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Caledonia Mining Corporation’s gold production for the first quarter of 2016 at its 49 percent owned subsidiary, Blanket Mine increased 8,7 percent to 10 822 ounces as expansion initiatives at the mine start paying dividends.Approximately 10 822 ounces of gold were produced during the quarter, representing an 8,7 percent increase on the gold produced in the first quarter of 2015 (9 960 ounces) and a six percent decrease on the gold produced in the fourth quarter of 2015 (11 518 ounces).
The mining group said quarterly gold production for the remainder of 2016 is expected to increase progressively to 14 000 ounces by the fourth quarter of 2016 as production from below 750 metres increases over the course of 2016.
Targeted gold production for the year is approximately 50 000 ounces, unchanged from previous guidance.
Sales for the first quarter will include production from the quarter plus the work in progress brought forward from 2015 of 671 ounces.
“Production in the first quarter was slightly higher than planned, although lower than the previous quarter due to the combined effects of the New Year and Easter holiday periods.
“Towards the end of the first quarter, production commenced from below 750 metres via the No. 6 Winze and an additional decline development into the AR South ore body.
“We remain on target to achieve our full year production target of 50 000 ounces,” said Caledonia chief executive Steve Curtis.
The mining group has completed developing a tramming loop and sinking a new central shaft as it eyes ramping up production at Blanket Mine to 80 000 ounces by 2021.
Last year the mining group said it would develop a tramming loop 750 metres below surface, continue to sink the Number 6 Winze to provide access to deeper level resources and sink a new six-metre diameter central shaft from surface to 1 080 metres.
Increased production reflects continued progress in implementing the Revised Investment Plan, announced on November 3, 2014.
The completion of Tramming Loop on 22-Level (750 metres below surface) slightly ahead of schedule in mid-2015 was an important factor which contributed to increased production by alleviating underground logistical problems which constrained production in 2014.
Mr Curtis said due to the high fixed cost component at Blanket and the generally stable environment for input costs, projected increase in production to approximately 50 000 ounces of gold is expected to result in a lower average production cost per ounce.
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