Caledonia completes acquisition of gold rich Maligreen

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  • Maligreen has an estimated inferred resource of 940,000 ounces of gold
  • Quarterly gold production hit a record high of 25%
  • Revenue grew by 32%
  • 2022 capital expenditure estimated to US$27m

Harare – Caledonia Mining Corporation, the parent company for Blanket mine has completed the purchase of the mining claims at Maligreen which is located in Gweru mining district, the Company said in a trading update for the third quarter ended 30 September 2021.

The purchase was completed after the end of the third quarter at a cost of US$4 million.

Maligreen has a total land area of approximately 550 hectares comprising two historic open pit mining operations which produced approximately 20 000 ounces of gold mined from oxides between 2000 and 2002 after which the operation was closed and this will add to Blanket Mine.

It has also an estimated inferred resource of 940,000 ounces of gold in 15.6 million tonnes at a grade of 1.88 grammes per tonne3 and the Company continues to explore its possible investment opportunities in Connemara North which is situated in Gweru as well.

Meanwhile, the Company’s gold production set a quarterly record of 25% to 18 965 ounces in Q3’2021 from 15 155 ounces during the same quarter in 2020. This is a new quarterly production for Blanket Mine.

The 25% growth was owed to increased production contributed by the Central Shaft which was commissioned in March 2021.

Cumulatively, gold production was up by 14% to 48 872 ounces during the nine months under review from 42 887 ounces in 2020.

The on-mine cost per ounce decreased by 8% from US$758 in Q3 2020 to US$695 due to higher production which spread fixed costs over more production ounces while the all-in sustaining cost per ounce decreased 19% from US$1,119 in Q3 2020 to US$909 during the period under review.

“This reflects the decrease in on-mine cost per ounce and reduced sustaining capex,” the Company said in a statement accompanying the trading update.

As a result, revenue for the quarter grew by 32% to US$33.5 million from US$25.4 million recorded in 2020’s Q3 due to a 42% increase in the quantity of gold produced and sold offset by a 7% decrease in the average realised gold price.

Net cash from operating activities increased to US$7.1 million from US$5.3 in 2020 due to high gross profit offset by increased working capital.

Going forward, the Company has narrowed its production guidance by 3% at the top end of previous guidance at 65,000 to 67,000 ounces.

Capital expenditure for 2022 is expected to hit US$27 million due to delays in the completion of the Central Shaft arising from COVID-19, the need to remediate the poor electricity supply from the Zimbabwe Electricity Supply Authority, and an upgrade to the workers’ village to accommodate a larger workforce.

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