Caledonia Mining Cooperation has reported a new quarterly production record for its Gwanda-based subsidiary, Blanket Mine during the three months to September (third quarter) which reached 18,965 ounces of gold from 15,155 ounces realized same period last year following the commissioning of a new Central Shaft.
The quarterly output set the miner in a strong position to meet its target of between 61 000 ounce and 67 000 ounces of gold by end of year.
Year to date production (Q3) has reached 48,872 ounces, 14 percent above the 42,887 ounces produced in the first nine months of 2020.
“This has been another excellent quarter: record quarterly production of almost 19,000 ounces signifies the contribution that Central Shaft is already making. The commissioning and subsequent ramp-up of activity at Central Shaft met our best expectations and we have therefore been able to narrow our production guidance to the top end of our previous range. We remain on track to hit our 80,000 ounce target from 2022 onwards,” said Caledonia CEO, Steve Curtis in the company’s latest trading update.
Due to, inter alia, historic delays in the completion of the Central Shaft arising from COVID-19, the need to remediate the poor electricity supply from the Zimbabwe Electricity Supply Authority, and an upgrade to the workers’ village to accommodate a larger workforce, capital expenditure at Blanket in 2022 is now expected to be $27million.
Caledonia has also completed the purchase of the mining claims at Maligreen in the Zimbabwe midlands while it continues to evaluate Connemara North, in respect of which it has an option to purchase.
Revenue in the Quarter was 32 per cent higher than in Q3 2020 due to a 42 per cent increase in the quantity of gold produced and sold offset by a 7 per cent decrease in the average realised gold price.
Net cash generated by operations in the Quarter was $7.1 million, compared to $5.3 million in Q3 2020.
The increase was due to higher gross profit (due to increased production and lower costs per ounce), offset by increased working capital.
Meanwhile, in October, the Company declared and paid an increased dividend of 14 cents per share. This was the seventh increase in the quarterly dividend since October 2019 and an increase of 104 percent from 6.875 cents in October 2019.
