Caledonia Mining Corporation (CMC) announced the implementation of an investment plan at Blanket mine, as part of its strategic focus.
The plan is expected to extend the life of the mine by providing access to deeper levels for production and further exploration, which is now beginning to show results.
Blanket mine, CMC’s Zimbabwe mining unit, produced 13 428 ounces of gold for the third quarter to September 30, 2016. This was a 7% increase from 10 927 ounces achieved in the second quarter. Growth in production and declining cost trends are expected at the mine as they approach the middle of the investment programme.
The target production is 80 000 ounces by 2021
The gold was sold at an average price of $1 312 an ounce, an increase from $1 106 an ounce in the third quarter last year. Profit before tax during the period went up to $4,11 million from $2,24 million from the previous year. Their cash position continued to grow with net cash of $12 million at the end of September compared to $10 million as at June 30,2016.
Mr. Steve Curtis, Caledonia’s President and Chief Executive, said the underlying operating and financial performance of Blanket mine remains strong and is on an upward trajectory. He mentioned that the quarter presented a number of indirect cost headwinds, which resulted in adjusted earnings being 25% lower than the second quarter of 2016.
The costs include those associated with the evaluation of new investment opportunities and share-based expense relating to long-term incentive plan. There is still hope and expectations to deliver full year earnings higher than 2015, despite the headwinds.
Planned installation of a third mill at Blanket mine in the quarter is expected to further improve plant capacity , as part of the production expansion.