Blanket mine records strong gold production recovery in April

"Shifting responsibility for making payments from RBZ to Fidelity for gold deliveries from Blanket has simplified and improved mechanism for receiving payments"

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Blanket Mine
  • 5,470 ounces produced in April
  • Full-year guidance maintained between 61,000 ounces and 67,000 ounces
  • Cash balance at April 30 of $16.3 million from $13 million at the end of Q1

HARARE – Zimbabwe-based Blanket Mine, primarily owned by Caledonia Mining Corporation saw a strong gold production recovery in April 2021, representing a positive turn in performance following a slump during the first three months (Q1) of the year.

In a post quarter-end highlights and outlook, Caledonia which is listed on the New York Stock exchange and the Australian Stock Exchange highlighted that 5,470 ounces were produced at the Blanket Mine in April which is above plan and 24 percent higher than the average monthly production in the quarter ended 31 March 2021.

Cumulative first-quarter production was 13,197 ounces which were 7 percent lower compared to 14,233 ounces in the same period last year. According to the Company, production was adversely affected by underground flooding and lower grades.

Steve Curtis, Caledonia’s Chief Executive Officer, commented: “The first quarter of 2021 raised several challenges which I am pleased to say have now rectified. The fall-of-ground at AR South has been resolved and this high-grade area is back in full production. The underground flooding which resulted in five lost production days was caused by exceptionally heavy rains; rainfall in the first quarter was more than two-and-a-half times higher than the average for the same period in previous years. In response, we increased our pumping capacity so that we can manage any repetition of this event in future. On the positive side, the heavy rain means that water supply, which has sometimes been a cause for concern, is assured for the foreseeable future.

“Gold production in April show a marked improvement and Blanket produced 5,470 ounces in April, which is better than planned. The strong recovery in performance has continued into May and we are confident that we will achieve our full-year guidance of between 61,000 and 67,000 ounces.

“Responsibility for making payments for gold deliveries from the Blanket Mine moved from the Reserve Bank of Zimbabwe to its gold refining subsidiary Fidelity Printers and Refiners Limited. This move has simplified and improved the mechanism for receiving payments for the gold Blanket produces, which in the early months of 2021 had been subject to delays. “Those issues have been fully resolved with full catch up of delayed payments and Caledonia is pleased to report that the new system is operating well. We have a strong, long-term working relationship with the Reserve Bank of Zimbabwe and Fidelity and are delighted that they have improved the payment process.”

As a result of the normalisation of working capital and helped by the higher production in April, the Company’s consolidated cash position improved from $13.0 million at the end of March to $16.3 million at the end of April.

Curtis added that Caledonia’s immediate strategic focus is to convert the commissioning of Central Shaft project into higher production, lower costs and increased cash generation.

“We will also finalise the exploration activities at Glen Hume and Connemara North while evaluating further investment opportunities in the gold and precious metals sector in Zimbabwe and in other jurisdictions, with our long-term vision of becoming a mid-tier, multi-asset gold producer,” he said.

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