Higher gold output boost Caledonia Q3 profit 55pct to $1,7mln

Higher gold output boost Caledonia Q3 profit 55pct to $1,7mln

HARARE, November 12 (The Source) – Gold production at Caledonia Mining Corporation’s low cost operation Blanket Mine rose nearly 11 percent to 10,927 ounces in the three months to September 30, pushing net profit for the period to $1,7 million, the company said on Thursday.

The mine said it remains on track to reach its target production of 42,000oz for the year, with total output for the nine months to September at 31,288oz. After tax profit at $3,6 million was lower than the $5,4 million in the prior year.

The higher quarterly output was due to increased tonnes milled, offset by lower grades and metallurgical recovery while operating profit rose 55 percent on the $1,1 million achieved in the same period last year.

“The continued increase in production reflects the improved management control over grade and tonnage. The completion of the tramming loop in June 2015 has increased the underground haulage capacity and allows for an increase in development activity, which is expected to result in further increases in future production,” said chief executive, Steve Curtis in a statement.

He said the sinking of the no 6 Winze was completed in July while work on equipping the shaft is almost done, after which the horizontal development toward the ore bodies will commence. The start of initial production from the No. 6 Winze remains on target for January next year.

The Canadian junior miner, which owns 49 percent of the Gwanda operation, last November tabled a revised investment plan for the mine —  to spend $50 million in the period 2015-2017 and a further $20 million between 2018 and 2020 —  which seeks to increase annual output from 40,000 ounces to around 80,000oz by 2021.

“We are confident that the revised investment plan… will result in progressive increases in production from 2016 onwards when we expect to see the first production from below 750 meters – initially from the No. 6 Winze and subsequently from the Central shaft,” said Curtis.

Gold prices averaged $1,106 per ounce during the quarter compared to $1,252/oz last year. Costs were higher at $1,011/oz compared to $952/oz previously.

The company said it was debt-free with cash holdings of $23,7 million as of June 30 this year.