HARARE - London-listed Caledonia Mining Corporation (Caledonia) says gold production at its Zimbabwe-based Blanket Mine (Blanket) declined by 7,2 percent to 10 607 ounces in the quarter ended March 31.
The gold producer — 49 percent-owned by Caledonia — produced 11 429 ounces in the 2013 fourth quarter. Caledonia said the output was hit by the lower grade achieved compared to targeted 3,83 grammes per tonne.
However, the group established other panels at the required grade and expects to maintain an average grade between 3,60 to 3,83 grammes per tonne of gold.
“Closer attention will be paid to grade control in future,” Caledonia said.
It also indicated that it would continue to invest in Blanket to boost production. The group has projected 48 000 ounces for 2014 and 52 000 ounces for 2015.
In the 12 months to December 31 2013, gold production stood at 45 527 ounces compared to 45 465 in 2012.
The average realised gold price for the year was $1 402 per ounce compared to $1 666 in 2012.
Sustaining costs for the year were $973 per ounce against $852 per ounce prior year.
Under recently introduced Zimbabwean rules, all gold must now be sold to State-controlled Fidelity Printers and Refiners.
Blanket has received all payments due from Fidelity in-full and on-time, the company highlighted.
Meanwhile, exploration at below 750 metres continues at Blanket and Caledonia says the results are encouraging so far.
The mine has surplus plant capacity and is sufficiently cash generative that, if the investment climate is acceptable, it could invest in projects with a view to further increasing production, the group has said.
Caledonia plans to pay a dividend of six Canadian cents per share in 2014, split into four equal quarterly payments of 1,5 Canadian cents.
The group’s chief executive and president Stefan Hayden said:
“Blanket’s on-mine cash cost increased in the fourth quarter compared to the previous quarter, however this was largely due to the higher work-in-progress at December 31, 2013.
“As a measure of Blanket’s continued cost efficiency, the cost per tonne processed in 2013 fell from $75,90 to $70,40.”
Hayden noted that in the early part of 2014, the achieved grade in certain production areas became uneconomic and production in those areas was terminated.
“Production in the first quarter of 2014 was also adversely affected by the unscheduled requirement to replace the winding ropes on the main production shaft,” he said.