Caledonia gold production up 10pc

HARARE - Toronto Stock Exchange-listed miner, Caledonia Mining Corporation (Caledonia), has recorded a 10 percent increase in gold production at its Blanket Mine (Blanket) in Zimbabwe despite the volatile international gold price.

Blanket produced 10 900 ounces in the three months to September this year compared to 9 890 ounces recorded in the same period in 2014.

Caledonia is in the middle of an underground development programme at Blanket, but in spite of this, and lower grades, output rose as the amount of ore mined hit record levels.

Revenues for the three months rose 17 percent to $15,8 million, though a $150 per ounce drop in the gold price meant pre-tax profits were flat at $2,95 million.

The Africa-focused mining group’s net profits rose to $1,7 million due to currencies and lower taxes, while cash held at the end of the period amounted to $19,6 million.

Caledonia’s chief executive Steve Curtis, said the company had made good progress underground at Blanket, with the tramming loop complete and work now getting underway on the No 6 Winze.

This will allow access below 750 metres and enable production to rise throughput for 2016 towards a target of 50 000 ounces.

“Caledonia’s cash position remains robust and gives us the confidence to continue to invest in Blanket,” he said, adding the company will also carry on paying a quarterly dividend of Canadian 1,5c

Caledonia did point to a drought in Zimbabwe that may affect electricity output from the local Kariba Dam, but in that event the company’s diesel generators would provide sufficient back-up power.

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