Caledonia Mining Corporation’s Zimbabwe unit, Blanket Mine, gold production rose by 19 percent to 20 773 ounces in the second quarter to June 30, 2024 amid bullish bullion prices on global markets.
For the six months to June 30, the firm’s bullion output reached 37,823 ounces, reflecting a 13 percent rise over the same period in 2023.
Caledonia maintained its full-year 2024 gold production guidance at between 74 000 and 78 000 ounces. The strong performance by the company augurs well for Zimbabwe at a time when gold is having its best performance in history.
Gold is Zimbabwe’s single largest export and continues to anchor foreign currency generation at a time when most other minerals are doing dismally.
Minerals, including nickel, copper, diamond and lithium, account for more than three-quarters of Zimbabwe’s export earnings.
This also comes as the country’s other key primary sector, agriculture, is being weighed down by the impact of the El Nino induced drought.
According to the Chamber of Mines of Zimbabwe, gold output reached an all-time high of 37,3 tonnes in 2022, up from 31,5 tonnes in 2021, and was projected to increase to 42 tonnes in 2023.
Caledonia chief executive Mark Learmonth expressed satisfaction with the results, emphasising the company’s preparedness to transition into a multi-asset gold producer.
“Blanket Mine continues to provide a solid foundation for growth as we prepare to become a multi-asset gold producer. Production in the first half of 2024 was excellent and has exceeded our expectations.
“We remain on track to hit our annual production target of 74 000 to 78 000 ounces of gold,” Mr Learmonth said.
Caledonia also announced a quarterly dividend of 14 cents per share earlier in the month, which is payable on July 26, 2024.
The ex-dividend date for VFEX shares was yesterday, July 11 for Britain’s Alternative Investment Market, and July 12 for the US’ New York Stock Exchange, with a record date of July 12, 2024.
The company has maintained a quarterly dividend policy since 2014, aiming to maximise shareholder value while balancing investment opportunities and risk management.
Last month, the company said it planned to file a preliminary economic assessment (PEA) for a single-phase development of the Bilboes sulphide gold project.
The PEA, prepared by DRA Projects, outlines a strategy for a modular Tailings Storage Facility (TSF) to reduce initial capital expenditure.
“The project is expected to yield around 1,5 million ounces of gold over a 10-year mine life at an all-in sustaining cost of US$968 per ounce, with a payback period of 1,9 years at a gold price of US$1 884 per ounce.
“The board’s decision to proceed with the single-phase development option for Bilboes represents a key strategic milestone in our journey to becoming a multi-asset, mid-tier gold producer.
“Notwithstanding the general inflationary increase in operating costs and capital costs over recent years, the PEA re-confirms that Bilboes is a high-quality mid-scale asset that can generate attractive economic returns.
“The PEA also confirms that Bilboes has an attractive production profile with the potential to almost triple Caledonia’s production capacity to over 200 000 ounces per annum in combination with production from Blanket Mine,” Mr Learmonth added.
According to reports, the peak funding requirement for the Bilboes project is expected to be approximately US$309 million, with a sizable proportion funded through debt.
“The company and, in the past, Bilboes’ previous owners, have had highly positive engagements with prospective debt providers and we now propose to re-engage with these providers in parallel with the process of preparing the New Feasibility Study,” the chief executive said.
Further work to enhance the confidence level of the study to a feasibility level is expected to be completed by the first half of 2025.
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