Blanket gold output jumps 21pc

Victoria Falls Stock Exchange (VFEX) listed resources group Caledonia Mining Corporation Plc revenue for the nine months to September 30, 2022 rose 21 percent to US$107,9 million on the back of solid gold production at its Blanket Mine.

Gold production at Blanket rose 22,2 percent to 59 726 ounces compared to the 48 872 ounces produced in the first nine months of 2021.

During the quarter to September 30, 2022, Blanket Mine recorded 21 120 ounces of gold were produced, which was 11,4 percent higher than the 18 965 ounces produced in the same quarter in 2021 and a new quarterly production record.

Gross profit in the nine-month period jumped 26,1 percent to US$50,5 million compared to a 26,1 percent increase on the US$40 million achieved in the first nine months of 2021.

Earnings before interest, tax, depreciation and amortisation (EBITDA) in the quarter (excluding asset impairments, depreciation, and net foreign exchange gains) of US$16,9 million was achieved, an 11,8 percent increase on the US$15,1 million in the third quarter of 2021.

According to Caledonia, this represents EBITDA (excluding asset impairments, depreciation, and net foreign exchange gains) for the nine months of US$52,9 million compared to US$35 million during the same nine months’ period last year.

Adjusted earnings per share for the quarter came in at US60,7 cents compared to US68,9 cents in the same period in 2021.

Net cash from operating activities in the quarter jumped to US$8,9 million from US$7,1 million in the prior year period.

Chief executive officer (CEO) Mark Learmonth highlighted the group was on course to meet its production targets as the group continues on its quest to become a multi-asset gold producer and production efficiencies.

“This has been another terrific quarter: production of just over 21 000 ounces set a new quarterly production record. In both of the last two quarters we have exceeded our quarterly production target of 20 000 ounces and we are on-track to achieve the top end of our annual production target of between 73 000 and 80 000 ounces of gold.

“The benefit of higher production was diluted by a lower gold price and a modest increase in costs as, in common with other mining companies, we experience inflation on consumables and diesel.

“Costs were also adversely affected by the increased use of diesel generators due to a further deterioration in the grid supply,” he said.

However, Caledonia is close to seeing the benefit of the new solar plant at Blanket Mine, which is currently being commissioned.

“This, along with other initiatives to reduce our diesel consumption, should curb the inflationary pressure on our costs. We have made good progress on implementing our strategy to acquire a portfolio of high-quality exploration and development assets in the Zimbabwe gold sector,” said Learmonth.

During the second half of the year, Caledonia announced that it had signed an agreement to purchase Bilboes Gold Limited, which is the holding company for a large, high-grade, open-pitable gold resource.

On completion of the transaction, the group intends to prepare a feasibility study to identify the most judicious way to commercialise the project with regard to the availability of funding on acceptable terms.

Caledonia also intends to re-start the oxides operation at Bilboes, under a tribute arrangement before completion of the transaction, with a view to creating a cash-generative operation within approximately six months of the commencement of the activity.

This builds on the acquisition of the Maligreen claims in November 2021 and the group has evaluated the existing geological information.

Earlier this month, Caledonia also announced the acquisition of Motapa, a large exploration property that is contiguous to the Bilboes gold project. Motapa was formerly owned and explored by Anglo American Zimbabwe prior to its exit from the Zimbabwean gold sector in the late 1990s.-ebusinessweekly