Caledonia records decline in production
GOLD producer Caledonia Mining Corporation has recorded a production decline from both Blanket Mine and the Bilboes oxides project in Zimbabwe for the first quarter ended 31 March 2023.
Blanket Mine produced 16 036 ounces of gold, which was 13% lower than the 18 515 ounces produced in the same period last year. Bilboes produced 105 ounces of gold for the period under review, having started the production of gold from oxides derived from pre-stripping works in the last few days of the quarter.
The company blamed the poor performance on several insignificant mechanical breakdowns and logistical issues.
Commenting on the production, company chief executive officer Mark Learmonth said the low production at Blanket Mine in the first quarter of each year was a norm, although equipment failure also contributed to the low gold production of the quarter under review.
“Gold production at Blanket is usually lower in the first quarter of each year and increases in the following quarters. This trend is in evidence this year, albeit production in the first quarter of 2023 was below our target due to a series of issues including equipment failures and logistical issues,” he said.
In addition, the gold company said the commencement of oxide production at Bilboes was slowed due to the adverse effects of inconsistent grades, mechanical breakdowns and the poor availability of spare parts and alternative equipment.
“The oxide project was adversely affected by the breakdown of contractor-provided drill-rigs which are used for evaluation drilling and the limited availability in Zimbabwe of spare parts or alternative equipment,” said Learmonth.
According to the production guidance published in January this year, the on-mine cost/oz (ounce) of Bilboes oxide production was anticipated to be US$1 200 – US$1 320, hence relatively low margin activity was registered.
Learmonth said this was primarily justified by the benefit of pre-stripping in anticipation of the development of the Bilboes sulphide project.
“The small-scale low-margin oxide operation at Bilboes is effectively a pre-stripping exercise for the larger sulphide project in respect of which we have commenced work on an updated feasibility study,” said the chief executive.
He said the company was reviewing the preliminary evidence of this activity, given some of the initial challenges and relative to the larger sulphide project, for which a feasibility study was being updated.
Accordingly, the company said it would report the actual production achieved each quarter at the oxides project as part of the pre-stripping activities and has withdrawn guidance on the low-margin oxide production.
Meanwhile, Learmonth said the equipment and logistical issues were resolved, and production to date in April has been higher than expected.
In light of the foregoing, the company management reiterates production guidance for Blanket for the year to 31 December 2023 of between 75 000 and 80 000 ounces of gold.