Caledonia Mining Corporation says output up 19% at Blanket
TAURAI MANGUDHLA
Caledonia Mining Corporation’s Zimbabwean gold miner Blanket Mine has reported a 19% growth in production to 14,233 ounces for the first quarter of 2020 to March 31 largely as a result of operational improvements in the previous year, the company has said.
The company is confident to achieve good levels of output despite restrictive operating conditions, under the national lockdown to prevent the spread of Covid-19, that have forced it run at between 70% and 80% capacity in line with social distancing standards and guidelines.
Blanket was granted permission to operate by government after demonstrating that its employees can be quarantined from surrounding areas and ability to reconfigure operations to reduce the risk of the virus being transmitted.
Caledonia CEO Steve Curtis said the production performance in the quarter under review is a credit to the company’s operational team and indicates that the operational improvements in the latter part of 2019 have continued into 2020.
“In previous years, gold production was lower in the first quarter of each year and increased in the following quarters.
Subject to the mine not experiencing any unforeseen production interruptions associated with the COVID-19 pandemic, I expect the quarterly production profile to be more evenly balanced throughout 2020 because of the increased focus on development,” Curtis said.
“To begin the year with a strong start, at a time of firm gold prices, has established a strong base which is helpful in withstanding any disruptions that may arise as a result of the current COVID-19 pandemic.”
Caledonia recently warned the lockdown in South Africa would affect its Zimbabwean operations.
The company said South Africa’s lockdown is expected to have knock-on effects for Caledonia as the supply chain for the procurement of a significant portion of mining consumables and capital equipment for Blanket Mine comes from South Africa.
The company had however increased critical spares and inventory in anticipation of these interruptions.
The company enters this lock-down situation with a strong balance sheet with cash on hand at March 25, 2020 of approximately US$12.5m in order to withstand interruption in production for several months in the event that the Covid-19 situation worsens.
In its previous annual results for the year to December 2019, Caledonia reported a 265% after tax growth to US$50.4m on account of a weakening Zimbabwean dollar which effectively saw operating and utility costs sliding.
Caledonia said profit in the year was further enhanced by a net foreign exchange gain of approximately US$30m.
Gold production stood at 55,182 ounces in 2019, compared to 54,511 ounces the previous year. Of the total production, 16,876 ounces were produced in the fourth quarter alone compared to 14,952 ounces in the fourth quarter of 2018.
In 2020, Caledonia forecasts gold production of between 53,000 and 56,000 ounces which is similar to 2019 pending the completion of the central shaft. Central shaft commissioning is expected in the last quarter of 2020 after which production can begin to ramp up with targets at approximately 75,000 ounces and 80,000 ounces in 2021 and 2022, respectively.
