Gold miner Caledonia Mining Corporation has lowered its gold production guidance for the Blanket mine, in Zimbabwe, to between 69 000 oz and 72 500 oz for the year to December 31, from its previous guidance of 72 000 oz to 76 500 oz, following lower-than-expected production in the third quarter.

The company highlights a decline in gold output to 17 030 oz in the three months ended September 30, compared with 19 106 oz in the corresponding period of 2025.

Gold production for the nine months to September 30, also decreased to 49 158 oz, from 58 846 oz a year earlier.

“Production in the third quarter was below our expectations, principally [owing] to insufficient compressed air capacity in deeper, higher-grade mining areas and the temporary retention of gold within the processing circuit.

“We expect production in the fourth quarter to benefit from improved access to higher-grade mining areas, the recovery from mid-October of about 1 100 oz of gold retained within the metallurgical plant and the processing at Lima of additional ore arising from the seven-day shift system,” says Caledonia Mining CEO Mark Learmonth.

The revised full-year guidance implies fourth-quarter production at the Blanket gold mine of about 19 800 oz to 23 300 oz and Caledonia expects output to benefit from increased compressed-air capacity following the commissioning of additional compressors, improved access to higher-grade mining areas and the processing of additional ore at the Lima satellite plant.

Caledonia also notes that production is expected to benefit from the recovery, from mid-October, of about 1 100 oz of gold temporarily retained in the metallurgical plant following the commissioning of a new elution vessel, as well as increased elution capacity and improved recovery performance.

The company has also raised its full-year on-mine cost guidance to between $1 700 and $1 900 for each ounce sold, from a previous range of $1 600 to $1 800, reflecting lower expected production volumes.

Its all-in sustaining cost guidance has increased to between $2 650 and $2 850 per ounce sold, compared with the previous forecast of $2 500 to $2 700 per ounce.

Moreover, Caledonia has reduced its group capital expenditure guidance for 2026 to $94.3-million, from $103.3-million, to align spending with expected cash flows. The reduction mainly reflects the deferral of components of the 132 kV power line project to 2027 and does not represent a material reduction in the overall scope of planned capital projects.

Revised expenditure comprises $44-million in sustaining capital at Blanket, $3.5-million in growth capital at Blanket, $43-million in growth capital at the Bilboes project and $3.8-million in exploration at the Motapa gold project, in Zimbabwe.

The company expects its ongoing operational improvement initiatives to support higher and more consistent production in 2027.

Caledonia’s management team believes that this revised guidance for the 2026 financial year will have no adverse effect on the company’s ability to use internal cash flows to contribute towards the funding of the Bilboes development project.

“Blanket remains a robust and cash-generative operation. We remain focused on delivering a stronger performance in the fourth quarter and implementing the operational improvements required to support production and cash generation in 2027,” Learmonth concludes.