HARARE – Toronto-listed Caledonia Mining Company (Caledonia) says its Zimbabwe-based Blanket Mine (Blanket) produced 12 042 ounces of gold in the quarter to September 2013, surpassing a target of 11 000 ounces.
The group said the local unit produced 34 102 ounces in the nine months to September, up from 33 642 ounces recorded in prior comparable period.
Blanket — 49 percent owned by Caledonia — is among Zimbabwe’s top 10 gold producers.
Its chairman, Nicholas Ncube, said the miner is on course to produce approximately 44 000 ounces in 2013.
“Gold production in the quarter increased from the previous quarter due to the higher realised grade of 4,03g/t compared with 3,82g/t in the preceding quarter and improved gold recovery of 93,6 percent compared to 93,2 percent in the preceding quarter,” he said, adding that the adverse effect of the lower gold price on profitability was mitigated by lower costs.
“Blanket’s on-mine cost per ounce, all-in sustaining cost per ounce and all-in cost per ounce were all lower in Q3 2013 than in the preceding quarter and in 2012. Blanket retains its position as one of the lowest cost gold producers in Africa,” he said.
Sales during the quarter amounted to approximately $16 million were 12 042 ounces sold at an average sales price of $1,330 per ounce of gold.
Ncube noted that the period under review presented continued challenges due to the prevailing lower gold price.
“In response to the lower gold price, Blanket introduced measures to increase mine production from approximately 1 030 tonnes per day (tpd) in Q1 2013, to approximately 1 075 tpd in the second quarter and to 1,110 tpd in the third quarter,” he said.
Ncube said the gold producer remains an incredibly robust business, particularly in the current environment.
Early this year Caledonia said it would invest about $37 million in Blanket between 2013 and 2017 and planned to increase output at the mine by 90 percent to 76 000 ounces per year of gold by 2016, up from the 44 000 ounces targeted for 2013.
During the quarter Blanket invested $2,6 million compared to $1,1 million injected during same period last year in capital assets and work on its mineral properties.
“All investments at Blanket is funded from the company’s internal cash flows,” Ncube said.
He added that in the period under review, Blanket made payments to the community and payments to the government in respect of direct and indirect taxes, royalties, licence fees, levies and other payments totalling $3,7 million compared to $6,7 million in the preceding quarter and $8,5 million in the comparable quarter.
“As a low-cost producer with a robust balance sheet, Blanket is well-positioned to continue to implement its growth strategy, notwithstanding the current volatility in the gold price,” pointed out Ncube.