(Alliance News) - Caledonia Mining Corp on Wednesday said a sharp rise in the gold price helped offset a decline in quarterly production.
During the three months to September, Caledonia's gold production dipped 2.4% year-on-year to 13,646 ounces, held back by lower mining rates and lower grades. However, the figure was up 7.3% quarter-on-quarter.
All-in sustaining costs were 16% higher, but the average realised gold price was 23% higher, helping pretax profit more than double to USD10.4 million.
Jersey-based Caledonia, which mines from the Blanket project in Zimbabwe, registered a 20% increase in revenue to USD20.0 million.
"The third quarter of 2019 can be characterised 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," said Chief Executive Steve Curtis.
"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," Curtis continued.
Looking ahead, Caledonia is confident on meeting 2019 production guidance of 50,000 ounces to 53,000 ounces of gold. By 2022, it wants to produce 80,000 ounces a year from Blanket.
The company in August lowered 2019 guidance from 53,000 ounces to 56,000 ounces due in part to power cuts in Zimbabwe. Production in 2018 was 54,511 ounces.
Shares were 2.2% lower on Wednesday at a price of 610.00 pence each in London.
By George Collard; georgecollard@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.
Caledonia Min (CMCL)