Caledonia Mining (CMCL LN) 450p mkt cap �47.7m – Blanket Mine meets 2018 production guidance target • Caledonia Resources reports that, following a 7% increase in gold production during Q4 to 14952oz, its Blanket mine in Zimbabwe produced approximately 54,512oz of gold during 2018 and achieved its previously reported guidance of 54-56,000oz. • The company is guiding 2019 production in the range 53-56,000oz and confirms that it remains on track “to achieve production of approximately 80,000 ounces of gold per annum from 2021 following completion of the Central Shaft”. • The Central Shaft provides access to deeper level ore at Blanket below the 750m level and is currently reported to have reached a depth of 1150m and targeted for a final depth of 1204m. The company reports that “It is anticipated that shaft sinking will be completed towards the middle of 2019 after which the shaft will be equipped and commissioned”. • Commenting on the significance of the shaft sinking programme, Chief Executive, Steve Curtis, said “Completion of the Central Shaft is the key to Blanket achieving its planned production of approximately 80,000 ounces of gold per annum from 2021 onwards. I expect that sinking work at Central Shaft will be completed by mid-year after which we will start to equip the shaft.” • Mr. Curtis went on to explain that “This part of the Central Shaft project is relatively capital intensive. In light of our significant capital expenditure commitments, we believe it is prudent to take advantage of the recent strengthening of the gold price and we have therefore secured a minimum received gold price of $1,250 per ounce for the 5 months to June 2019 whilst maintaining full upside exposure to the gold price through a cost-effective option structure”. • He also pointed out that with the shaft-sinking programme now “in the final 18 months of construction; we expect capital investment on this project to be lower in the second half of 2019 and to reduce further in 2020 as it nears completion”. Conclusion: Caledonia Mining’s production from the Blanket mine met guidance during 2018 and the company confirms that, with the key development of the new Central Shaft now at around 95% of its targeted depth, the Blanket mine remains on course to deliver around 80,000oz of gold pa from 2021.
Login or register to post comments