GROSS profit at the Victoria Falls Stock Exchange-listed Caledonia Mining Corporation more than doubled to US$13,8 million in the first quarter of this year due to higher gold revenue and lower production costs.
Last year in the same period, profit stood at US$5,8 million.
The mining giant produced 17 476 ounces of gold in the quarter under review, 8% up compared to the prior period. Blanket Mine, the group’s flagship operation, produced 17 050 ounces, while Bilboes oxide mine contributed 426 ounces.
“The first quarter of 2024 got off to a strong start with an increase in production and profit, supported by a favourable gold price. This has continued through April and into May,” Mark Learmonth, chief executive officer at Caledonia, said in a market update.
“We were highly encouraged by the results from the underground exploration programme which has yielded excellent results indicating that the Blanket, Eroica and AR South ore bodies have better than expected grades and widths at depth.
“The results of this drilling programme are being incorporated into a new technical report summary for Blanket Mine which we will announce shortly; it will show a meaningful increase in the life of the mine at Blanket.”
The Caledonia chief said work to refresh the existing study for the large-scale sulphide project at Bilboes was well-advanced, adding that management was considering various options for developing the asset with a view to optimising capital allocation and maximising the uplift in value for shareholders.
“I look forward to updating investors with these results in the next few weeks. Thereafter, the work on the selected development route will be upgraded to a feasibility study. This activity will take place in parallel with a process to secure debt finance for the project,” he said.
- Record breaker Mpofu revisits difficult upbringing
- Record breaker Mpofu revisits difficult upbringing
- Caledonia profits up 16% after record production
- Power crisis pushes Blanket Mine into fresh costs
Keep Reading
Gold revenue stood at US$38,5 million, while earnings before interest, taxes, depreciation and amortisation amounted to US$9,9 million.
On-mine cost per ounce of US$993 at Blanket in the quarter was virtually unchanged from the comparable quarter of US$991.
All-in sustaining cost (AISC) was US$1 296 per ounce. The AISC per ounce in the quarter decreased by 8,2% predominantly due to the lower production costs incurred at Bilboes and the non-recurrence of advisory costs for the Bilboes acquisition in 2023.
AISC included the benefit of the solar plant electricity saving of US$51 per ounce for the quarter.
Although lower than the first quarter of 2023, AISC is expected to be higher for the full year than in previous years due to the classification of certain items of ongoing capital expenditure on projects that are now treated as “sustaining” investment rather than “expansion” investment.
Net cash from operating activities amounted to US$4,9 million, compared to US$0,9 million realised in the same period last year. The higher operating profit increased the net cash from operating activities, partly offset by US$4,1 million of short-term working capital movements at the end of the quarter.
The group recorded net cash and cash equivalents of -US$14,2 million due to short-term working capital movements at the end of the quarter and US$3,6 million of foreign exchange losses.
Production guidance for Blanket is kept at 74 000 to 78 000 ounces of gold per year through December 31, 2024. On mine cost guidance is maintained at US$870 per oz to US$970 per oz, while AISC range is retained at 1 370 per oz to 1470 per oz.
