Caledonia’s FY22 revenue seen at US$149.15mn

HARARE – As the central Shaft program evolved after a 5-year, US$64 million construction phase, gold production at Caledonia’s operational asset, the Blanket mine, increased 29% year over year to 38,605 ounces for the first half of 2022. Production in the second quarter came in at 20,091 ounces setting a new record for any quarter at the time. The Caledonia Mining Corporation, which owns a 64% stake in Blanket Mine, said it recorded a quarterly gold production of 21,120 ounces, “a record for any quarter”. When compared to the 18,965 ounces generated in the same quarter of 2021, it surged by 11%.

The company maintained its production momentum for the nine months that ended on September 30, delivering 59,726 ounces—a 22% increase from the same time previous year. A production record of 21,120 ounces was realized in the most recent quarter (Q3 2022), putting the business on track to meet the upper end of the 73,000 to 80,000 ounces target established for FY22. Blanket has once again broken production records this quarter. Also, for the past three quarters in a row, Dana Roets, Chief Operating Officer, said surpassing its quarterly target ounces is something they are very proud of.

“This has been an excellent year, the ramp-up in production towards our yearly target of 80,000 ounces has met our best estimate and, as a consequence, we are on track to hit the top end of our production guidance of between 73,000-80,000 ounces,” said Roets.”While we continue to put in a lot of effort to close the deal for Bilboes, we will restart the oxide operations in the hopes that they would produce a profit in the second quarter of 2023.” The Fed’s continued support for gradual quantitative tightening measures to allay inflation fears has put pressure on gold prices. In the absence of any explicit forward contracts to sustain the average realized price, prices for the precious metal are down 12% year to date to US$1672.70 ounces, partially offsetting output increases.

The transaction for Bilboes is still being worked on, but in the interim funds are being invested in the acquisition’s oxide operations with the hope that they would produce a profit in the second quarterof 2023. A USc14 dividend has been issued by the firm for Q3 2022. Overall, IH Securities expects Caledonia’s revenue to reach US$149.15 million in FY22 thanks to a 17.6% increase in gold production to 79,334 ounces, with current production trends being consistent with projections. With a long-term goal of becoming a multi-asset gold producer, Caledonia continues to assess potential investment options in Zimbabwe and is confident about its geological prospectivity.

The mining sector remains one of the key industries poised to support economic revival. The southern African nation is seeking to improve mineral exports to US$12 billion by 2023. Under the ambitious mining roadmap, gold is expected to contribute US$4 billion. With the country increasingly desperate for foreign currency, experts say, it will be crucial for the government to address and resolve the operating challenges faced by the mining sector

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