CALEDONIA Mining Corporation’s gold production for the nine months to September 30, 2018 fell by 0,4% to 39 558 ounces from 39 710 ounces recorded over the same period last year. The mining company, which runs Blanket Mine in Gwanda, saw its profit rise to $10,170 million up from $7,907 million.
Bullion production in the quarter ended September 30 was 13 978 ounces — 2,9% down from 14 396 ounces over the same period last year.
Gold production in the quarter was lower than the comparable quarter due to lower grade, the company said.
“The third quarter of 2018 was an improvement on the second quarter of the year: we addressed some of the operating challenges which the business experienced in previous quarters; cost control remained good; and Caledonia stabilised its cash position and working capital movements,” Caledonia said in a statement.
“Production of 13 978 ounces was 3% down on the third quarter of 2017 (the ‘comparable quarter’) and marginally below our expectations. We took the decision to tighten and slightly reduce our 2018 full year production guidance from our original guidance range of 55 000 to 59 000 ounces to a range of 54 000 to 56 000 ounces.”
Mine costs per ounce increased by 5% during the quarter due to higher equipment maintenance costs and increases in the cost of certain consumables.
Adjusted earnings per share for the quarter of 33,1 cents were 17% lower than the comparable quarter, due to a slightly weaker realised gold price and increased production costs.
Caledonia says it remains on track to achieve the production target of 80 000 ounces per year by 2021 at its Blanket Mine and believe the successful completion of the central shaft is expected to result in increased production, reduced operating costs and increased flexibility to undertake further exploration and development, thereby safeguarding and enhancing Blanket’s long-term future.
“Difficulties in obtaining sufficient foreign exchange may jeopardise Caledonia’s ability to implement the central shaft project as planned. Caledonia intends to evaluate further investment opportunities in Zimbabwe that may not fall underneath Blanket’s ownership,” the company said.
Tonnes milled during the quarter were significantly higher at 151 000 tonnes, 14% higher than the second quarter of 2018 and 11% higher than the comparable quarter
“Grade for the quarter remained below expectations at 3,12g/t, as we continued to experience some mining dilution due to the introduction of long-hole stopping in the narrower reef width areas, due to safety considerations.
Corrective measures have been taken to improve the accuracy of drilling, which are expected to result in improved mined grades in the remainder of the last quarter of 2018 and thereafter,” Caledonia chief executive Steve Curtis said.