adminmarket prices and a significant ramp up in production.
Gold output for the second quarter topped 8 226 ounces up 12 percent on the previous quarter and some 141 percent over the comparable period last year.
Gross profits rose by 300 percent reaching US$6,3 million compared to US$1,5 over the same period last year.
The mine’s improved second quarter performance was driven by record high gold prices on the world market which, last week, topped an all-time high of US$1 740 an ounce.
The precious mineral has in recent weeks been a haven for investors in view of a weaker United States dollar and other major currencies in the European Union.
The Gwanda-based mine – owned by Caledonia Mining Corporation – achieved an average price of US$1 512 an ounce up from US$1 192 over the same period last year.
At the same time production costs declined to about US$585 per ounce, down from US$648 per ounce in the first quarter.
Caledonia’s president and chief executive officer, Mr Stefan Hayden, was upbeat about the company’s strong performance.
“Caledonia has had a very strong performance for the second quarter and first half of this year. We have made significant progress in addressing the remaining production constraints which, once solved, should enable us to reach our target of 10 000 ounces per quarter.
“During the second quarter Blanket Mine made payments of approximately US$3,3 million to the Government in respect of direct and indirect taxation, royalties, licence fees etc. I hope that payments of this magnitude will address the widespread misconception in Zimbabwe that mining companies do not pay tax,” Mr Hayden said.
The strong performance has also come at a cost. The higher production volumes have exposed the historic under-investment in equipment and maintenance, which has given rise to an increase in the breakdowns of key plant and equipment.
Caledonia vice president Mr Mark Learmonth, however, maintains that the company’s strong cash position means it is well positioned to deal with such challenges.
“Production for the Blanket Mine has increased tremendously and that alone means equipment will break down, perhaps needing refurbishment or complete replacement.
“The great thing is that we are now in a position to fund such work. If we need to really replace any equipment completely then we can and pay for it in cash,” he said.
Caledonia has been investing in improving infrastructure to boost production at the mine.
“The new raise bored ore pass became fully operational at the end of July and has substantially improved the efficiency of the underground operations and reduced ore handling costs,” said the Caledonia president.
The company also said power supplies over the period were relatively stable with the company managing to maintain production during interruptions following the installation of alternative supply systems.
Blanket Mine is aiming to achieve its target production level of 40 000 ounces per annum by year end.
Online Reporter