• Tue. Jul 16th, 2024

Caledonia Mining production slips 13% in Q1

ByEconomic Times

May 17, 2023

By ETimes

Gold producer Caledonia Mining announced Q1 2023 gold production of 16,141 ounces from its Blanket and Bilboes mines, down 13% compared to Q1 2022 production of 18,515 ounces.

The company explained that production at Blanket of 16,036 ounces was lower than last year and below target due to several “individually insignificant” mechanical breakdowns and logistical issues which have now been resolved and production in the early part of April 2023 has been better than expected.

Caledonia added that the company re-iterates production guidance for Blanket for the year to December 31, 2023 of between 75,000 and 80,000 ounces of gold.

Importantly, according to a press release, Bilboes has commenced production of gold from oxides derived from pre-stripping works in the last few days of the quarter, producing 105 ounces of gold.

However, the company noted that commencement of oxide production at Bilboes has been slower than anticipated, “having been adversely affected by inconsistent grades, mechanical breakdowns and the poor availability of spare parts and alternative equipment.”

Caledonia said it hopes that gold mining from near surface oxide deposits will be cash neutral and will help the company to maintain Bilboes’ operational integrity pending completion of the feasibility study.

The company reported all-in sustaining cost of US$1,412 per ounce from Q1 2022’s US$848 per ounce, adding that the increase was due to the higher on-mine cost and advisory fees payable on the completion of the Bilboes acquisition.

The company’s gross revenues were US$29.4 million in Q1 2023, lower than in Q1 2022 US$35.1 million, primarily due to lower gold production at Blanket. EBITDA contribution amounted to $2.25 million in Q1 2023 from Q1 2022’s US$14.5 million).

“The disappointing contribution was due to lower revenues and higher operating costs at Blanket and the costs at the Bilboes oxide mine,” the company said.

Caledonia also announced Q1 2023 total comprehensive loss of US$4.6 million from Q1 2022’s total comprehensive income of US$8.3 million, net cash outflow from operating activities of US$0.9 million Q1 2022 had net cash inflow of US$10.2 million, and net cash and cash equivalents of US$3.2 million down from Q1 2022’s US$14.4 million.

CEO Mark Learmonth said, “The first quarter of 2023 presented several operational challenges at Blanket which resulted in lower production and higher costs. We are confident these issues have been identified and addressed, and we reiterate our production guidance for Blanket of between 75,000 and 80,000 ounces of gold.”

Caledonia Mining’s primary asset is the Blanket gold mine in Zimbabwe. The company has also committed to evaluate investment opportunities in Zimbabwe; since November 2021 it has acquired Maligreen, Motapa and Bilboes projects. The company’s vision is to become a multi asset gold producer – Harare

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