Harare – Triple-listed Caledonia Mining has maintained its full-year production guidance for its 49 percent owned Blanket mine, in Zimbabwe, despite first-quarter production having been below target.
The Aim-, TSX- and NYSE American-listed company on Tuesday reported that the mine had produced 11 948 oz of gold in the first quarter, compared with the 12 924 oz produced in the first quarter of 2018.
"Production in the first quarter of 2019 was slightly below our target and below the comparable quarter in 2018, albeit at a level which allows us to maintain our 2019 production guidance of 53 000 oz to 56 000 oz for the full year.
"Continued difficulties with unstable electricity supply and grade dilution which we experienced in 2018 had an adverse effect on production, but improved drilling and blasting practices have been put in place in pursuit of improved grade control and I am pleased to say that efforts to minimise dilution are proving successful," said CEO Steve Curtis in a Q1 2019 production update.
He added that the company's technical team continued to work "tirelessly" to mitigate the effects of electricity supply interruptions, while continuing to work with the Zimbabwean electricity supply authorities to overcome the challenges. Caledonia is also investing funds to improve its resilience amid the supply interruptions.
Curtis also highlighted that the sinking of the central shaft at the mine was progressing according to plan and that it was "only months" away from completing the shaft sinking phase of the project.
Caledonia expects shaft equipping to start in the middle of this year.
"We look forward to commencing production from the central shaft from mid-2020, which is expected to deliver the company's growth plan to achieve 75 000 oz in 2021 and 80 000 oz by 2022," Curtis said.
Caledonia’s primary asset is a 49 per cent interest in an operating gold mine in Zimbabwe, Blanket. In November 2018, Caledonia announced that it had signed a legally binding agreement to increase its shareholding in Blanket to 64%, subject to the receipt of, amongst other things, regulatory approvals.
Caledonia’s shares are listed on the NYSE American (symbol: CMCL) and on the Toronto Stock Exchange (symbol: CAL) and depositary interests representing the shares are traded on London’s AIM (symbol: CMCL).
As at December 31, 2018, Caledonia had cash of approximately US$11.2 million. The Company plans for Blanket to increase gold production from 54,511 ounces in 2018 to approximately 75,000 ounces in 2021 and approximately 80,000 ounces by 2022.
Blanket’s target production for 2019 is 53,000 to 56,000 ounces. Caledonia expects to publish its results for the quarter to March 31, 2019 on or around May 14, 2019.
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