Victoria Falls Stock Exchange (VFEX) listed Caledonia Mining Corporation Plc, says its local unit – Blanket Mine, reported a 13 percent decrease in gold production during the first quarter of 2023.
Caledonia attributed the decline to several mechanical breakdowns and logistical issues, which have since been resolved.
The Gwanda based mine produced 16,036 ounces of gold during the quarter, compared to 18,515 ounces in the same period last year.
“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,” said group chief executive officer Mark Learmonth.
Despite the dip in production, the group has re-iterated its production guidance for the year, aiming to produce between 75,000 and 80,000 ounces of gold.
Already, production in the early part of April 2023 has been better than expected, according to management.
“In light of the foregoing, we reiterate production guidance for 2023 of between 75,000 and 80,000 ounces of gold from Blanket.
“We expect to publish further operating information and the financial results for the quarter on or about May 15, 2023,” said Learmonth.
Meanwhile, Caledonia Mining’s Bilboes oxides project has commenced gold production. The project produced 105 ounces of gold in the last few days of the quarter.
However, the project’s commencement has been slower than anticipated, due to inconsistent grades, mechanical breakdowns, and poor availability of spare parts and equipment.
As highlighted in the production guidance at the beginning of the year, the on-mine cost per ounce of Bilboes oxide production was anticipated to be $1,200 to $1,320, making it a low-margin activity.
According to the group, the project is primarily justified by the parallel benefit of pre-stripping in anticipation of the development of the Bilboes sulphide project.
Caledonia is reviewing the initial evidence of this activity, given some of the initial challenges and relative to the larger sulphide project, for which a feasibility study is being updated.
Going forward, Caledonia Mining will report actual production achieved each quarter at the oxides project as part of the pre-stripping activities. Accordingly, the company has withdrawn guidance on the low-margin oxide production.
Bilboes is a large high grade gold deposit located about 75km North of Bulawayo.
The group completed the acquisition of Bilboes Gold Limited for 1,5 million shares in January this year after meeting regulatory requirements, in a transaction completed by specialist fund manager Baker Steel Resources Trust Limited.
Caledonia acquired the company which owns the Bilboes gold project in Zimbabwe at a time the group is scouting for more investment opportunities in the country as it pushes to become a multi-asset gold producer.