Listed gold miner, Caledonia Mining Corporation posted positive performance during the third quarter (Q3) ending 30 September 2019 sustained by improved production and favourable gold prices despite several setbacks to its operations arising from power cuts and a generally challenging economic environment.
Production for the period was 7.3 percent higher than the prior quarter reaching 13,646 ounces and this took total production for the first nine months of 2019 to 38,306 ounces.
Meanwhile the company’s average realized gold price upped 22.8 percent at $1,461 per ounce.
This prompted a 75.1 percent gross profit increase to $ 8.49 million as compared to same period prior year and a net profit attributable to shareholder of $ 7.01 million which more than doubled that of the previous trading year.
“The third quarter of 2019 can be characterized by two distinct phases. The first six weeks of the quarter were seriously affected by power outages and by the continued effects of the unstable economic conditions in Zimbabwe on our employees; both of these factors had an adverse effect on production and financial performance. The last six weeks of the quarter showed a substantial improvement as the electricity supply improved; and measures taken in previous quarters to improve mining controls began to bear fruit. Notwithstanding further interruptions to the electricity supply in October, the excellent performance in the second half of the quarter has continued into October and early November,” Steve Curtis, Chief Executive Officer for the company said.
“In the third quarter of 2019 Caledonia delivered a strong financial performance supported by a firmer gold price and increased production. Production of 13,646 ounces was 7.3 percent higher than the second quarter of 2019 and in line with our expectations for the full year,” he added.
Net profit attributable to shareholders sprung up 215.1 percent to $ 7,007 for the quarter while its went up 397 percent to $ 39,628 year-on-year spurred by significant foreign exchange gains arising from the devaluation of the Zimbabwe currency.
“On-mine costs remained under control with cash operating costs of $686 per ounce. We remain confident in our longer-term cost guidance target of $700 to $800 per ounce as the business grows towards 80,000 ounces per year by 2022,” Curtis said.
The company says it’s on track achieving the production target of 80,000 ounces per year by 2022 at its Zimbabwean subsidiary Blanket Mine which is anchored on the implementation of the Investment Plan at the mine expected to extend the life of mine by providing access to deeper levels for production and further exploration.