Caledonia Mining Record 20% increase on annual gol...

Caledonia Mining Record 20% increase on annual gold production at Blanket Mine hitting a new record

Zim Now Writer

Victoria Falls Stock Exchange listed Caledonia Mining has announced gold production of 80,775 ounces for the year 2022 marking a 19.7 per cent increase on the 67,476 ounces produced in 2021.

"In 2014, Caledonia announced a plan to sink a new shaft (Central Shaft) to 1,200 metres from surface, all funded through internal cash flow, with a long-term target of achieving an annual production rate of 80,000 ounces. I am delighted to announce today that we have now achieved this target, with 2022 annual production of 80,775 ounces - just over the top end of our guidance. This achievement is a huge milestone for the Company; it has been a tremendous team effort and I would like to thank all of our employees for their continued hard work,” said Caledonia CEO Mark Learmonth in a statement.

Production for Q4 2022 hit 21,049 ounces, a 13.1 per cent increase on the 18,604 ounces produced in Q4 2021.

Learmonth said that Caledonia expects a bright 2023 by maintaining the high production rates.

“Production guidance for 2023 assumes that Blanket will broadly maintain the production rate achieved in 2022. 2023 guidance also includes the estimated production from the small oxides project at Bilboes where mining activity is expected to commence in February, and we expect to extract gold from the heap leach process in March,” said Learmonth.

2023 Guidance

	Bilboes oxides	Blanket	Group consolidated
Gold production (oz)	12,500 –17,0001	75,000 – 80,0002	87,500 – 97,000
On-mine cost/oz ($)3	1,200 – 1,320	770 – 850	900 – 1,000
All-in sustaining cost/oz ($)4	N/A	N/A	1,150 – 1,250
Capital expenditure ($’m)5,6	0.5	28.3	30.9

The statement said capital expenditure at Blanket in 2023 includes approximately $9.6 million in respect of a new tailings facility (reflecting tightened regulatory requirements) and a further $9.8 million of deep-level capital development so that operations can be maintained in future years.

In addition the statement says in 2023, it is expected that approximately $2 million will be incurred in the preparation of a revised feasibility study for the larger sulphide project at Bilboes.

It is anticipated that the cost of the projected capital expenditure for the group will be met from operating cashflows and in-country borrowings.

Learmonth said that Caledonia has planned for hyperinflationary challenges so that operations remain profitable.

“Cost guidance at Blanket and Caledonia (i.e. excluding the costs of the Bilboes oxides project) 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.

“The on-mine cost of the small oxides project at Bilboes reflects 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 Blanket Mine will remain the flagship operation of Caledonia which recently announced its acquisition of Bilboes and also has Motapa and Maligreen in its portfolio.