Caledonia targets 52 000 oz from Blanket in 2015
JOHANNESBURG (miningweekly.com) – Despite the lower and volatile gold price, TSX- and Aim-listed Caledonia Mining continued the development and exploration of its 49%-owned Zimbabwe-based Blanket mine, with production expected to increase to 48 000 oz of gold in 2014 and 52 000 oz in 2015.
The completion of the No 6 Winze project, which was intended to provide access to deeper resources below 750 m, would assist the gold producer in hiking output at the mine.
This came as Blanket reported a drop in first-quarter gold output to 10 241 oz, compared with the 10 472 oz achieved in the first quarter of 2013.
“New production areas have and are being developed and I am confident that the 2014 [and 2015] production targets … will be achieved,” said Caledonia president and CEO Stefan Hayden in a statement on Wednesday.
He stated that the operation’s first-quarter results confirmed its position as a low-cost producer, as Blanket's fixed cost base is spread across more production ounces.
"Underlying costs at Blanket remain stable. There have been no significant increases in electricity or consumable costs and the 2014 labour negotiations have recently been finalised at an across-the-board increase of about 5%. It is expected that Blanket's on-mine cash costs will decrease as production increases,” Hayden said.
The mine’s on-mine cash cost decreased marginally to $651/oz during the quarter under review, while gold sales increased, reaching 12 210 oz – up from the 11 964 oz sold in the corresponding quarter the year before – at a price of $1 288/oz.
Caledonia generated net cash of $6.2-million from operating activities during the first three months of 2014, compared with the reported $4.8-million in the preceding quarter and $2.2-million in the first quarter of 2013.
Profit for the period contracted to $4.1-million, from the reported $5.5-million in the three months to March 2013.
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