⚫️Output grows by 19% year on year
⚫️Growth attributed to focus on development and operational improvements
⚫️Global gold prices currently at multi year high
London Stock Exchange listed, Caledonia Mining corporation, which is parent to Blanket Mine has reported that the mine’s gold production output for the first 3 months of 2020 (Q1) swelled by 19% to 14233 ounces when compared to same period last year.
Blanket mine, located in Gwanda, is Zimbabwe’s largest single gold mine by output and thus contributes the most to large scale produce per annum. Zimbabwe produced about 29 tonnes of gold in 2019, with large scale mining produce contributing circa 35% of the total.
Erratic power, unusually heavy rains at the beginning of 2019 and currency issues weighed on aggregate gold production in Zimbabwe.
Last week Caledonia said it will seek exemption from the government of Zimbabwe to continue producing under lockdown. The company said the waiver was almost certain to be granted.
The lockdown is a potential performance dampener given that it may curtail production on the very short end. Most mining entities have however already been exempted from the 21 day Coronavirus necessitated lockdown.
Australia Stock Exchange listed and Zimbabwe’s biggest mining corporation, Zimplats announced that government has granted its mines a special waiver to maintain production under lockdown, adding that it has put in place measures to ensure worker safety through social distancing among other mitigatory measures.
Zimplats earns about US$700 million in sales revenue annually from sales of PGMs. It’s SA parent has however put the plant and refinery in care and maintenance following a nationwide lockdown order only exempting essential services.
Last week Rand Refinery, a South African company involved in gold refining and trading said it is facing challenges in transportation of gold to London where it is typically onward sold on the LME. The challenges are attributed to supply chain disruptions emanating from transportation limitations given the Coronavirus outbreak.
Zimbabwe sells its gold to LME through Rand Refinery and is therefore likely to be impacted by the move. Gold is considered a safe haven asset and its demand swells when uncertainty is high. Early this week the price of gold breached the $1700/ ounce mark which is a multi-year high.
EQUITY AXIS NEWS