GOLD production at Caledonia Mining Corporation (Caledonia)’s flagship operation — Blanket Mine — declined 9% to 33 472 ounces in the first half of this year compared to the prior period due to several first quarter mechanical breakdowns.
The Victoria Falls Stock Exchange-listed mining concern also said its asset, Bilboes Oxides would be placed under care and maintenance with effect from October 1, 2023.
In its 2023 second quarter production update, Caledonia said production at Blanket in the second quarter was 17 436 ounces, representing an 8,7% increase on the first quarter of 2023.
“After an encouraging start to the second quarter at Blanket, production was below expectations in May and the first half of June,” Caledonia chief executive officer Mark Learmonth said in an update.
“Management interventions to identify and address the problems appear to have been successful and production improved substantially in late June and early July. Production in the first week of July was at a record level and was almost 400 ounces better than planned.
“While we have much work to do to make up for the production shortfall from the first six months, we are confident that we will do so and we, therefore, reiterate our production guidance for 2023 of between 75 000 and 80 000 ounces of gold.”
He added: “The outlook for the Bilboes Oxides is insufficiently certain unless it is done in conjunction with the waste stripping for the sulphide project. Accordingly, we have decided to return this project to care and maintenance until the work commences on the larger sulphide project when the remaining oxide material will be mined and processed alongside the sulphide ore.
“This outcome has no bearing on the quality of the much larger sulphide project which was the sole reason for acquiring Bilboes.”
Low production at Blanket in the first quarter was due to several factors which impacted the implementation of plans in certain mining concessions.
These factors included a high level of missed blasts and errors in blasting accuracy which contributed to inadequate face advances.
“Production for the first six months of 2023 was lower than the first six months of 2022 due to the issues arising in the quarter in addition to difficulties encountered in the prior quarter which, as previously advised, included several mechanical breakdowns,” Caledonia said.
Bilboes Oxides produced 1 076 ounces of gold in the second quarter, a 971 ounces jump from the 105 ounces produced in the first quarter of 2023.
There was no production at the Bilboes Oxides in 2022.
The Bilboes Oxides was intended as a small-scale, low-margin and short-term project which was primarily justified by the benefits of pre-stripping in anticipation of the development of the larger sulphide project.
The company has previously withdrawn guidance for the Bilboes Oxides and, in the absence of a reasonable prospect of it making a cash contribution, the project will be returned to care and maintenance.
Mining and metallurgical processing will continue at Bilboes Oxides until the end of September; thereafter leaching of material that has already been deposited on the leach pad will continue.
Oxide mining and processing will resume when the stripping of the waste for the sulphide project commences, the company indicated. – (Newsday)