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Oliver Kazunga, Senior Business Reporter
GWANDA-based gold mining firm, Blanket Mine, has injected US$5,6 million in capital expenditure during the third quarter ended September 30, 2019 as it continues to invest for the future.
The gold mine, which is owned 49 percent by Caledonia Mining Corporation, has continued to deliver a strong cash generation with an after-tax operating cash flow for the quarter amounting to $4,9 million.
“Capital investment during the quarter was $5,6 million as we continued to invest for the future at Blanket in order to deliver our growth target to produce 75 000 ounces by 2021 and 80 000 ounces by 2022,” said Caledonia chief executive officer Mr Steve Curtis in a statement accompanying results for the period under review.
He said the continued devaluation of the domestic currency this year resulted in higher local inflation, which presents challenges for workers’ morale.
“Cash on hand at the end of the period under review amounted to $8 million. This was after an adverse working capital movement of approximately $700 000 during the quarter, which was partly due to the erosion of local credit as a result of high inflation,” said Mr Curtis.
“This strong cash generation continues to support the capital investment on the new central shaft, which has now entered the equipping phase following the completion of shaft sinking in the second quarter.”
He said during the quarter under review, Blanket Mine delivered a strong financial performance supported by a firmer gold price and increased production. With production at 13 646 ounces of gold during the third quarter, output was 7,3 percent higher than the previous period and in line with group’s expectations for the full year.
“I am pleased to report that production in October has continued this positive trend with production of 5 596 ounces in October at a grade of 3,55 grammes per tonne.
“I look forward to updating the market on the full year and we reiterate our full year production guidance of 50 000 to 53 000 ounces for 2019,” he said.
Mr Curtis said tonnes milled showed a significant improvement on the previous two quarters and the average milled grade for the quarter was 3,19 grammes per tonne, an increase on the previous quarter’s grade of 3,11 grammes per tonne.
“We continue to focus our attention on improving grade through minimising mining dilution and whilst there is still work to be done in this area it is pleasing to see an improvement in the average grade, which, when combined with higher plant tonnage, delivered favourable production and cost performance,” he said.
— @okazunga
Online Reporter