Blanket reviews targets

HARARE - Caledonia Mining Corporation (Caledonia) has adjusted gold production at its Blanket Mine (Blanket) in Zimbabwe from 54 000 to 56 000 ounces.

Caledonia’s chief executive officer Steve Curtis said the production of 13 978 ounces in the third quarter ended September 30, 2018 is a welcome improvement on the production levels achieved in the first two quarters of 2018.

“Notwithstanding the improved operating performance, we believe it is appropriate to adjust and tighten our production guidance for 2018 from the previous level of 55 000 to 59 000 ounces to a slightly reduced level of 54 000 to 56 000 ounces,” he said in an update.

The New York Stock Exchange-listed gold miner said as a result of the adjusted 2018 production guidance and the recent weakness in the gold price, assuming the current spot gold price is maintained for the rest of 2018 it expects full year 2018 adjusted earnings to be in the range of 140 cents to 150 cents per share.

“This is a reduction from the previous earnings guidance of 165 cents to 190 cents per share but is three percent to 12 percent higher than the earnings achieved in 2017,” Curtis said.

Gold produced during the nine months to September 30, 2018 was 39 559 ounces, marginally below the 39 710 ounces produced in the comparable period in 2017.

Curtis said the firm is pleased with the progress the technical teams have made on focus on improved mining practices to minimise dilution.

“Grade during the quarter continued to be below expected levels and remains a key area of focus for the business. We remain confident in the underlying geological model for Blanket and that the longer- term potential of the ore body is robust. We expect grade to return to budgeted levels in the fourth quarter of 2018.”

Caledonia remains on track to achieve its production target of 80 000 ounces in 2021.

“The sinking of the central shaft continues according to plan and within budget, we look forward to commencing production from the central shaft in 2020 which is
expected to deliver the company’s growth plan to achieve 80 000 ounces by 2021.”

Recently, Caledonia said it intends to increase shareholding at Blanket by 64 percent following amendments of the indigenisation requirements in the country, subject to the execution of a legally binding sale agreement and regulatory approvals.

Caledonia said it has signed a memorandum of understanding with Fremiro Investments to buy Fremiro’s 15 percent shareholding for $16,6 million

The firm also announced an upgrade in the resource base at Blanket which will see the total resource endowment at the mine to almost 1,8 million ounces.  Caledonia said they have increased total resources at Blanket by 86 percent since 2011 in addition to mining over 300 000 ounces over this period. As at June 30, 2018, Caledonia had a net cash of approximately $5,3 million. — The Financial Gazette

Comments (1)

Nyika zvairikungotongwa nevapambi vanongopinda neku kanadha ne Ositireriya kana zudhu. Kutambura ndekwevanhu kwete vana shafu.

Mbavha - 27 October 2018

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