CALEDONIA Mining Corporation says gold production at its Zimbabwean unit increased by 15% to 67 476 ounces during the financial year ended 31 December 2021, a new record for annual output.
In the corresponding period in 2020, gold production stood at 57 899 ounces.
Caledonia operates Gwanda-based gold producer Blanket Mine, its flagship operation.
According to its operating and financial results for the year ended 31 December 2021, Caledonia said gross revenue rose by 21% to US$121 million while gross profit stood at US$54.1 million, 16% up compared to the same period in 2020.
Earnings before interest, taxes, depreciation, and amortisation in the period under review rose slightly from US$45.4 million to US$46.4 million.
Commenting on the results, Caledonia chief executive officer Steve Curtis said the gold production of 67 476 ounces was above the top end of the guidance range and was a new record for annual output.
Curtis said the robust operating performance was supported by good cost control; hence the increase in gross profit for the year.
Cash generated from operations before working capital increased by 17% from US$42.4 million to US$49.6 million.
“Now that the Central Shaft is commissioned, we expect further increases in production: guidance for 2022 is a range of 73 000 to 80 000 ounces while from 2023 onwards it is 80 000 ounces – 38% higher than in 2020,” Curtis said.
“To improve the quality and security of Blanket’s electricity supply, minimise our environmental footprint and help create a more sustainable future for our business, Caledonia is constructing the first phase of a 12 MWac solar plant that will provide approximately 27% of the average daily electricity demand at Blanket Mine.”
This project, expected to yield a modest return to shareholders, is expected to be completed in mid-2022.
The Caledonia boss said their immediate strategic focus is to complete the remaining underground development associated with the Central Shaft project, which is expected to increase production, reduce operating costs and increase the flexibility to undertake further exploration and development at depth, thereby safeguarding and enhancing Blanket’s long-term future.
“We also believe there is excellent exploration potential in the older shallower areas of the mine and in brownfield sites immediately adjacent to the existing Blanket footprint.”
During the year under review, Curtis said they acquired the mining claims at Maligreen in the Midlands which is estimated to host a mineral resource of approximately 940 000 ounces of gold in 15.6 million tonnes.
He said their immediate focus on this asset is to improve the confidence level of the existing resource base and they are currently re-assaying historic drill cores.
“Thereafter, we expect to prepare a feasibility study to commercialise the existing resource before we engage in further exploration on the claims area along strike, at depth and at a previously unexplored zone in the claims area,” he said.
“Our approach to new projects is highly disciplined: after further evaluation, the company has decided not to exercise the options to acquire the Connemara North property as it does not meet our investment criteria.”
During the year, Caledonia said the company also divested non-core assets in the vicinity of Blanket.
“Caledonia continues to evaluate further investment opportunities in the Zimbabwe gold sector with a view to transforming the company into a mid-tier, multi-asset Zimbabwe-focussed gold producer,” he said.