Continuous investment pays dividends for Caledonia

19 Apr, 2022 - 09:04 0 Views
Continuous investment pays dividends for Caledonia Source- Goldprice Gold Price Preview: March 29 - April 2

eBusiness Weekly

Business writer 

 

Continuous investments have seen gold production at Caledonia Mining Corporation’s Gwanda-based unit – Blanket Mine – increasing 40 percent to 18 515 ounces in the first quarter to 31 March 2021 compared to 13 197 ounces produced in the previous quarter.

The company is also confident that its investments are likely to see gold production for 2022 expected to range between 73 000 to 80 000 ounces.

Group chief executive, Steve Curtis, in a production update said the output is a record for any first quarter which is usually affected by the rains.

“…during this quarter we have set a new first quarter production record and 18,515 ounces which is ahead of our expectations and reflects the increased capacity at Central Shaft,” he said.

“18 515 ounces is ahead of our expectations and reflects the increased capacity at Central Shaft.

..we are on track to meet our annual production target,” said Curtis.

He said the ramp-up in production towards the quarterly target of 20,000 ounces means that the group is on track to meet annual production targets.

However, during the period, the Group witnessed a fatal accident that resulted in the death of a Blanket employee.

Caledonia became the third listing on the Victoria Falls Stock Exchange (VFEX), where it listed by way of introduction of Depository Receipts as Caledonia’s shares cannot be directly traded in Zimbabwe, due to some limitations on the New York Stock Exchange where they are also listed.

In its previous quarter, the company said it continued to evaluate further investment opportunities in Zimbabwe’s gold sector to transform the Company into a mid-tier, multi-asset Zimbabwe-focused gold producer.

The group highlighted that the last 12 months have marked a turning point for the business and the Central Shaft has been a huge project costing approximately $67 million, all funded through internal cash flow and was commissioned in the first quarter of 2021.

In the year to December 2021, production reached 67,476 ounces, which was above the top end of the guidance range and was a new record for annual production.

Caledonia in order to improve the quality and security of Blanket’s electricity supply, minimise environmental footprint and help create a more sustainable future for the business, Caledonia is constructing the first phase of a 12 MWac solar plant that will provide approximately 27 per cent of the average daily electricity demand at Blanket Mine.

According to Curtis, the project, which is expected to yield a modest return to shareholders, is expected to be completed in mid-2022.

During the year under review, Caledonia acquired the mining claims at Maligreen in the Zimbabwe Midlands which is estimated to host a NI 43-101 compliant inferred mineral resource of approximately 940,000 ounces of gold in 15.6 million tonnes at a grade of 1.88g/t.

Curtis said the immediate focus on this asset is to improve the confidence level of the existing resource base and the company is currently re-assaying historic drill cores.

Government is targeting 100 tonnes of gold per year by 2023, a figure which is expected to help the mining sector earn US$12 billion annually.

The multi-billion-dollar industry will be driven by gold, platinum, diamond, chrome, iron ore, coal, lithium, and other minerals.

The background of mineral contribution to the US$12 billion is that US$4 billion will come from gold, US$3 billion in platinum, US$1 billion in diamonds, US$1 billion in coal, US$1 billion in chrome, ferrochrome and carbon steel, half a billion in lithium and US$1,5 billion in other minerals, making it US$12 billion.

The artisanal and small-scale miners (ASM) are also expected to play an important role towards the mining milestone with sector player’s committing to contribute US$4 billion by the targeted period.

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