• Caledonia Mining produced 17,360 ounces of gold an 18% increase from Q1, with average grades improving to 2.88 g/t and further rising to 3.05 g/t in July
• Half-year production of 32,127 ounces puts Caledonia at approximately 42–45% of its full-year 2026 guidance of 72,000–76,500 ounces
• While grade recovery is gaining traction, Caledonia still needs a 25% to 38% increase in production during H2 2026 to meet its annual target

Harare- Caledonia Mining Corporation has produced 17,360 ounces of gold at Blanket Mine during the second quarter ended 30 June 2026, an 18% improvement on the 14,767 ounces produced in Q1 2026, with the company reaffirming its full-year 2026 guidance of 72,000 to 76,500 ounces and confirming that operational measures to restore access to higher-grade mining areas are gaining traction.

The grade profile whose compression had constrained first-half output is now measurably recovering. Q2 2026 averaged 2.88 grams per tonne, above Q1's level and directionally consistent with the July 2026 grade to date of 3.05 grams per tonne that the company disclosed alongside the quarterly production figures.

Grade is the variable that determines everything downstream in a gold mining operation, since higher grade means more gold per tonne of ore milled, more ounces produced from the same milling throughput, and lower cost per ounce, and July's 3.05 grams per tonne represents a return toward the 3.07 grams per tonne FY2025 average and the 3.2 grams per tonne achieved in 2024 that sustained the record financial performance those years delivered.

Blanket's H1 2026 production of 32,127 ounces, derived from Q1's 14,767 ounces and Q2's 17,360 ounces, places the mine at approximately 42% to 45% of the full-year guidance range at the halfway point of the year. Meeting the 72,000-ounce floor of guidance requires H2 2026 to deliver approximately 39,873 ounces, and meeting the 76,500-ounce ceiling requires approximately 44,373 ounces in the second half.

Production is weighted toward the second half of the year as access to higher-grade mining areas improves, meaning H2's required output of approximately 40,000 to 44,000 ounces, above H1's 32,127 ounces by 25% to 37%, is the delivery trajectory the improving grade data is now supporting.

The lower Q2 performance against the comparable 2025 quarter, which benefited from exceptional grades and resulted in a record second quarter, reflects the planned mining sequence and constrained access to higher-grade areas during the first half rather than an operational deterioration, consistent with the communication the company has maintained since its January 2026 guidance publication.

Revenue surged 46% year-over-year to USD 267.7 million in FY2025, driven by higher realised gold prices and consistent operational delivery at Blanket, with profit after tax nearly tripling to USD 67.5 million, the group's balance sheet shifting from net debt to a USD 23.8 million net cash position, and net cash from operating activities rising 82% to USD 76.2 million.

Over the past decade, Caledonia has contributed USD 256.6 million to the Zimbabwean economy through royalties, taxes, dividends to the Gwanda Community Share Ownership Trust, and other payments, with 2025 contributions of USD 74.6 million representing nearly triple the USD 27 million contributed in 2024, the tripling being the consequence of gold price appreciation applied to a consistent production base. 77,392 ounces were sold in 2025 at an average realised price of USD 3,383 per ounce.

Zimbabwe's gold production reached a record 46.7 tonnes in 2025 with a national target of 50 tonnes in 2026. Total deliveries to Fidelity Gold Refinery in June 2026 climbed to 4,810 kilograms, up 21.7% month-on-month and 11.0% year-on-year, with first-half cumulative output of 21.4 tonnes positioning Zimbabwe firmly on course for its 50-tonne annual target.

Blanket's guided 72,000 to 76,500 ounces for 2026 converts to approximately 2.24 to 2.38 tonnes, placing Caledonia's flagship at approximately 4.5% to 4.8% of the 50-tonne national target. That modest volume share belies Blanket's disproportionate significance in Zimbabwe's formal large-scale mining sector, where its consistent production, published quarterly disclosure, international audit standards, and full fiscal compliance make it the benchmark against which other large-scale gold producers are measured.

The ASM sector, which now contributes approximately 75% of national gold production, delivered its strongest monthly performance in June 2026 of 3,580 kilograms, up 30.6% from May 2026, but large-scale mining's 25% volume share contributes a disproportionate share of formal tax revenue, foreign currency earnings, and the capital investment whose mine development expenditure sustains production beyond the current year.

Blanket's ongoing development of the twin decline system to access the 38 Level and the critical infrastructure across the 26, 30, and 34 Levels is the mine development investment that sustains production in years after 2026, an investment horizon whose absence in informal ASM operations is the structural vulnerability in Zimbabwe's gold sector that the Fidelity formalisation programme is addressing.

Equity Axis News