GOLD output at Caledonia Mining Corporation slipped to 13 197 ounces during the first quarter of this year, compared to 14 233 ounces during the same period last year after shafts at Blanket Mine were flooded as heavy rains pounded Zimbabwe, the firm has said.
However, Caledonia’s revenue marginally increased during the period on the back of stronger gold prices on the international markets.
Chief executive officer Steve Curtis said gross revenue rose to US$25,7 million during the first quarter, from US$23,6 million last year.
“Rainfall in the first quarter was more than two-and-a-half times higher than the average for the same period in previous years,” Curtis said in a market update.
“In response, we increased our pumping capacity so that we can manage any repetition of this event in future. On the positive side, the heavy rain means that water supply, which has sometimes been a cause for concern, is assured for the foreseeable future. Higher revenues reflect a higher realised gold price offset by lower sales due to lower production. Revenues include the sale proceeds of 1 584 ounces of gold in work-in-progress brought forward from 2020,” he said.
The heavy rains were felt across Zimbabwe’s gold mining firms, with their effects showing through a plunge in total output during the period.
The slowdown was also compounded by the fact that Zimbabwe looked up to its 1,5 million poorly-equipped artisanal miners for about half of its annual gold output.
These miners were the hardest hit by flooding.
“Gold production in April show a marked improvement and Blanket produced 5 470 ounces in April, which is better than planned. The strong recovery in performance has continued into May and we are confident that we will achieve our full year guidance of between 61 000 and 67 000 ounces,” Curtis said.
Caledonia blasted off its first gold ore at the US$67 million Central Shaft at Blanket Mine last month, marking the beginning of a new era following six years of protracted development.
Central Shaft represents one of the most recent significant gold mining projects in Zimbabwe that is seen as a game-changer to Caledonia’s Zimbabwean interests.
In a shareholder update, Curtis said last month’s commissioning of the shaft was key to fulfilling the firm’s Zimbabwean ambition.
“I am delighted to announce that our new Central Shaft, which is the deepest shaft of any gold mine in Zimbabwe, is fully operational,” he said.
“We can now start to hoist rock, men and material on a daily basis, which will solve our hoisting constraints and facilitate the planned expansion in mine capacity targeting 80 000oz (ounces) of gold production per year. This has been an owner-funded and built project by the Blanket team and I would like to thank everyone for their hard work and especially for achieving the completion of the shaft without any serious accidents, recording only two lost time injuries,” he added.
Central Shaft is expected to ramp up production, trim overheads and build fresh capacity to undertake further exploration and development at one of Zimbabwe’s biggest and most resilient gold mines.
Curtis said production guidance for 2021 ranged from 61 000 to 67 000oz.
He projected that output would rise 38% by next year, hitting the highly anticipated 80 000oz mark. Newsday