Gold exploration and mining company Caracal CEO Robbie McCrae has described the first quarter as a “trying time” for the company, which had to pull through “very difficult circumstances”, as the company continues to undergo a corporate governance review.

At the company’s Kilimapesa gold mine and processing operation in Kenya, both the openpit and processing plant were on care and maintenance for the first two months of the quarter and resumed normal production on March 5 and March 8, respectively.

Once operations resumed, 400 t of low-grade ore was mined at an average grade of 1.38 g/t. High-grade zones were identified and opened up in the 2A section, producing 11 645 t at an average grade of 3 98 g/t. Overall, a total of 2 946 t waste was mined.

The plant managed to process a total of 6 246 t at an average grade of 3.6 g/t through the carbon-in-leach (CIL) circuit and a further 12 858 t at an average grade of 1.25 g/t through the heap leach circuit to realise a total of 627 oz in gold sales.

Exploration work focussed on the near mine areas on the Kilimapesa Hill deposit.

Underground mining operations are not planned to reopen until funding is secured.

“The discovery and processing of the high-grade zone on the Kilimapesa Hill has assisted greatly in March and the gold price has also been kind to us during March – the production numbers for the quarter are down but when you consider the production only recommenced on March 5, we are well positioned for the quarter two period,” McCrae said.

He noted that the company had reached a settlement with Mill End Capital, with a draft prospectus lodged with the Financial Conduct Authority to begin the approval process.

“Activities to secure the expansion funding have progressed well during the period and we expect to announce financing in due course,” McCrae added.

On February 16, Caracal announced that it had drawn down $1-miillion from ORCA Capital through the issue of secured convertible loan notes. In addition, the company granted ORCA the option to subscribe for a further $4-million of loan notes.

Caracal has continued to progress financing arrangements for the Kilimapesa expansion project, where legal and technical due diligence processes are under way with the preferred funder.

Philoro Global Trading has confirmed its commitment to participate in the funding, which is dependent on the company securing the balance of financing required to fully fund the Kilimapesa expansion project.