• Caledonia has revised its production outlook for 2024 and full-year 2025 due to lower-than-expected gold production in the fourth quarter and full-year 2023
• The company's initial production guidance for 2024 was a range of 75,000 to 80,000 ounces, but it has now lowered it to 74,000 to 78,000 ounces
• Caledonia Mining faced challenges such as high costs related to the Bilboes mine, electricity expenses, maintenance of the Bilboes mine, and exploration expenses, which contributed to the decline in production

Harare- Caledonia Mining Corporation, the second-largest gold producer, has revised its production guidance for 2024 and full-year 2025 due to lower-than-expected gold production in the fourth quarter and full-year 2023. The company firstly targeted a range of 75k Oz to 80k 0Z when Bilboes went under maintenance.

However, for 2024, it has even lowered the guidance to 74k Oz and 78k Oz. The company produced 20,172 ounces in the fourth quarter, falling short of the 21,772 ounces produced in the third quarter. In total, Caledonia Mining produced 75,416 ounces of gold in 2023, significantly lower than the previous year's production of 80,775 ounces. This translates to 2,364 kilograms of gold in 2023, compared to 2,548 kilograms in 2022.

The decline in production might be due to several factors, including high costs related to the Bilboes mine and electricity expenses. Despite installing a 12-megawatt solar plant that fulfills 27% of its energy needs, Caledonia Mining faced electricity costs of up to US$5 million.

The maintenance of the Bilboes mine and expenses related to the exploration of the Motapa and Maligreen projects added to the company's costs. These challenges, along with high taxation and unreliable electricity supply, have narrowed the gap between Caledonia Mining and its main competitor, Padenga Holdings, which is anticipating a record gold production of 100,000 ounces.

However, Caledonia Mining has ambitious plans for the future. The company aims to become the largest gold producer in Zimbabwe by targeting an annual production of 250,000 ounces of gold, equivalent to 7,860 kilograms. To achieve this, Caledonia Mining plans to complete an updated feasibility study for the Bilboes sulphide project, determine the best implementation strategy, estimate funding requirements, and commence development.

To address electricity shortages and reduce costs, Caledonia Mining has phased out old machinery and is concentrating mining activities in areas accessible through the Central Shaft. By optimizing infrastructure and reducing power consumption, the company expects a decrease in electricity usage in 2024 and 2025.

Positive results have been announced from the deep-level drilling program at the Blanket mine, which is assessing the continuity of mineralized zones. The ongoing drilling efforts will contribute to a revised mineral resource statement expected to be released in the second quarter of 2024. These developments indicate that the lifespan of the Blanket mine is expected to increase, accompanied by improved gold grades.

Gold remains a crucial foreign currency earner for Zimbabwe, accounting for over 60% of foreign currency receipts and nearly 25% of exports. Amid global economic volatility and inflationary pressures, gold serves as a hedge asset, contributing to increased gold prices.

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