Posted on :Wednesday , 23rd March 2016
Caledonia Mining Corporation's annual gold production rose in 2015 despite work on a major upgrade at its 49 percent owned Zimbabwe mining unit, Blanket mine. Production at Blanket Mine for the year was 42 800 ounces against 41 800 ounces and all largely due to higher output in the fourth quarter of 11 510 ounces.Grades during the period were lower on average and this pushed up costs while revenues were also affected by the lower gold price though this has since recovered.
Weak gold price made 2015 a challenging year but the mine had generated cash and production was two percent higher than target.
Revenue for the year was $49 million compared to $53,5 million, while profits dropped to $8,5 million from $12,1 million.
Investment at Blanket Mine rose to almost $17 million in 2015 as part of the plan to increase annual output to 80 000 ounces per year by 2021.
"2015 was a challenging year due to lower gold price. Despite the tough environment, Blanket remained cash generative at the operating level. Production in 2015 was 2,5 percent higher than in 2014 and 2 percent higher than target, at 42 806 ounces.
"Investment at Blanket Mine increased to almost $17 million in 2015 from $6 million in 2014 due to implementation of the Revised Investment Plan, announced in November 2014," said Caledonia Mining Corporation chief executive Steve Curtis.
Mr Curtis said implementation of the Revised Investment plan is on track and within budget.
"In the middle of March 2016, production from below 750 metres commenced, as planned, via the Number 6 Winze. Production from below 750 metres is expected to increase in the remainder of 2016 and 2017 and will contribute to higher targeted production of approximately 50 000 ounces of gold in 2016 and approximately 65 000 ounces of gold in 2017.
"The focus on resource development at Blanket increased in 2015," said Mr Curtis.
He said there were two resource upgrades in the year as a result of which the total resource base remained broadly unchanged, notwithstanding record production in 2015 in terms of tonnes mined.
Following the upgrades, measured and indicated resources increased to 64 percent from 55 percent of the total resource base during the year.
Towards the end of the year, new drilling machines were installed and commissioned resulting in increased drilling rate of over 2 000 metres per month compared to the average achieved in 2015 of approximately 700 meters per month.
"In February 2016 Caledonia's shareholders approved, by an overwhelming majority, the proposal that Caledonia should migrate its tax and legal domicile from Canada to Jersey, Channel Islands.
"This migration will be effected today and reduce the tax burden on Caledonia and its shareholders, and reduce the costs of tax compliance.
"I expect that 2016 will be a transformational year for Caledonia as benefits of restructuring and investment become apparent and I look forward to updating the market accordingly," said Mr Curtis.
