NYSE- and Aim-listed gold miner Caledonia Mining produced 13% less gold year-on-year from its flagship Blanket mine, in Zimbabwe, at 18 515 oz in the first quarter of the year as a result of several individually-insignificant mechanical breakdowns and logistical issues.
However, the miner reports that these issues have been resolved and production in the early part of April has been better than expected, with Caledonia reiterating its full-year guidance of between 75 000 oz and 80 000 oz of gold.
CEO Mark Learmonth says gold production at Blanket is usually lower in the first quarter of each year and increases in the proceeding quarters. “This trend is in evidence this year, albeit production in the first quarter of 2023 was below our target due to a series of issues including equipment failures and logistical issues.”
Caledonia’s Bilboes oxides project, also in Zimbabwe, started production of gold from oxides derived from pre-stripping works in the last few days of the period under review, realising 105 oz of gold.
The Bilboes project, which Caledonia acquired in January, has been subject to an historically limited amount of openpit mining.
The small-scale, low-margin oxide operation at Bilboes, he says, is effectively a pre-stripping exercise for the larger sulphide project to which Caledonia has started work on an updated feasibility study.
The miner notes that starting production of oxides at Bilboes has been slower than anticipated, having been adversely affected by inconsistent grades; mechanical breakdowns of contractor-provided drill rigs, which are used for evaluation drilling; and a limited availability in Zimbabwe of spare parts or alternative equipment, says Learmonth.
Caledonia notes that the on-mine cost of Bilboes oxide production is relatively low margin activity, anticipated to be between $1 200/oz and S1 320/oz.
Therefore, the miner says production from Bilboes is primarily justified by the parallel benefit of pre-stripping in anticipation of the development of the Bilboes sulphide project.