Caledonia profits up 16% after record gold production in ‘turning point’ year

Caledonia's Blanket Mine: Bilboes will increase Caledonia output four-fold

Caledonia Mining Company has reported a 16% jump in profits to US$54.1 million after 2021 gold output hit a new record, in a year the company describes as a “turning point”.

Gold production at Blanket Mine rose to 67,476 ounces from 57,899 ounces, as it benefitted from increased tonnage after the completion of the new shaft. The output came in at the top-end of the company’s projections and is the highest ever recorded at the mine.

“Operationally, the last 12 months have marked a turning point for the business. The Central Shaft has been a huge project costing approximately US$67 million, all funded through internal cashflow, and I am delighted that it was commissioned in the first quarter of 2021,” CEO Steve Curtis said Thursday.

Revenue grew from US$100 million in 2020 to US$121 million last year.

Gross profit for 2021 was US$54.1 million, 16% higher than 2020.  Caledonia sees even further growth in production this year. Guidance for 2022 is in the range of 73,000 to 80,000 ounces and 80,000 ounces for next year, which would be 38% more gold than Blanket produced in 2020.

The company has started installing a solar plant near Blanket to counter poor quality ZESA power supply.

Says Curtis: “To improve the quality and security of Blanket’s electricity supply, minimise our environmental footprint and help create a more sustainable future for our business, Caledonia is constructing the first phase of a 12 MWac solar plant that will provide approximately 27% of the average daily electricity demand at Blanket Mine.”

Completion is expected in June this year.

On expansion, Caledonia is completing underground development at Blanket and targeting the exploration potential that it believes lies in the older shallower areas of the mine, and in brownfield sites near the mine. Focus is also on finding out the full resource potential at Maligreen, the asset that it acquired near Gweru last year. Maligreen has an inferred resource of 940,000 ounces of gold.

“Caledonia continues to evaluate further investment opportunities in the Zimbabwe gold sector with a view to transforming the company into a mid-tier, multi-asset Zimbabwe-focussed gold producer,” Curtis said.