Caledonia Mining Corporation missed its first quarter (Q1) 2023 gold production target after Blanket Mine slumped by 13 percent to close with 16 036 ounces against 18 515 ounces realized same period last year.
The decline was caused by mechanical breakdowns and logistical issues which the group says it has since resolved.
Caledonia however believes the setback will not affect reaching its 2023 full year production target of between 75 000 and 80 000 ounces of gold.
“Production was lower than last year due to several individually insignificant mechanical breakdowns and logistical issues which have now been resolved and production in the early part of April 2023 has been better than expected,” the group said in its performance update.
“Management re-iterates production guidance for Blanket for the year to December 31, 2023 of between 75,000 and 80,000 ounces of gold.”
newly-acquired Bilboes oxide project commenced production of gold from oxides derived from pre-stripping works in the last few days of the Quarter, producing 105 ounces of gold.
“Commencement of oxide production at Bilboes has been slower than anticipated, having been adversely affected by inconsistent grades, mechanical breakdowns and the poor availability of spare parts and alternative equipment.”
As highlighted in the production guidance dated January 13, 2023, the on-mine cost/oz of Bilboes oxide production was anticipated to be $1,200-1,320 and is hence a relatively low margin activity which is primarily justified by the parallel benefit of pre-stripping in anticipation of the development of the Bilboes sulphide project.
The Company is reviewing the initial evidence of this activity given some of the initial challenges and relative to the larger sulphide project, for which a feasibility study is being updated.
“Accordingly, going forward, we will report actual production achieved each quarter at the oxides project as part of the pre-stripping activities and, accordingly, have withdrawn guidance on the low-margin oxide production.”
