MATABELELAND South-based gold mining company, Blanket Mine, says equipping of its Central Shaft has been slower than anticipated due to the adverse impact of Covid-19.
The development is likely to shroud production guidance for next year and beyond with uncertainity, the company said. Blanket Mine’s production guidance is anticipated at 75 000 ounces (oz) next year before reaching 80 000oz in 2022 and beyond.
Despite the negative impact of Covid-19 on equipping of the Central Shaft at Blanket Mine, the mining entity remains focused on this year’s production guidance of between 53 000oz and 56 000oz.
Last year, Blanket Mine, which is owned by Caledonia Mining Corporation, announced that it had completed a US$44 million Central Shaft sinking programme and was now working on equipping the shaft ahead of commissioning in the third quarter this year.
In a commentary following the publication of Blanket Mine’s production update for the quarter and six months ended June 30, 2020, Caledonia chief executive officer Mr Steve Curtis said while the coronavirus pandemic had no appreciable effect on Blanket’s production in the quarter, its impact will be felt going forward.
“Work on Central Shaft has been slower than planned because several members of the supervisory team returned to South Africa when the lockdown started in late March . . . it is not possible to predict when travel and other restrictions will be lifted so that work can resume on the project as planned and it is likely the timetable for commissioning of the Central Shaft will be extended to an indeterminate extent.
“This may affect the anticipated build-up in production, which is currently expected to be 75 000 ounces of gold in 2021 and 80 000 ounces of gold from 2022 onwards but it is not currently possible to provide revised guidance,” he said.
Mr Curtis said in light of the improved performance and the brighter outlook for 2020 and beyond, Caledonia increased its quarterly dividend from 6,875 cents per share to 7,5 cents per share in January 2020.
At the end of June, in light of Blanket’s strong performance, the higher gold price and the return to normal levels of production including renewed access to supply chains, Caledonia increased its quarterly dividend further to 8,5 cents per share, which means the cumulative increase in the quarterly dividend in 2020 is 23,6 percent.
“The board will review Caledonia’s future dividend distributions as appropriate while considering the balance between delivering returns to shareholders and pursuing the significant growth opportunities within Zimbabwe and in line with a prudent approach to financial management,” he said.
Meanwhile, during the period under review, Caledonia recorded a 12,4 percent increase in gold ouput to 27 732 ounces compared to 24 660oz in the relative period last year_The Chronicle
