By Business Reporter
ON the back of the third quarter push in gold output initially projected to reach 59 000 ounces by end of 2018, Caledonia Mining Corporation’s Zimbabwean unit, Blanket Mine gold output increased 10 percent to approximately 13 978 ounces in the third quarter to September 30 2018.
This marked a 3 per cent below production in the third quarter of 2017.
Blanket Mine has now revised downwards its 2018 gold production guidance from 55,000 to 59,000 ounces to a range of between 54,000 and 56,000 ounces.
Cumulatively, gold produced for the 9 months to September 30 2018 totalled 39,559 ounces, marginally behind the 39,710 ounces produced in the corresponding period in 2017.
Announcing its quarterly gold production for the period under review, Caledonia Mining Corporation Chief Executive Officer, Steve Curtis welcomed improved production levels in the third quarter, which he said are expected to continue into the fourth quarter of 2018.
“Production of 13,978 ounces in the third quarter of 2018 is a welcome improvement on the production levels achieved in the first two quarters of 2018. The Company expects this improvement to be maintained in the fourth quarter of 2018.”
The directors of Caledonia marginally reduced and narrowed the previously forecasted range of 2018 production guidance from 55,000 to 59,000 ounces to a range of between 54,000 and 56,000 ounces.
“Notwithstanding the improved operating performance, we believe it is appropriate to adjust and tighten our production guidance for 2018 from the previous level of 55,000 to 59,000 ounces to a slightly reduced level of 54,000 to 56,000 ounces,” said Curtis.
Caledonia remains on track to achieve its production target of 80,000 ounces in 2021.
“The sinking of the central shaft continues according to plan and within budget, we look forward to commencing production from the central shaft in 2020 which is expected to deliver the Company’s growth plan to achieve 80,000 ounces by 2021.”
“As a result of the adjusted 2018 production guidance and the recent weakness in the gold price, assuming the current spot gold price is maintained for the rest of 2018 and assuming no material change in the Company’s operating costs, Caledonia expects full year 2018 adjusted earnings to be in the range of 140c to 150c per share.”
“This is a reduction from the previous earnings guidance of 165c to 190c per share but is 3 per cent to 12 per cent higher than the earnings achieved in 2017.”
“Along with this adjustment and in light of the weaker than budgeted gold price in recent months we have issued new earnings guidance for 2018 of between 140 and 150 cents per share,” he said.
Curtis said the grade during the quarter continued to be below expected levels and remains a key area of focus for the business.
“I am pleased with the progress that our technical teams have made with our focus on improved mining practices to minimise dilution and I have confidence that their efforts will continue to deliver results.”
He said Caledonia remains confident in the underlying geological model for Blanket and that the longer term potential of the ore body is robust.
“We expect grade to return to budgeted levels in the fourth quarter of 2018,” he said. ENDS//