Firmer gold prices helped Caledonia lift third-quarter earnings by 37%, offsetting rising costs and lower production from Blanket Mine over the period.
Gross profit in the three months to September came in at US$19.3 million, up from $14.1 million in the third quarter of 2023 due to the higher gold price and lower costs of the Bilboes oxide mine. However, gross profit was lower than the second quarter’s US$23 million.
Quarterly revenue was US$46.9 million, while the company made US$135.5 million in revenue in the nine months to September.
The higher profitability is despite gold production slowing down in the quarter. Blanket Mine produced 18,992 ounces in the three months, 12% lower than the 21,772 ounces produced in the same quarter last year, which was a record quarter for the company. The drop in output is due to lower grades and recoveries.
For the nine months, Blanket produced 56,815 ounces (nine months 2023: 55,244 ounces). Caledonia expects to produce between 74,000 and 78,000 ounces at Blanket for the year.
The company is, however, concerned by rising costs, mainly from power and labour. All-in sustaining cost for the quarter was US$1,501 per ounce (Q3 2023: $1,268 per ounce).
“We continue to explore ways to reduce on-mine costs at Blanket – particularly the cost of electricity and labour where several initiatives are being implemented and further measures are under consideration,” CEO Mark Learmonth says.
The good news for the mine is that the first exploration at Motapa, a new mining asset that Caledonia bought from Metallon in 2022, has shown “highly encouraging results”.
“Motapa sits adjacent to Bilboes, which is where the company plans to develop a major new high grade open pit gold mine. These initial results confirm that Motapa will continue to form a key role in the company’s growth strategy,” says Learmonth.
