NYSE-, Aim- and TSX-listed Caledonia Mining produced 13 978 oz gold from its Blanket mine, in Zimbabwe, during the quarter ended September 30.
This is 10% above the output achieved in the second quarter but 3% below that of the third quarter of 2017.
Gold produced for the nine months to September 30 was 39 559 oz, marginally behind the 39 710 oz produced in the corresponding period in 2017.
Caledonia expects improved production to continue into the fourth quarter; however, it has narrowed the range of its 2018 production guidance from between 55 000 oz and 59 000 oz to between 54 000 oz and 56 000 oz.
The company, nevertheless, remains on track to achieve its production target of 80 000 oz in 2021.
As a result of the adjusted 2018 production guidance and the recent weakness in the gold price – assuming the current spot gold price is maintained for the rest of this year and assuming no material change in the company's operating costs – Caledonia expects full-year 2018 adjusted earnings a share to be in the range of 140c to 150c apiece.
This is a reduction from the previous earnings guidance of 165c to 190c apiece, but is 3% to 12% higher than the earnings achieved in 2017.
“Grade during the quarter continued to be below expected levels and remains a key area of focus for the business. I am pleased with the progress that our technical teams have made with our focus on improved mining practices to minimise dilution and I have confidence that their efforts will continue to deliver results,” said Caledonia CEO Steve Curtis.
Caledonia remains confident in the underlying geological model for Blanket and that the longer-term potential of the orebody is robust. The company expects grades to return to budgeted levels in the fourth quarter of this year.
"The sinking of the central shaft continues according to plan and within budget; we look forward to starting production from the central shaft in 2020, which is expected to deliver the company's growth plan to achieve 80 000 oz/y by 2021"