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Nelson Gahadza
Victoria Falls Stock Exchange (VFEX) listed Caledonia Mining Corporation says it continues to evaluate further investment opportunities in Zimbabwe’s mining gold sector after hitting record gold output
Caledonia, which intends to transform itself into a mid-tier, multi-asset Zimbabwe-focused gold producer, posted record annual production of 67,476 ounces at Blanket mine for the year ended 31 December 2021.
The company became the third listing on the US dollar based VFEX, having listed by way of introduction of depository receipts, as its shares cannot be directly traded in Zimbabwe due to limitations of the New York Stock Exchange where it is also listed.
Steve Curtis, the group’s chief executive office said operationally, the last 12 months had marked a turning point for the business and its Central Shaft project had been a rewarding investment.
The shaft deepening project cost the company approximately $67 million, all funded through internal cash flow and was commissioned in the first quarter of 2021.
“Caledonia continues to evaluate further investment opportunities in the Zimbabwe gold sector with a view to transforming the company into a mid-tier, multi-asset Zimbabwe-focussed gold producer,” he said.
Mr Curtis said production during the year was 67,476 ounces, which was above the top end of the guidance range and was a new record for annual production.
He added that the robust operating performance was supported by good cost control, which saw gross profit for the year coming in at $54,1 million, 16 percent higher than 2020. Cash generated from operations before working capital increased by 17 per cent from $42,4 million to $49,6 million.
“Now that the Central Shaft is commissioned, we expect further increases in production and guidance for 2022 is a range of 73 000 to 80 000 ounces while from 2023 onwards it is 80,000 ounces, 8 per cent higher than in 2020,” said Mr Curtis.
He noted that Caledonia would continue to increase the dividend in 2021 as the total dividends paid in 2021 were 50 cents per share, almost 50 per cent higher than in 2020.
Mr Curtis said in order to improve the quality and security of Blanket’s electricity supply, minimise environmental footprint and help create a more sustainable future for the business, Caledonia is constructing the first phase of a 12 MWac solar plant that will supply approximately 27 per cent of the average daily electricity demand at Blanket Mine.
He said this project, which is expected to yield a modest return to shareholders, was expected to be completed in mid-2022.
He added that Caledonia’s immediate strategic focus was to complete the remaining underground development associated with the Central Shaft project, which is expected to increase production, reduce operating costs and increase the flexibility to undertake further exploration and development at depth, thereby safeguarding and enhancing Blanket’s long-term future.
“We also believe there is excellent exploration potential in the older shallower areas of the mine and in brownfield sites immediately adjacent to the existing Blanket footprint,” he said.
During the year under review, Caledonia acquired the mining claims at Maligreen in the Zimbabwe Midlands which is estimated to host a NI 43-101 compliant inferred mineral resource of approximately 940,000 ounces of gold in 15,6 million tonnes at a grade of 1,88g/t.
Curtis said the immediate focus on this asset is to improve the confidence level of the existing resource base and the company is currently re-assaying historic drill cores.
“Thereafter we expect to prepare a feasibility study to commercialise the existing resource before we engage in further exploration on the claims area along strike, at depth and at a previously unexplored zone in the claims area.
“Our approach to new projects is highly disciplined: after further evaluation, the Company has decided not to exercise the options to acquire the Connemara North property as it does not meet our investment criteria. During the Year, we also divested non-core assets in the vicinity of Blanket,” he said
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