Caledonia says quarterly gold output up 7.3%, maintains full-year target

Caledonia Zimbabwe

Caledonia Mining has maintained its full-year gold production forecasts for Blanket Mine despite its third quarter output falling short of targets.

The company, listed on the NYSE and AIM in London, says gold production in the quarter to September was up by 7.3% to 13,646 in the quarter to September, but down 2.4% on the same period in 2018. For the nine months to September, Blanket produced 38,306 ounces, 3.2% below the same period of 2018.

Despite this, Caledonia is keeping its full-year output guidance of between 50,000 and 53,000 ounces, and says it remains on track to meet its targeted production of 80,000 ounces by 2022.

In August, Caledonia cut its full year production forecasts from a previous range of 53,000 ounces to 56,000, due to grade dilution and power outages at Blanket Mine.

“Production in the third quarter of 2019 was slightly below our target but showed steady growth in production on the previous two quarters. Production in the quarter had a difficult start due to significant interruptions in the supply of electricity in July and early August although the electricity situation improved substantially later in the quarter,” CEO Steve Curtis said.

“Caledonia remains on track to achieve our guidance of 50,000 to 53,0001 ounces for the full year.”

The first phase of a shaft-sinking project, which will see the company increasing its output substantially, has been completed, Curtis said.

“The shaft has now entered the equipping phase of the project which we expect to be completed in mid-2020. We look forward to commencing production from the central shaft during the second half of 2020 which is expected to deliver the Company’s growth plan to achieve 75,000 ounces in 2021 and 80,000 ounces by 2022.”

On Monday, Caledonia said it has commissioned a new US$1.6 million oxygen plant at Blanket that will improve recoveries and cut the amount of cyanide used by the mine.