COVID-19 derails Caledonia Mining’s capital projects, but on track to meet production targets

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Caledonia Mining Corporation's CFO, Mark Learmonth
  • Development of the Central shaft will secure mine life to 2034
  • Commissioning on track for Q1 2021
  • 67,000oz gold production target for 2021 and 80,000oz by 2022

HARARE – Caledonia Mining Corporation Plc (NYSE AMERICAN & AIM: CMCL), says the ongoing global coronavirus (COVID-19) has had an adverse effect on capital projects undertaken at its primary asset, Blanket Mine located in Zimbabwe.

The project involves the construction of a new mine below the current workings, with the development dating back to 2015. US$63 million has been invested in the process funded from internal cash flows.

In a recent corporate presentation, Caledonia’s CFO Mark Learmonth said due to COVID-19 and subsequent lockdown restrictions, the gold miner has seen slower progress on equipping the Central Shaft while restrictions on the cross border movement of specialised personnel and equipment resulted in a three-month delay.

Restrictions on the number of underground personnel resulted in slower underground development which is required to support future production, including production from the Central Shaft.

‘The shaft sinking was completed in the middle of 2019, and the shaft equipping was completed late last year,” Learmonth said adding that the company now forecasts commissioning of the mine in the current quarter (Q1 2021). Zimbabwe is currently in another national lockdown.

According to the company, the development of the Central Shaft will enable mining and exploration access below 750m, improve operational efficiency, and secure mine life to 2034.

Gold production during 2020 was 57,899 ounces with approximately 15,012 ounces produced during Q4 2020. Gold production for 2021 is expected to between 61,000 to 67,000 ounces.

Meanwhile, Caledonia maintains its annual gold production of 80,000 ounces by 2022.

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