LIVINGSTONE MARUFU
New York Stock Exchange-listed resources firm, Caledonia Mining Corporation says gold output at its Zimbabwe unit, Blanket Mine, fell 7% in the quarter (Q1) to March due to disruptions caused by Covid-19 induced lockdown which restricted movement of people and raw materials and heavy rainfall experienced during the reviewed period.
Gold output at the Gwanda-based Blanket Mine declined to 13,197 ounces in Q1,2021 from 14,233 ounces recorded during the same period in 2020.
Caledonia chief executive officer, Steve Curtis was, however, optimistic that despite the slump, the miner was on track to hit its production target this year.
“Production in the first quarter of 2021 was slightly below our target and below the comparable quarter in 2020 albeit at a level that allows us to maintain our 2021 production guidance of 61,000 to 67,000 ounces for the full year,” Caledonia chief executive officer, Steve Curtis said.
He added: “Gold production has often been lower in the first quarter of each year and increases in the following quarters.
The rainy season this year saw unprecedented rainfall causing flooding at the mine and resulted in several lost shifts during the period.
“These temporary issues have now been rectified and with the Central Shaft now operational we remain on track to hit our 80,000 ounce target in 2022,”he said.
The new projections are credited to the relaxation of the Covid-19 regulations and the subsidence of the rainfall.
Curtis said indications are that the operational improvements will be expected in the latter part of 2021 and is expected to spill into 2022.
Caledonia is targeting more gold claims in Zimbabwe as the resources firm moves to expand its footprint on the local market.
Recently, it secured exclusive rights to explore and acquire the mining claims in the gold rich Connemara North area in the Gweru district as well as Glen Hume claims in the same area.
The claims in Gweru are believed to cover 350 hectares of huge gold deposits.
The mine has embarked on an aggressive exercise and at one time, Caledonia targeted gold assets owned by the Zimbabwe Mining Development Corporation.
Blanket Mine has completed its Central Shaft project, which is expected to increase production, reduce operating costs, and increase the flexibility to undertake further exploration and development.
The project cost US$67m and was funded through internal cash flow.
Commissioning of the shaft project, which is expected to potentially secure Blanket Mine’s operating future for the next 20 years, is expected before the end of the first half of 2021.
Once Central Shaft is commissioned, the miner expects to increase production to between 61 000 and 67 000 ounces this year.
Boosted by the Central Shaft, Caledonia expects to ramp up production to 80 000 ounces next year.
The mine is also planning to construct a 12megawatt solar plant at Blanket Mine with the funding of the US$13m projects expected to be raised from 600,000 shares before expenses.
Caledonia is anticipating that the new solar plant will provide about 27% of daily electricity to Blanket.
