CALEDONIA Mining Corporation Plc has cut its 2026 production guidance for Blanket Mine in Zimbabwe after third quarter output fell 11 percent due to compressed air shortages in high-grade areas and gold retention in the plant.
The Jersey-headquartered miner announced gold production from Blanket for the quarter ended September 30, 2026 of 17 030 ounces, down from 19 106 ounces in Q3 2025.
Gold produced in the nine months ended September 30, 2026 was 49 158 ounces compared to 58 846 ounces in the same period in 2025.
According to Caledonia, gold production in the quarter was adversely affected by shortage of compressed air at certain high-grade, high-volume mining areas and temporary increase in gold inventory in metallurgical plants.
Mining activity in September was increasingly focused on deeper 30 and 34 levels, 990 and 1 110 metres below surface respectively.
Four additional compressors had been procured to facilitate mining at these deeper levels and increased development following appointment of contractors earlier in year.
However, delays in delivery and deployment severely impacted production at crucial high-grade areas.
“Two of the new compressors have now been deployed and the last two have now been released from the port and are being transported to the mine. Accordingly, it is anticipated that normalised production will be achieved during Q4,” the company said.
In September, equipment was introduced to improve efficiency, recovery and security in the gravity gold circuit, which recovers free-gold.
Approximately 45-50 percent of Blanket’s gold is free gold recovered from gravity circuits.
Difficulties encountered in commissioning new equipment meant approximately 1 100 ounces of free-gold were retained in the metallurgical plant.
“The retained gold should be recovered over a period of time, commencing mid-October, after the increased elution capacity has been commissioned,” Caledonia said.
Operational stats show tonnes milled in Q3 2026 was 215 539 tonnes (Q3 2025: 212 504 tonnes), but grade fell to 2,67 g/t from 3,00 g/t, recovery to 92,2 percent from 93,3 percent, resulting in lower ounces recovered.
For nine months, tonnes milled rose to 625 904 tonnes (2025: 619 174 tonnes) while grade dropped to 2,65 g/t from 3,16 g/t and recovery to 92,3 percent from 93,7 percent.
Due to lower than anticipated in the third quarter, management reduced production guidance for Blanket for FY2026 from range of 72 000 to 76 500 ounces to range of 69 000 to 72 500 ounces.
Lower guidance implies 2026 fourth quarter production of approximately 19 800 to 23 300 ounces, expected to benefit from increased compressed air capacity, recovery from mid-October of 1
100 ounces retained within metallurgical plant, processing at Lima satellite plant of additional ore arising from seven-day shift system, improved mining flexibility and increased access to higher-grade areas and increased elution capacity including processing of 58,04 tonnes of accumulated activated carbon containing approximately 1 166 ounces at average grade of 625 grammes per tonne.
Costs guidance revised upwards on lower volumes: On-mine cost per ounce sold revised to US$1 700-US$1 900 per ounce sold (previously US$1 600-US$1 800), all-in sustaining cost (AISC) guidance revised to US$2 650-US$2 850 per ounce sold (previously US$2 500-US$2 700), capital expenditure guidance for Group in FY2026 reduced to US$94,3 million (previously US$103,3 million), reflecting timing only, primarily components of 132kV power line project now expected in 2027, not material reduction in overall scope.
Revised capex comprises US$44 million sustaining capex at Blanket (down from US$48m), US$3,5 million growth capital at Blanket (unchanged), US$43 million growth capex at Bilboes (previously US$48m) and US$3,8 million exploration at Motapa (unchanged).
Management believes revised guidance will have no adverse effect on the group’s ability to utilise internal cash flows to contribute towards funding Bilboes development project.
Chief executive officer Mr Mark Learmonth said: “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. We are addressing these issues through installation of additional compressor capacity and commissioning of increased elution capacity.”
“We expect production in the fourth quarter to benefit from improved access to higher-grade mining areas, recovery from mid-October of approximately 1 100 ounces retained within the metallurgical plant and processing at Lima of additional ore arising from a seven-day shift system.
“These measures also support our plans for 2027 and are intended to support more consistent production, improved grade and lower unit costs.”
Mr Learmonth said although the company revised the guidance for 2026 to reflect third-quarter performance, Blanket remains a robust and cash-generative operation.
“We remain focused on delivering stronger performance in the fourth quarter and implementing operational improvements required to support production and cash generation in 2027,” Mr Learmonth said.-herald
