Gold miner Caledonia Mining recorded an “excellent” quarter and nine months to September 30, CEO Steve Curtis says, with record quarterly production of almost 18 965 oz, signifying the contribution that the Central Shaft at the Blanket gold mine, in Zimbabwe, is already making.

“The commissioning and subsequent ramp-up of activity at Central Shaft met our best expectations and we have, therefore, been able to narrow our production guidance to the top end of our previous range. We remain on track to hit our 80 000 oz target from 2022 onwards,” he notes.

Caledonia produced 48 872 oz for the nine months, a 14% increase on the 42 887 oz produced in the first nine months of 2020.

For the quarter, Caledonia recorded gross revenues of $33.5-million, a 31.9% increase on the $25.4-million achieved in the third quarter of 2020.

Its gross profit was $15.7-million, a 25.6% increase on the $12.5-million profit in the third quarter of 2020, owing to higher production and lower cost per ounce offset in the quarter by a lower gold price.

Earnings before interest, taxes, depreciation and amortisation was $15.1-million, a 30% increase on the $11.7-million in quarter three 2020.

Adjusted earnings a share increased by 102% from $0.34 and in quarter three 2020 to $0.69.

Net cash from operating activities was $7.1-million owing to higher operating profit offset by higher working capital.

Caledonia had net cash and cash equivalents of $13-million.

In October, the company declared and paid a quarterly dividend $0.14, the seventh increase in the quarterly dividend since October 2019.

OUTLOOK

Production guidance for the year to December 31 has been narrowed at the top end of previous guidance to 65 000 oz to 67 000 oz.

Owing to, besides others, historic delays in the completion of the Central Shaft arising from Covid-19, the need to remediate the poor electricity supply from the Zimbabwe Electricity Supply Authority and an upgrade to the workers’ village to accommodate a larger workforce, capital expenditure at Blanket for 2022 is now expected to be $27-million.

Caledonia has completed the purchase of the mining claims at Maligreen in the Zimbabwe midlands.

The company continues to evaluate Connemara North, in respect of which it has an option to purchase.

It will consider further investment opportunities in Zimbabwe and elsewhere.