- Production rose to 21 120 ounces, a new quarterly gold production
- The Group purchased Bilboes Gold Limited
- Profit for the period grew to US$410 million from US$8 million.
Harare- Mining outfit, Caledonia Mining Corporation Private Limited has posted a record gold production of 21,120 ounces during the third quarter ended 30 September 2022 signalling an 11.4% uptick from 18,965 ounces produced in the same period in 2021. This was a new quarterly production record for the Company which seeks to become a multi-asset gold producer in Zimbabwe and hit a new gold production record by year-end.
During the nine months to November 2022, 59 726 ounces were produced, 22.2% higher than the 48,872 ounces produced in the first nine months of 2021.
In both the first and second quarters of 2022, the Company exceeded its production targets of 20 000 ounces and is further optimistic to achieve the set annual production target of between 73,000 and 80,000 gold ounces.
The bullish gold production during the quarter and optimism on outlook comes at a time the Company is expanding its thrust in Zimbabwe through acquisitions.
In July 2022 Caledonia signed an agreement to purchase Bilboes Gold Limited, which is the holding company for a large, high-grade, open-pitable gold resource which it intends to prepare a feasibility study for, to identify the most judicious way to commercialise it with regards to the availability of funding on acceptable terms.
“Caledonia also intends to re-start the oxides operation at Bilboes, under a tribute arrangement before completion of the transaction, with a view to creating a cash-generative operation within approximately six months of the commencement of activity,” the Company said in a trading update.
The Project has NI43-101 compliant measured and indicated mineral resources of 2.56 million ounces of gold at a grade of 2.26 g/t and inferred mineral resources of 576,672 ounces of gold at a grade of 1.89 g/t1, including proven and probable mineral reserves of 1.96 million ounces of gold at a grade of 2.29 g/t.
“The feasibility study which has been prepared by the vendors indicates the potential for an open pit gold mine producing an average of 168,000 ounces per year over a 10-year life of mine.”
The Company which has gained certain approvals from the Reserve Bank of Zimbabwe to complete the transaction says it continue to engage with the Competition and Tariff Commission, the Ministry of Finance, the Ministry of Energy and Fidelity Printers and Refiners (Private) Limited regarding further outstanding approvals.
“Caledonia will prepare a feasibility study to identify the most judicious way to commercialise the Project (with regard to the availability of funding on acceptable terms,” the Company added.
The proposed acquisition of Bilboes builds on the acquisition of the Maligreen claims in November 2021 for a consideration of US$4 million while estimated to contain a NI 43-101 compliant inferred mineral resource of approximately 940,000 ounces of gold.
The Company also acquired the Motapa gold exploration in Zimbabwe, a mining lease covering approximately 2,200 hectares which is contiguous to the Bilboes gold project. Motapa was formerly owned and explored by Anglo American Zimbabwe prior to its exit from the Zimbabwean gold sector in the late 1990s.
Meanwhile, production at Blanket Mine is expected to hit the target of 80,000 ounces of gold per year, reduce operating costs and increase the flexibility to undertake further development and exploration, thereby safeguarding and enhancing Blanket's long-term future.
The Company’s production costs soared to US$415.8 million from US$413.7 million due to increased use of diesel generators as the grid supply continued deteriorating.
“However, we are now within a few weeks of seeing the benefit of the new solar plant which is currently being commissioned and, this, along with other initiatives to reduce our diesel consumption, should curb the inflationary pressure on our costs,” the Group said.
The Company expects to commission a 12MWac solar plant, which is expected to provide 27% of Blanket's total electricity demand.
On the financial front, revenue increased to US$35.8 million during the third quarter to September from US$33.5 million recorded in the prior year while operating profit shoot to US$14 million from 12.8 recorded in 2021.
As a result, profit for the period grew to US410 million from US$8 million.
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