Caledonia 2019 gold production up

14 Jan, 2020 - 00:01 0 Views
Caledonia 2019 gold production up

The Chronicle

Ndakaziva Majaka

AIM-quoted miner, Caledonia Mining Corporation (Caledonia), says its total gold production during 2019 was approximately 55 182 ounces, ahead of revised production guidance of 53 000 ounces driven by improved power availability and grade control.

Caledonia chief executive Steve Curtis said for the quarter ended December 31, 2019, approximately 16 876 ounces of gold were produced — 24 percent higher than the previous quarter — exceeding a prior production record of 16 425 ounces set in the final quarter of 2017.

“An improvement in the electricity supply and vigilant focus on grade control and production tonnage have resulted in an excellent production result for the final quarter,” he said in an update of the miner’s performance for the quarter to December 31, 2019.

In 2020, Caledonia anticipates gold production to be between 53 000 and 56 000 ounces.

This comes as the mining firm increased its third quarter dividend by 9,1 percent to 6,875 cents per share on the back of improved financial performance, buoyed by higher production and better gold prices.

According to Curtis, the firm – which recently completed a five-year investment programme at its Blanket Mine (Blanket) in Gwanda – now has more financial flexibility and its rate of capital expenditure is going to be reduced to give flexibility of cash reserves on an increased                                                                                                                    dividend.

Caledonia has been in an intensive capital expenditure drive with its latest investment being a US$44 million Central Shaft to be commissioned in fourth quarter of 2020.

The Central Shaft – at a depth of 1 208 metres at shaft bottom – is the largest investment in a series of investments at the Zimbabwe-based mine in a bid to increase production, improve operating efficiency and extend the life of the 113-year old mine even further.

“We expect the Central Shaft to be commissioned in the fourth quarter of 2020; thereafter we look forward to further increases in operating cash flow as production increases to the target rate of 80 000 ounces of gold per annum from 2022, as capital expenditure falls further and we begin to realise the operational efficiencies arising from the new shaft,” Curtis said recently.

Caledonia’s boss pointed out that the board was going to continue reviewing future dividends as appropriate, as it seeks to strike a balance between shareholder returns, the pursuit of new growth opportunities and prudent financial management.

The miner has been spending an average of US$21 million per annum investing heavily in capital goods for efficiency.

Meanwhile, Caledonia – which experienced production disruptions in the second and third quarters – is now in the advanced stages of evaluating a project to install solar photovoltaic generating capacity at Blanket to further reduce dependence on the electricity grid, reduce operating costs and ensure a more environmentally sustainable electricity supply.

“Advanced engineering work is underway and Caledonia is in the process of applying for the relevant regulatory approvals and will shortly embark on a tender process from interested parties to build and operate the project. Caledonia expects to fund the project itself but the tender process will also invite proposals from potential funders who may be able to offer a more cost effective funding structure,” Curtis said.

In the future, Caledonia anticipates that Blanket will have a blended electricity supply from grid, solar and back-up diesel generators which will deliver greater levels of operational reliability, lower operating costs and improved environmental sustainability.

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