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Business Reporter
DESPITE Blanket Gold Mine’s output in the second quarter remaining largely flat at 12 521 ounces from 12 510 oz in the prior comparable period, parent firm Caledonia Mining Corporation remains confident that its flagship mine will deliver its long-term target.

Caledonia is targeting to deliver annual target of 52 000 to 57 000 oz a year, while also aiming to meet its long-term target of 80 000 oz by 2021.

Blanket Mine produced just over 25 000 oz of gold in the first half of this year, at an all-in sustaining cost of $856 per oz. Adjusted earnings a share of $0,45 were 6 percent higher than the $0, 3 reported for the first half of 2016.

Earnings a share for the second quarter of the year were, however, 38 percent lower year-on-year at $0,19. All-in sustaining costs remained under control at $855 per ounce for the quarter, a decrease of eight percent on the corresponding period in 2016

Caledonia said operating cash flow for the second quarter of the year had reached $4,7 million. “Operating cash flow in the quarter of $4,7 million contributed to a strong balance sheet and supports the funding of the Central Shaft project. The company’s gross cash position at the end of the quarter was $10,9 million, approximately flat on the previous quarter and year.

“To keep cash balances flat during a quarter in which we invested $4,2 million and paid a quarterly dividend of $0,7 million is testament to the strong cash generation of the mine,” said management.

Commenting on the results Caledonia CEO Mr Steve Curtis said:

“Production and financial performance at the Blanket Mine was adversely affected in the Quarter by lower grades and some logistical difficulties in underground material handling. Adjusted EPS of 18, 9 cents is 38 percent lower than in the corresponding period in 2016; adjusted earnings for the first half of the year were 45,7 cents — six percent higher than in the first half of 2016.

“Notwithstanding the challenges during the quarter, Caledonia continues to deliver earnings in-line with the previous period and we anticipate being in a position to grow from this base as our investment to increase production bears fruit.

“Management have implemented several remedial measures in the quarter to improve our underground material handling capacity and to address the logistical constraints. The benefit of these actions was evident in July when we saw an improvement in ore tonnages, grade and gold recoveries. I expect that further benefits will be realised in the second half of 2017.

“We remain confident of achieving our 2017 full year guidance of between 52 000 and 57 000 ounces.”

The Blanket Mine is located in the south-west of Zimbabwe approximately 15 km west of Gwanda, the provincial capital of Matabeleland South.