Caledonia Mining Corporation Plc has lowered its full-year 2026 gold production guidance for Blanket Mine after output declined during the third quarter, while also raising its projected operating costs amid equipment and processing challenges, Mining Zimbabwe can report.
By Rudairo Mapuranga
The company now expects Blanket, its flagship Zimbabwean gold operation, to produce between 69,000 and 72,500 ounces in 2026, down from its previous forecast of 72,000 to 76,500 ounces.
Gold production for the three months ended September 30, 2026, fell 10.9% to 17,030 ounces from 19,106 ounces recorded in the corresponding period last year, while nine-month output declined 16.5% to 49,158 ounces from 58,846 ounces.
The revised guidance means Blanket must produce approximately 19,842 to 23,342 ounces in the fourth quarter to meet its new annual target, requiring a stronger performance than the 17,030 ounces recorded in the third quarter.
Caledonia attributed the weaker performance to insufficient compressed-air capacity in deeper, higher-grade mining areas and difficulties commissioning equipment in the metallurgical plant, which temporarily retained gold within the processing circuit.
The production shortfall comes as the company advances mining at deeper underground levels, where inadequate compressed-air capacity has constrained operations.
Equipment Constraints Hit Production
Caledonia said the shortage became more pronounced as mining activity increasingly focused on the 30 and 34 levels, located approximately 990 and 1,110 metres below the surface, respectively.
The company had procured four additional compressors to support operations at depth, but delays in their delivery and deployment affected production during the quarter.
Two compressors have since been deployed, while the remaining two have been released from port and are being transported to the mine.
The company also reported difficulties commissioning new equipment in the gravity gold circuit, resulting in approximately 1,100 ounces of free gold being temporarily retained in the metallurgical plant.
Caledonia expects the commissioning of an enlarged elution vessel in mid-October to facilitate the recovery of the retained gold.
Separately, the company is processing 58.04 tonnes of accumulated activated carbon containing an estimated 1,166 ounces of gold at an average grade of 625 grammes per tonne.
The relationship between the estimated gold in the activated carbon and the approximately 1,100 ounces retained in the processing circuit should be distinguished when assessing the potential recovery benefit, as the two figures should not automatically be treated as separate quantities of additional production.
Caledonia also expects increased ore processing at its Lima satellite plant to support fourth-quarter output following the introduction of a seven-day shift system.
Higher Costs Accompany Lower Production Forecast
Alongside the production downgrade, Caledonia has increased its cost guidance for Blanket, reflecting the revised operating outlook.
On-mine costs are now expected to range between US$1,700 and US$1,900 per ounce sold, compared with the previous forecast of US$1,600 to US$1,800.
All-in sustaining costs (AISC) have also been revised upwards to between US$2,650 and US$2,850 per ounce sold, from US$2,500 to US$2,700 previously.
The revisions raise both ends of the on-mine cost and AISC ranges by US$100 to US$150 per ounce.
The combination of lower production and higher unit-cost guidance places greater importance on the planned operational improvements, particularly as the company seeks to increase output from deeper mining areas and improve processing performance.
However, the extent to which the expected fourth-quarter recovery will improve annual cost performance will depend on production levels, operating efficiency and the timing of the planned interventions.
Capital Spending Shifts into 2027
Caledonia has also reduced its 2026 group capital expenditure guidance to US$94.3 million from US$103.3 million.
The US$9 million reduction primarily reflects the timing of expenditure on certain projects, including components of the 132kV power line project that are now expected to be incurred in 2027.
The company said the revised forecast does not represent a material reduction in the overall scope of its planned capital projects.
The distinction is significant because the lower expenditure forecast reflects a shift in the timing of investment rather than a material scaling back of the planned projects.
Management Targets Fourth-Quarter Recovery
Caledonia Chief Executive Officer Mark Learmonth said the third-quarter performance had fallen short of expectations, citing the compressed-air shortage and temporary retention of gold in the processing circuit.
“Production in the third quarter was below our expectations, principally due to insufficient compressed air capacity in deeper, higher-grade mining areas and the temporary retention of gold within the processing circuit,” Learmonth said.
He said the installation of additional compressor capacity and increased elution capacity were intended to address the operational constraints.
Learmonth expects fourth-quarter production to benefit from improved access to higher-grade mining areas, the recovery of gold retained in the metallurgical plant and additional ore processing at Lima.
The measures are also intended to support more consistent production, improved grades and lower unit costs in 2027.
The revised guidance places the focus on whether the additional equipment and processing improvements can deliver the production increase required in the final quarter.
Blanket’s performance remains central to Caledonia’s Zimbabwean gold operations, making the successful implementation of the recovery measures important to its near-term production outlook and operating-cost performance.
The scientific and technical information in the company’s announcement was reviewed and approved by Craig James Harvey, MGSSA, MAIG, Caledonia’s Vice President of Technical Services and a Qualified Person under National Instrument 43-101.
