubled production, extended the mine life, and allowed the restart of underground exploration in 2023,” he said.
Caledonia maintains its annual production guidance at Blanket to hit between 74 000 to 78 000 ounces for the current financial year. The group also remains resolute on its plans of becoming a multi-asset gold producer in Zimbabwe, which will be achieved through scouting for more investment opportunities in the country. In all the initiatives, the Gwanda-based Blanket Mine will continue playing a critical role as its cash cow.
“We continue to see Blanket as the solid foundation for growth as we pursue our strategy to become a multi-asset gold producer.”
Despite the initiatives, the group has however warned of depressed full-year profitability weighed by increased operating costs at Blanket Mine, consisting of higher than expected overtime payments and power costs.
This includes several significant one-off, non-operating costs incurred during the fourth quarter period, which are expected to have a knock-on effect on profitability for the full year to December 31, 2023.
Mr Learmonth indicated that performance at Blanket Mine remained solid for the fourth quarter, but operating costs for the year rose, and higher financing costs as well as a one-off impairment charge related to a tax refund claim at the gold operation’s solar project also hit the company’s bottom line. “It is regrettable that, at a group level, we have been adversely affected by a series of higher-than-expected costs in the second half of 2023 which have had a negative effect on the full-year profitability,” said Mr Learmonth in an earlier update.
Source: https://www.herald.co.zw/