Caledonia: Q2 gold output up 6.2%, half year production 12.5% better than last year

Blanket Mine Caledonia Zimbabwe
Blanket Mine: new shaft to be commissioned 2020

Caledonia Mining says second-quarter gold production from its Blanket Mine was 6.2% up on the same period last year, while half-year output was 12.5% better than this time last year.

Blanket, near Gwanda, produced 13,499 ounces of gold in the quarter to June, an increase of 6.2% on the 12,712 ounces produced in the corresponding quarter of 2019.

Gold produced for the first half of 2020 was 27,732 ounces, some 12.5% above the 24,660 ounces produced in the first half of 2019.

Caledonia says it is maintaining its 2020 full year production guidance of 53,000 to 56,000 ounces and remains on track with progress towards its target of 80,000 ounces by 2022.

The production of 13,499 ounces in the second quarter was an “outstanding achievement given the challenges faced during the quarter as a result of the COVID-19 Pandemic”, said CEO Steve Curtis.

Zimbabwe’a mining sector has forecast lower production this year due to supply disruptions caused by the COVID-19 outbreak.

“To have achieved a 6.2% increase on the comparable quarter of 2019 during a period where our workforce and supply chains were disrupted is a performance of which every employee should be justifiably proud. Thankfully the virus has not affected our operations or the broader Zimbabwean gold mining sector too seriously although we remain vigilant.”

He added: “This strong performance and high gold prices have ensured that the business remains on a very solid foundation as we prepare for the next phase of our growth with the completion of the central shaft in 2020 and increased production to 80,000 ounces by 2022.”

Dividend

In June, Caledonia declared a further increased quarterly dividend of US$0.085 a share as stable production, cost control and high gold prices increase cash generation.

Caledonia expects to complete equipping of the new central shaft in the fourth quarter of 2020. Once commissioned, the shaft will boost cash flow. Annual output will rise 30% to 75 000 oz in 2021 and 80 000 oz from 2022, as capital expenditure drops and operational efficiencies improve due to the new shaft.

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