Caledonia remains optimistic
Caledonia Mining Corporation, remains upbeat of meeting production targets for the year despite a slow start to the year with first quarter production falling 13 percent due to some operational challenges faced during the period under review.
In the first quarter to March 31, 2023, its local unit, Blanket Mine, produced 16,141 ounces of gold, compared to 18,515 ounces in the same period last year.
The decrease in production was primarily attributed to lower-than-expected mine production at the Gwanda – based Blanket Mine and a slower-than-anticipated restart of the Bilboes Oxide Mine.
Of the total gold produced, 16,036 ounces were from the Blanket Mine, while the Bilboes Oxide Mine contributed 105 ounces.
According to the group, the lower production at the Blanket Mine was due to minor mechanical breakdowns and logistical issues, which have since been resolved.
Despite the challenges faced in the first quarter, Caledonia Mining maintains its production guidance for Blanket Mine for the year, expecting to produce between 75,000 and 80,000 ounces of gold. On-mine costs at Blanket are also expected to decrease in future quarters due to increased production and lower electricity costs.
Already, production at the mine improved in April, with 5,202 ounces of gold produced during the month, indicating an annualized production rate of approximately 80,000 ounces per annum.
“The first quarter of 2023 presented several operational challenges at Blanket which resulted in lower production and higher costs. We are confident these issues have been identified and addressed, and we reiterate our production guidance for Blanket of between 75,000 and 80,000 ounces of gold,” said group chief executive officer Mark Learmonth.
Caledonia Mining is currently reviewing the commercial viability of its low-margin oxides mining activities, including the possibility of mining and processing oxide material from the recently acquired Motapa property, which is adjacent to Bilboes.
The company produced approximately 217 ounces of gold from the Bilboes oxide mine in April, with an additional 338 ounces expected to be reported in May.
While the resources group is upbeat of meeting its target, due to the uncertainties surrounding the Bilboes oxide mine, the company has withdrawn its production and cost guidance for that operation. Consequently, Caledonia Mining has re-stated its all-in sustaining costs (AISC) per ounce, excluding the Bilboes oxides, in the range of US$935 to US$1,035.
The company has resumed deep-level drilling at the Blanket mine to upgrade inferred mineral resources and identify new resources, thereby extending the mine’s life. Additionally, Caledonia Mining aims to complete a feasibility study on the Bilboes sulphide project in the first quarter of 2024, with the objective of maximizing value for its shareholders.
Caledonia Mining recently raised approximately US$16,5 million through an oversubscribed fundraise, which has improved its balance sheet and operational flexibility. The company looks forward to the support of its new shareholders in the next phase of its growth.-ebusinessweekly
