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HomeBusinessCaledonia Maintains 80,000 ounces Target Despite Rocky 2023 Start

Caledonia Maintains 80,000 ounces Target Despite Rocky 2023 Start

The start-up of the recently acquired Bilboes Mine and technical challenges at Blanket Mine affected the quarter-one (ended 31 March) financial results of New York Stock Exchange-listed gold producer Caledonia Mining Corporation Plc.

The company’s gross revenues decreased to $29.4 million, reflecting lower gold production at Blanket Mine. Furthermore, the EBITDA contribution dropped to $2.25 million from $14.5 million due to higher operating costs at Blanket and the costs at the Bilboes oxide mine. Additionally, the on-mine cost per ounce increased by almost $500 per ounce from $698 in Q1 2022 to $1,196 per ounce, mainly due to Bilboes oxides mining activities.

However, the company’s management believes that these challenges have now been resolved and production and cost data in April and to date in May are encouraging. Therefore, Caledonia reiterates its production guidance of 75,000-80,000 ounces for Blanket for 2023.

“The first quarter of 2023 presented several operational challenges at Blanket which resulted in lower production and higher costs. We are confident these issues have been identified and addressed, and we reiterate our production guidance for Blanket of between 75,000 and 80,000 ounces of gold,” the company’s CEO Mark Learmonth said.

Despite the lower financial performance, Caledonia’s near-term actions relating to Bilboes are to re-start oxide mining operations and prepare a revised feasibility study in respect of the larger sulphide project. Technical challenges were encountered on re-starting the oxide mining, but it is hoped that gold mining from near surface oxide deposits will be cash neutral and will help the Company to maintain Bilboes’ operational integrity pending completion of the feasibility study.

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Adjusted loss per share was 29.1 cents, which was a significant decrease compared to a profit of 62.5 cents in Q1 2022. The net cash position at the end of Q1 2023 was negatively impacted by a build-up in undelivered gold to a value of approximately $2.8 million at the end of the Quarter pending the implementation of a new gold sale mechanism in early April.

Despite the challenges faced by the company, dividends of 14 cents per share were paid in January.

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