adminBLANKET Mine gold output for the third quarter ending September declined year on year to 9, 890 ounces from 12,042 last year on the back of lower head grades and weakening gold prices. Resultantly, gold production for the nine months to September stood at 31,354 ounces.
The company said, however, that its revised investment plan was expected to address these issues, with the mine remaining on track to produce the targeted 400,000 ounces this year.
Average mined grade for the rest of the year has since been projected to be between 3,6g per tonne and 3,7g per tonne, compared with initial expectations of 3,83 grammes per tonne.
“Lower production had an adverse effect on Caledonia’s financial performance due to the high fixed cost component of Blanket’s on-mine costs which means that at lower production levels, the fixed costs are spread over fewer production ounces with a resultant increase in the average unit cost of production.
“On-mine costs at Blanket remain low and are better than was expected, notwithstanding the lower head grade, primarily due to the improved metallurgical recovery and reduced cyanide consumption as a result of the re-introduction of oxygen sparging into the CIL circuit,” the company said.
The average achieved price per ounce of gold in the Quarter was US$1,256 compared to US$1,330 in Q3 of 2013.
Cash from operating activities in the quarter was $3,6 million and Caledonia’s cash and cash equivalents increased from $25,8 million to $26,9 million at the end of the quarter.
The company says it will maintain the existing dividend policy of 6 cents per annum, paid in equal quarterly instalments, in 2015 and would thereafter review the policy for 2016, in terms of its operational performance and the prevailing market conditions. – Ziana
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