Caledonia posts lower second-quarter profit

10th August 2023 By: Cameron Mackay - Creamer Media Senior Online Writer

Gold producer Caledonia Mining has reported a gross profit of $10.9-million for the second quarter ended June 30, a decrease from the $17.9-million reported for the second quarter of 2022.

“While the Zimbabwe-based Blanket gold mine contributed $13.1-million, the group's gross profit was affected by the costs of waste-stripping at the Bilboes oxide operation, notwithstanding a small revenue contribution of $2.2-million in the quarter.

“Bilboes will be returned to care and maintenance with effect from October 1, and, pending the completion of the feasibility study for the sulphide project, the remaining oxides will be mined as part of the larger project,” the miner says.

For the quarter ended June 30, 1 076 oz of gold were produced from the Bilboes oxide operation.

The Blanket mine, meanwhile, delivered 17 436 oz of gold, compared with the 20 091 oz produced in the second quarter of last year.

Overall, Caledonia’s production for the first half of this year reached 34 653 oz, compared with the 38 605 oz produced in the first half of last year.

After an encouraging start to the quarter, continued operational challenges at the Blanket mine resulted in production being below expectations in May and the first half of June.

These challenges have been addressed and production improved substantially in the second half of June and in July, with 7 829 oz of gold produced at Blanket in July at an on-mine cost of $715/oz.

Caledonia maintains its production guidance of between 75 000 oz and 80 000 oz, and its on-mine cost guidance of between $770/oz and $850/oz for the full year.

"Mining is never without its difficulties, and the first half of this year has certainly not been without its challenges. Blanket is now, however, running better than expected, and I look forward to achieving production guidance of between 75 000 oz and 80 000 oz of gold for this year,” comments CEO Mark Learmonth.