MINER, Caledonia Mining Corporation, is set to produce between 74 000 to 78 000 ounces of gold by year-end at its Blanket Mine, owing to increased production of the yellow metal.

Caledonia is a Zimbabwe-focused exploration, development and mining corporation which owns the gold-producing Blanket Mine, Bilboes Mine and the Motapa and Maligreen gold mining claims, all situated in Zimbabwe.

Blanket Mine is Caledonia’s main gold producer.

In its new second quarter report for the period ended June 30, 2024, Caledonia said 20 773 ounces of gold were produced from Blanket compared to 17 436 ounces recorded in the 2023 comparative.

“Publication of preliminary economic assessment for the gold sulphide project at Bilboes (the ‘Bilboes Sulphide Project’) on June 3, 2024, suggested a yield of approximately 1,5 million ounces of gold, over a 10-year life of mine, at an all-in sustaining cost of US$968 per ounce,” Caledonia said.

“On May 15, 2024, Caledonia announced updated mineral reserves and resources estimates, including a 106% increase in Blanket’s mineral reserves and a 63% increase in measured and indicated mineral resources pursuant to Canada’s National Instrument 43-101 and an increase in Blanket’s life of mine to 2034, based on the updated mineral reserves estimate.”

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Caledonia said that management believed that the inferred mineral resources may, based on past successful conversion rates, further extend the life of mine past 2040.

“Caledonia is on track to achieve production at Blanket within its pre-disclosed guidance range of 74 000 to 78 000 ounces for 2024,” Caledonia said.

“The group is progressing the new feasibility study on the Bilboes Sulphide Project, which is expected to be delivered during the first quarter of 2025. The company continues to progress exploration activities at Motapa.”

Gold has remained resilient in the face of declining global commodity prices on the back of increased geopolitical tensions in the Middle East and Europe.

Caledonia said gross revenue of US$50,1 million, compared to US$37 million in the second quarter of 2023, was achieved during the quarter under review.

This was attributed to higher gold production and a higher gold price, Caledonia said.

Gross profit of US$22,9 million was registered during the period under review, a 109,8% increase from US$10,9 million from the comparative 2023 quarter, driven by higher gold revenue and lower production costs.

The miner said earnings before interest, taxes, depreciation and amortisation, excluding depreciation and net foreign exchange gains and losses, of US$22,5 million was achieved in the quarter, up from US$9,6 million realised in the comparable quarter.

“Blanket Mine on-mine cost per ounce of US$906 (Q2 2023: US$915). Consolidated all-in sustaining cost decreased by 7,7% to US$1,253 per ounce (Q2 2023: US$1 357 per ounce), due to the lower on-mine cost per ounce offset by higher sustaining capital expenditure and increased administrative expenses,” Caledonia said.

“Group net cash inflow from operating activities of US$19,1 million in the quarter (Q2 2023: US$2,2 million outflow). Net cash and cash equivalents in the quarter increased by US$12,8 million to negative US$1,4 million.”

Caledonia chief executive officer Mark Learmonth said increased gold production, higher gold price and lower costs per ounce drove its second quarter performance.

“With today’s results, we remain on track to achieve our production and cost guidance for the year. I was delighted that the 2023 drilling campaign resulted in a significant increase to Blanket’s mineral resources and mineral reserves estimates as well as an increase in Blanket’s life of mine,” he said.

“A 10-year mine life, based on reserves, indicates the robustness of the orebodies at Blanket. Management anticipates that Blanket’s mine life should extend past 2040 given past successful conversion of inferred mineral resources.

“During the quarter, the board took the decision to proceed with the single-phase development option for the Bilboes Sulphide Project.”

He said Bilboes had the potential to almost triple Caledonia’s gold production to over 200 000 ounces per annum based on the preliminary economic assessment findings, in combination with production from Blanket.