Gold miner Caledonia Mining has announced record gold production of 80 775 oz for the year ended December 31, 2022, at its Blanket mine in Zimbabwe, which exceeded the top end of the company’s guidance and achieved a long-standing production target.

In 2014, Caledonia announced a plan to sink a new shaft – Central shaft – to 1 200 m from surface, funded through internal cash flow, with a long-term target of achieving a yearly production rate of 80 000 oz.

“We have now achieved this target . . . This achievement is a huge milestone for the company,” Caledonia CEO Mark Learmonth said on January 13.

The 2022 production figures represent a 19.7% increase on the 67 476 oz produced in 2021.

Gold production at Blanket for the quarter ending December 31, 2022, amounted to 21 049 oz, a 13.1% increase on the 18 604 oz produced in the December 2021 quarter.

PRODUCTION FROM BILBOES OXIDES

The Bilboes oxides project – also in Zimbabwe – is a small-scale, two- to three-year project that entails the stripping of overburden to a depth of about 40 m to expose oxidised material. This material will be processed on site using an existing heap leach facility, which has been in operation for the majority of the past decade.

Ore production from the Bilboes oxides project is expected to start in mid-February. Caledonia said it expected to start recovering gold from the heap leach from March.

The project had an initial capital requirement of about $540 000, which was expended last year. Caledonia explained that the operational costs to remove the overburden and the oxide material would be expensed as they were incurred.

The company said the stripping of the overburden would have been required in due course to implement the larger sulphide project, meaning that these costs would have been incurred in any event.

CAPITAL EXPENDITURE

Capital expenditure (capex) at Blanket this year will include about $9.6-million for a new tailings facility, which the company said reflected tightened regulatory requirements.

A further $9.8-million of deep-level capital development will be expended so that operations can be maintained into future years.

The company expects that about $2-million will be incurred this year in the preparation of a revised feasibility study for the larger sulphide project at Bilboes. The cost of the projected capex for the group is expected to be met from operating cash flows and in-country borrowings.

GUIDANCE

Caledonia also provided guidance for the year to December 31, 2023, in respect of production, on-mine costs and capex at Blanket and Bilboes.

Learmonth said production guidance for this year assumed that Blanket would broadly maintain the production rate achieved in 2022. The 2023 guidance also includes the estimated production from the small oxides project at Bilboes.

“Cost guidance . . . is consistent with the costs we have historically incurred. We anticipate that the inflationary pressures currently being experienced by most mining companies will be offset by efficiencies resulting from the successful implementation of Central shaft. 

“At the consolidated level, the all-in sustaining cost per ounce is also expected to benefit from the lower cost of electricity due to the recently installed solar plant,” he explained.
 
He said that the on-mine cost of the small oxides project at Bilboes reflected the low grade of the oxide material. 

“The oxides project is not expected to be representative of the much larger sulphide project at Bilboes in terms of grade, production levels or cost profile. Nevertheless, the oxides project is expected to contribute to the group’s cash generation whilst at the same time allowing us to pre-strip to the deeper sulphide material,” Learmonth said. 
 
Over the last 18 months, Caledonia has built a portfolio of assets with the acquisitions of Bilboes, Motapa and Maligreen projects in Zimbabwe.

“Blanket will continue to serve as a solid foundation for this growth, as we look to progress our assets with our long-term goal of becoming a multi asset gold producer,” Learmonth said.