Chronicle Editor
Nqobile Bhebhe
CALEDONIA Mining Corporation, which owns Blanket Mine in Gwanda, Matabeleland South province, recorded low gold production of 16,141 ounces in the first quarter of this year due to several operational challenges but remains confident of producing between 75,000 and 80,000 ounces of gold this year.
The Victoria Falls Stock Exchange (VFEX)-listed group announced the completion of the acquisition of Bilboes in January this year, as a critical cornerstone in its aggressive drive to develop a mid-tier, multi-asset Zimbabwe-focused gold production business.
In its latest financial results for the quarter ended March 2023 issued Monday, Caledonia Corporation said the quarterly results are the first to reflect Caledonia’s ownership of Bilboes. Bilboes Gold is a gold mining entity that owns three major gold mines in Matabeleland North, 75km north of Bulawayo, and was once ranked among the country’s 10 biggest gold producers. It has produced approximately 288 000 ounces of gold since 1989.
Now under the giant Victoria Falls Stock Exchange-listed group, Bilboes is projected to produce an average of 168 000 ounces per year over a 10-year lifespan of the mine.
Chief executive officer, Mr Mark Learmonth, said the first quarter of the year presented several operational challenges at Blanket, which resulted in lower production and higher costs.
“We are confident these issues have been identified and addressed, and we reiterate our production guidance for Blanket of between 75,000 and 80,000 ounces of gold,” he said.
Mr Learmonth said although the start-up of the Bilboes oxide mining activity was disappointing, it does not detract from the attraction of the main sulphide project.
“The sulphide resource is based on direct drilling results and has been subjected to independent third-party reviews. Caledonia has commenced work on a revised feasibility study for the sulphide project, which will consider updated commercial assumptions and will focus on the most judicious way to commercialise this project with the objective of maximising value for Caledonia shareholders,” he said.
“Following Caledonia’s oversubscribed fundraise in March and April, which raised approximately $16,5m, our balance sheet and operational flexibility have been improved and we are delighted to have new shareholders on our register who believe in our vision, and we hope will support us in the next stage of our growth.”
The mining firm said in the period under review, 16,141 ounces of gold were produced of which 16,036 ounces were from Blanket and 105 ounces were produced at the Bilboes oxide mine.
The rate of production improved in April with 5,202 ounces of gold being produced in the month, which equates to an annualised production rate of approximately 80,000 ounces per annum.
The firm is reviewing the commercial viability of the low-margin oxides mining activities, which includes assessing the scope to mine and process oxide material from the recently acquired Motapa property, which is immediately adjacent to Bilboes.
It noted that approximately 217 ounces of gold were produced from the Bilboes oxide mine in April, a further approximately 338 ounces of gold was contained in material that was deposited onto the leach pad in April and is expected to report to production in May.
The start-up of the additional, small oxide mining and processing activity at Bilboes was affected by contractors’ drill rigs underperforming and variations between the realised and anticipated grade at the first target mining area.
The mining firm said the financial performance was largely affected, as expected, by the integration and start-up of the Bilboes operation and technical challenges at Blanket. It noted that the inclusion, for the first time, of Bilboes in the quarter’s report inevitably makes it difficult to carry out like-for-like comparisons with the equivalent quarter in 2022.
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