Caledonia Mining reports record gold production at Blanket

Caledonia Mining Corporation announced record quarterly gold production from the Blanket Mine in Zimbabwe for the quarter ended 31 December on Monday, reporting that approximately 16,876 ounces of gold were produced during the period, exceeding the previous production record of 16,425 ounces set in the final quarter of 2017.

The AIM-traded firm said production was 24% higher than the previous quarter, and 13% higher than the corresponding final quarter of 2018.

Total gold production during 2019 was around 55,182 ounces, which was ahead of revised production guidance of between 50,000 and 53,000 ounces.

Caledonia also advised that gold production for 2020 was expected to be between 53,000 and 56,000 ounces.

“I am delighted to report a production record at Blanket of 16,867 ounces in the fourth quarter,” said chief executive officer Steve Curtis.

“An improvement in the electricity supply and vigilant focus on grade control and production tonnage have resulted in an excellent production result for the final quarter of which our entire operational staff can be justifiably proud.

“The impressive operational turnaround was achieved without any compromises on safety.”

Curtis said that was “a commendable achievement”, given the distractions posed by the challenging conditions experienced by its workers due to the economic environment in Zimbabwe.

“I am also pleased to see that we have not lost this momentum as we start 2020 with the mine continuing to perform very well into the new year.

“With the improved operational performance and the current buoyant gold prices leading to healthy operating margins we expect Caledonia to continue its track record of strong cash generation.”

Curtis added that the board expected 2020 to be “a landmark year” for the business, adding that it was looking forward to commissioning the Central Shaft later in 2020 which it anticipated would then deliver increased operating cash flows and reduced capital expenditure.

“In early January 2020 we announced a 9.1% increase in Caledonia's quarterly dividend; the anticipated improvement in free cash flow is expected to enable the board to review future dividend distributions as appropriate.”

At 1242 GMT, shares in Caledonia Mining Corporation were up 5.2% in London at 668p.