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Business Reporter
TORONTO Stock Exchange-listed Caledonia Mining Corporation says its Gwanda-based Zimbabwean associate Blanket Mine produced 10,822 ounces of gold in the first quarter and expects to meet its full year target of 50,000oz.
The target is premised on improved second half performance.
Caledonia said investment at Blanket increased from $6 million in 2014 to around $17 million last year as a result of the Revised Investment Plan.
The Revised Investment Plan, which was announced in 2014, is aimed at increasing Blanket’s output to about 80,000oz of gold by 2021.
During the comparable period last year, gold output at Blanket Mine was 9,960oz.
“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’s chief executive Steve Curtis in an update last week.
For the remaining part of the year, quarterly production at the mine is expected to increase progressively to an estimated 14,000oz by the fourth quarter of 2016.
Caledonia, which owns 49 percent of Blanket Mine, announced early this year that it had sold forward 15,000oz of gold production under a six-month collar and cap arrangement.
It is hoped that the hedge arrangement that set up the gold price between $1,050 per oz and $1,080 per oz would give it greater clarity over cashflows until July when production at the mine is expected to increase.
The Revised Investment Plan also seeks to enhance the mine’s operational efficiency and improve its ability for further deep level exploration and development, thereby extending its life.
In February, the Chamber of Mines of Zimbabwe has said mining companies were struggling to break-even due to rising production costs against a background of depressed international mineral prices.
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