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Blanket Mine posts solid recovery

CALEDONIA Mining Corporation says its local unit, Blanket Mine, posted a strong recovery in output last month producing 5 470 ounces of gold.

In a performance update for the first quarter ended 31 March 2021, Caledonia said the April production figure was 24 percent above the average monthly output in the quarter.

The mining group remains confident of achieving this year’s full guidance of between 61 000 and 67 000oz.

“Gold production in April showed a marked improvement and Blanket produced 5,470 ounces in April, which is better than planned,” Caledonia chief executive officer, Mr Steve Curtis, said, adding that the strong recovery in performance has continued into May.

He has said although the first quarter was marred by several challenges, he was pleased that the constraints had been addressed.

“The first quarter of 2021 raised several challenges, which I am pleased to say have now been rectified. The fall-of-ground at AR South has been resolved and this high-grade area is back in full production,” he said.

“The underground flooding, which resulted in five lost production days, was caused by exceptionally heavy rains. Rainfall in the first quarter was more than two-and-a-half times higher than the average for the same period in previous years.”

In response, Mr Curtis said the company increased its pumping capacity to curb any repetition of such an event in future.

He said heavy rain also meant that water supply for operation was assured.

Mr Curtis said operating costs were well controlled with the increase in the on-mine cost per ounce predominantly due to lower grades and recoveries, which has now been addressed. The cost per tonne mined increased by only four percent in the quarter compared to the first quarter of 2020 and this was due largely to increased usage of diesel generators because of continued grid supply problems.

He said given the high fixed cost base, expectation was that costs per ounce would reduce as production increases.

“Early in the quarter the proportion of dollar-denominated revenue that we must surrender for local currency increased from 30 per cent to 40 percent,” said Mr Curtis.

“We have accommodated this change by increasing our local currency denominated expenditures and by participating in the weekly foreign currency auctions.”

He said the shift in responsibility for making payments for gold deliveries from the Reserve Bank of Zimbabwe to its gold refining subsidiary, Fidelity Printers and Refiners Limited, has simplified and improved the mechanism for receiving payments. Chronicle

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