Caledonia’s new shaft lifts record ore tonnage, earnings double

Blanket Mine: New mine shaft increasing tonnage

Caledonia Mining’s investment in a new shaft at Blanket Mine is starting to show results; ore tonnage reached new records in the second quarter, helping the company double earnings for the period.

The company commissioned a central shaft earlier this year, and in the three months to June, Blanket mined and milled 165,000 tonnes of ore, the biggest quarterly tonnage.

“This is a new production record for any quarter and reflects the contribution of the Central Shaft which was commissioned at the end of March 2021 and the build-up towards the target of 80,000 ounces per annum from 2022 onwards,” Caledonia says in a trading update released Thursday.

Gold output was 16,710 ounces in the quarter, 24% higher than the 13,499 ounces produced in Q2 2020. This is also a new production record for a second-quarter at the mine. Production was 29,907 ounces in the First Half, 8% more than the 27,732 ounces in the first half of 2020.

Golden profits

EBITDA – excluding asset impairments, net foreign exchange gains and losses, and export incentives – of US$14 million, sharply rose by 103% from US$6.9 million in Q2 2020.

Gross revenues of US$30 million were 31% above the US$22.9 million in the second quarter of 2020. Gross profit for the quarter was US$13.9 million, up 51% on the US$9.2 million in the same quarter last year.  

Caledonia’s revenue for the six months was US$55.7 million from US$46.5 million, as a result of the increased output and a firmer gold price over the period. Gross profit was US$24.3 million from US$19.7 million last year.

The company is targeting 61,000 – 67,000 ounces for 2021, before ramping up to over 80,000 ounces per year from 2022, as a result of the new shaft. Last year, Blanket produced a record 57,899 ounces. There are signs that the company will meet its targets, with production in July, at 5,995 ounces, being above average monthly production.