Blanket mine gold production rises 18pc

CALEDONIA Mining Corporation Plc’s gold production at its Blanket Mine rose 18 percent to reach a record 13 591 ounces in the quarter to December 2016 compared to the same period in 2015.

The increase in production was driven by improved infrastructure.

Total gold production for the year 2016 also reached a record high of about 50 351 ounces representing a 17 percent increase over the annual production in 2015 where 42 804 ounces were achieved.

The previous record production had been achieved in 2013 from underground operations where 45 530 ounces of gold were produced.

“The increase in production in 2016 was largely due to the start of production from below 750 meters, improvements in underground infrastructure and the commissioning of the new ball mill in line with the investment plan at Blanket,” said chief executive Mr Steve Curtis in a trading update.

“2016 was a significant year for Caledonia as the continued investment in Blanket begins to bear fruit,” he said.

Management is upbeat of improved earnings from an anticipated increase in production and sales.

Caledonia is targeting annual production of 60 000 ounces this year, 20 percent higher than 2015, and further improve to 80 000 ounces by 2021.

“We expect earnings to continue to benefit from the increased sales volumes and from lower average cost per ounce as fixed production costs and overheads are spread across higher production.

“This improvement makes us confident of achieving a significant improvement in earnings for 2017,” said Mr Curtis.

In line with the increased production in 2016, Caledonia declared a dividend of 1,375 cents a share. The company’s full year to December 31, 2016, financial results are expected in March this year.