Blanket Mine gold  output jumps 6pc

Enacy Mapakame

Caledonia Mining Corporation Blanket Mine’s gold production for the 2024 first quarter jumped 6 percent to 17 050 ounces compared to the same quarter in the prior year on the back of increased higher tonnage and grade as well as improved gold recovery.

Cumulatively, the group’s gold production came in at 17 476 ounces for the quarter compared to 16 141 ounces achieved during the same period in the prior year.

Of the total gold output, 426 ounces were produced at the Bilboes Oxide Mine.

In April alone, the Gwanda-based Blanket Mine produced 7 956 ounces of gold compared to 5 194 ounces produced during the same month last year.

Caledonia has also attributed the positive results to the deep-level drilling programme at Blanket Mine, as announced in January 2024, which is currently evaluating the continuity of the mineralised zones on the Blanket and Eroica ore bodies.

Total drilling for 2023 was 13 280 metres and the results will be reflected in a revised mineral resource statement and expected increase in life of mine to be announced shortly.

“The first quarter of 2024 got off to a strong start with an increase in production and profit, supported by a favourable gold price.  This has continued through April and into May,” said Caledonia chief executive officer Mark Learmonth, commenting on the performance.

“We were highly encouraged by the results from the underground exploration programme, which has yielded excellent results indicating that the Blanket, Eroica and AR South ore bodies have better than expected grades and widths at depth.

“The results of these drilling programme are being incorporated into a new technical report summary for Blanket Mine, which we will announce shortly. It will show a meaningful increase in the life of the mine at Blanket,” he said.

He added that management is also considering various options for developing Bilboes, to optimise capital allocation and maximise the uplift in value for Caledonia shareholders.

“I look forward to updating investors with these results in the next few weeks,” said Mr Learmonth.

In terms of financial performance, gross profit more than doubled to US$13,8 million compared to $5,8 million recorded during the same quarter last year due to higher gold revenue of $38,5 million and lower production costs.

Earnings Before Interest Tax, Depreciation and Amortisation (EBITDA) during the period came in at US$9,9 million compared to US$2,3 million.

On-mine cost per ounce of US$993 at Blanket in the quarter was virtually unchanged from 2023 first quarter amount of US$991.

According to the group, all-in-sustaining cost (AISC) was US$1,296 per ounce from the comparable period’s US$1,412 per ounce.

The AISC per ounce in the quarter decreased by 8,2 percent predominantly due to the lower production costs incurred at Bilboes and the non-recurrence of advisory costs for the Bilboes acquisition in 2023.

The AISC includes the benefit of the solar plant — electricity saving of US$51 per ounce for the quarter.

“Although lower than Q1 2023, AISC is expected to be higher for the full year than in previous years due to the classification of certain items of ongoing capital expenditure on projects that are now treated as ‘sustaining’ investment rather than ‘expansion’  investment,” said the group.

Caledonia incurred a foreign exchange loss of US$4,1 million due to currency volatility in the country.

Adjusted earnings per share amounted to US26,9 cents from a loss per share of 29,1 US cents.

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