Gold producer, Caledonia Mining Corporation Plc anticipates output to continue on a growth trajectory this year with the commencement of mining activity in February at the small oxides project at Bilboes expected to extract gold from the heap leach process in March.
The Bilboes oxides project is a small-scale, two-to-three-year project which entails the stripping of overburden to a depth of approximately 40 meters to expose the oxidized material which will be processed on-site using an existing heap leach facility which has been in operation for the majority of the past decade.
The group managed to realize a record gold production in 2022 of 80,775 ounces which exceeded the top end of the Company’s guidance and achieved its long-standing production target. However it anticipates gold production to reach between 87 500 and 97 000 ounces this year.
“Production guidance for 2023 assumes that Blanket will broadly maintain the production rate achieved in 2022. 2023 guidance also includes the estimated production from the small oxides project at Bilboes where mining activity is expected to commence in February, and we expect to extract gold from the heap leach process in March,” said Caledonia Chief Executive Officer, Mark Learmonth.
The group has set aside a US$ 30 million capitalization program for the year.
Capital expenditure at Blanket in 2023 includes approximately US$9.6 million in respect of a new tailings facility (reflecting tightened regulatory requirements) and a further US$9.8 million of deep-level capital development so that operations can be maintained in future years.
In 2023, it is expected that approximately US$2 million will be incurred in the preparation of a revised feasibility study for the larger sulphide project at Bilboes. It is anticipated that the cost of the projected capital expenditure for the group will be met from operating cash flows and in-country borrowings.
“The on-mine cost of the small oxides project at Bilboes reflects the low grade of the oxide material. The oxides project is not expected to be representative of the much larger sulphide project at Bilboes in terms of grade, production levels or cost profile. Nevertheless, the oxides project is expected to contribute to the group’s cash generation whilst at the same time allowing us to pre-strip to the deeper sulphide material,” said Learmonth.
“Over the last 18 months the Company has built an attractive portfolio of assets with the acquisitions of Bilboes, Motapa and Maligreen. Blanket will continue to serve as a solid foundation for this growth, as we look to progress our assets with our long-term goal of becoming a multi asset gold producer.”