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Zimbabwe: Mining giant on track to surpass set gold target

The Victoria Falls Stock Exchange (VFEX)-listed gold mining company Caledonia Mining Corporation is on course to surpass its 80 000 ounces of gold production target for this year after producing 38 605 ounces in the first six months, 29 per cent higher than the 29 907 ounces produced in the first half of 2021.
In the quarter ended June 30, the mining firm produced 20 091 ounces of gold, representing a 20 per cent higher margin than the 16 710 ounces produced in the corresponding quarter last year.

The company, which aims to become a multi-asset gold producer, has set a target production of between 73 000 and 80 000 ounces of gold this year.
From the production trends in the first six months, the target looks set to be surpassed. In its financial results for the quarter and six months ended June 30, chief executive officer, Mr Mark Learmonth, said the first six months production levels exceeded expectations.

“This has been a terrific quarter and, indeed, half year with second quarter production of just over 20 000 ounces which set a record for any quarter.
“The first half of 2022 exceeded our expectations and we have now achieved our quarterly production target. Excellent production, along with a higher gold price and good cost control, has contributed to a 321 per cent increase in IFRS earnings per share and a 31 per cent increase in net cash from operating activities over the comparable quarter in 2021,” he said.
In July, Caledonia announced it had signed a US$53.2 million agreement to buy Bilboes Gold Limited as part of its expansion drive.

Bilboes Gold is a gold mining entity that owns three major gold mines in Matabeleland North, 75km north of Bulawayo and was once ranked among the country’s 10 biggest gold producers.
Mr Learmonth said they have been tracking the progress of the project for several years and believe that Bilboes is the premier gold development project in Zimbabwe and one of the best gold development projects in Africa.


“The completion of the transaction is subject to several conditions, but once achieved we can prepare a feasibility study to identify the most judicious way to commercialise the project with regard to the availability of funding on acceptable terms.

“Caledonia also intends to re-start the oxides operation at Bilboes under a tribute arrangement before completion of the transaction with a view to creating a cash-generative operation within approximately six months.
“Our immediate strategic focus continues to be on Blanket and we are on track to meet our target production of between 73-80 000 ounces of gold for this year, with first-half production of 38 605 ounces of gold. We will also continue to reduce our operating costs and increase the flexibility to undertake further development and exploration,
thereby safeguarding and enhancing Blanket’s long-term future.”

He said the proposed acquisition of Bilboes also builds on the recent acquisition of the Maligreen claims and the mining firm will continue to evaluate the existing geological information and is focused on increasing the confidence of the resource base.
Caledonia will also consider other investment opportunities in the Zimbabwe gold sector within the constraints of its financing and management capacity.

Going forward, the mining firm plans to increase production at Blanket Mine to the target of 80 000 ounces of gold per annum, reduce operating costs and increase the flexibility to undertake further development and exploration, thereby safeguarding and enhancing Blanket’s long-term future.

It also plans to commission the 12MW solar plant, which is expected to provide 27 per cent of Blanket’s total electricity demand.
In 2020, Caledonia announced that the solar project was part of efforts to address electricity constraints that have over the years affected the mining industry.
The project is in line with the Government’s strategy to boost power production. The mining sector is critical in generating foreign currency, contributing about 70 per cent of the forex earnings, largely driven by gold, platinum and diamond.

On financial performance in the period under review, the firm posted gross revenues of $36.99 million, a 23.4 per cent increase from the $29.98 million achieved in the second quarter of 2021.
A gross profit of $17.9 million translates to a 28.8 per cent increase from the $13.9 million in the corresponding period last year as achieved.
The giant mining concern says it will focus on becoming a multi-asset gold producer and continue to evaluate investment opportunities in the country, a development seen as a major boost to the country’s investment climate and policies. – @nqobilebhebhe.

Source: The Chronicle

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