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High Gold Price Rescues Caledonia After Poor First Quarter Results

Higher gold price rescued the New York stock-exchange listed company, Caledonia Mining Corporation after its first quarter ended March 31,2021 results reported poor production at its Blanket Mine in Gwanda.

The company recorded gross revenues of US$25.7 million against $23.6 million realized in the corresponding quarter from the previous year.

Revenues include sale proceeds of 1,584 ounces of gold in work-in-progress brought forward from 2020.

In a statement released by the company, Caledonia CEO, Steve Curtis said heavy rains the country experienced earlier this year affected production.

“The first quarter of 2021 raised several challenges which I am pleased to say have now rectified. The fall-of-ground at AR South has been resolved and this high-grade area is back in full production. The underground flooding which resulted in five lost production days was caused by exceptionally heavy rains; rainfall in the first quarter was more than two-and-a-half times higher than the average for the same period in previous years.

“In response, we increased our pumping capacity so that we can manage any repetition of this event in future. On the positive side, the heavy rain means that water supply, which has sometimes been a cause for concern, is assured for the foreseeable future,” he said.

However gold production in April shows a marked improvement as Blanket produced 5,470 ounces in April – production higher than planned.

“The strong recovery in performance has continued into May and we are confident that we will achieve our full-year guidance of between 61,000 and 67,000 ounces,” Curtis said.

Meanwhile, Caledonia recently commissioned the deepest shaft of any gold mine in Zimbabwe at its Blanket Mine. The project which cost US$67 million is expected to increase gold production at the mine to 80,000 ounces per year.

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