Blan­ket Mine Q3 gold out­put up 23pc

Chronicle (Zimbabwe) - - Business Chronicle - Busi­ness Re­porter

CALE­DO­NIA Min­ing says its gold pro­duc­tion clocked 13 428 ounces dur­ing the third quar­ter ended Septem­ber 30, 2016 from 10 927 ounces in the prior pe­riod.

This marks a 23 per­cent in­crease in pro­duc­tion year on year.

The firm has in­ter­ests across South­ern Africa and owns a 49 per­cent stake at Blan­ket Mine near Gwanda in Mata­bele­land South.

“Gold pro­duc­tion in the quar­ter was 13 428 ounces, 23 per­cent higher year on year and seven per cent higher than the pre­vi­ous quar­ter due to the in­creased tonnes mined and milled and de­spite marginally lower planned grade when com­pared to the se­cond quar­ter,” Mr Steve Cur­tis, Cale­do­nia’s chief ex­ec­u­tive of­fi­cer, said.

“We ex­pect that the lower grade is a tem­po­rary re­duc­tion and that mined grade will con­tinue to trend up­wards to­wards four grammes per tonne as pro­duc­tion from higher grade, deeper ore bod­ies in­creases.”

Cale­do­nia said it ex­pects to see fur­ther re­duc­tions in the av­er­age cost of pro­duc­tion, as out­put ramps up, with the com­pany tar­get­ing an AISC (all-in sus­tain­ing costs) of in the range of $810 and $850. Gold was sold at an av­er­age price of $1 312 an ounce, com­pared to $1 106 an ounce in the third quar­ter of last year.

Profit be­fore tax rose to $4,11 mil­lion from $2,24 mil­lion the prior year, how­ever, the tax bill shot up to $2,29 mil­lion from £703 000.

The strong per­for­mance by Blan­ket Mine has al­lowed for a string of div­i­dend pay­ments to come through from the com­pany, dat­ing back to be­fore the most re­cent strength in the gold price.

In July, Cale­do­nia an­nounced that the quar­terly pay­out would rise from one and an eighth US cents per share to one and three-eighth cents.

The firm said the in­crease has been main­tained in the most re­cent quar­terly pay­outs, which were de­clared at the mar­ket on Oc­to­ber 4 and are due to be paid at the end of this month.

Cale­do­nia also says the un­der­ly­ing op­er­at­ing and fi­nan­cial per­for­mance of Blan­ket Mine re­mains very strong, and is on an up­ward tra­jec­tory.

In­creased pro­duc­tiv­ity at Blan­ket Mine in the third quar­ter was a re­sult of higher-grade ma­te­ri­als mined be­low 750 me­tres, ac­cessed through the No. 6 Winze, or con­nec­tion, and an ad­di­tional de­cline devel­op­ment.

It also said the de­liv­ery of in­creased ounces at a lower unit cost, into a stronger gold price, has re­sulted in ad­justed earn­ings per share for the third quar­ter that are 59 per­cent higher than quar­ter three of 2015.

The min­ing cor­po­ra­tion said it re­mains on track to meet pro­duc­tion guid­ance for this year of 50 000oz and con­tin­ues to progress to­wards its long term tar­get of 80 000oz by 2021.

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