Blanket Mine produced 16,036 ounces of gold during the 1st quarter, representing a 13% decrease compared to the same period in the previous year.
The reduction is attributed to a series of minor mechanical issues and logistical challenges, all of which have now been resolved. Management has reiterated its production guidance for the year ending December 31, 2023, with an anticipated output of between 75,000 and 80,000 ounces of gold from the Blanket Mine.
The Bilboes oxide project produced a mere 105 ounces of gold during the quarter, and the ramp-up to commercial production has been slower than expected due to inconsistent grades, mechanical breakdowns, and the limited availability of spare parts and alternative equipment. The company had initially predicted on-mine cost per ounce of Bilboes oxide production to be between $1,200-1,320, making it a low-margin activity. Given the initial challenges faced in the project, management has decided to report actual production achieved each quarter at the oxide project as part of the pre-stripping activities.
Caledonia Mining Corporation CEO, Mark Learmonth, acknowledged the lower production levels at the Blanket Mine but is optimistic about the following quarters. He also reiterated the production guidance for Blanket and reaffirmed the company’s commitment to the Bilboes sulphide project, which is currently undergoing an updated feasibility study. Although the Bilboes oxide project is a low-margin activity, the company sees the project as a necessary pre-stripping exercise for the larger sulphide operation.
Said Mark Learmonth: “Gold production at Blanket is usually lower in the first quarter of each year and increases in the following quarters.
“This trend is in evidence this year, albeit production in the first quarter of 2023 was below our target due to a series of issues including equipment failures and logistical issues.
“These issues have been resolved and production to date in April has been higher than expected.
“The small-scale low-margin oxide operation at Bilboes is effectively a pre-stripping exercise for the larger sulphide project in respect of which we have commenced work on an updated feasibility study,” he concluded.