Caledonia Mining Corporations local unit Blanket Mine recorded a seventh consecutive increase in gold production to 10 533 ounces in the fourth quarter to December 2011 up from 9 743 ounces in the previous quarter.
The performance of the fourth quarter ensured gold production was up 102% to 35 826 ounces for the year.
In a trading update, Caledonia said turnover for the year ended December 2011 increased to $55,7 million from $22,3 million the previous year.
Gross profit was up 358% to $29,1 million while net profit after income taxes amounted to $12,1 million.
During the fourth quarter, Blanket paid $5 million towards taxes, royalties, licence fees, levies and other payments to the government.
I am delighted to report the fourth quarter of 2011 was the culmination of a highly successful year for Caledonia, during which gold production at the Blanket Mine in Zimbabwe more than doubled.
Production has now increased in each of the last seven quarters, president and chief executive Stefan Hayden said.
In the fourth quarter of 2011, 10 533 ounces of gold were produced, which exceeded our quarterly production target of 10 000 ounces. In addition, the cash cost of production was significantly reduced for the year as a whole (and this) reduction, which is in line with our earlier guidance, was due to improved operating efficiency and benefits of economies of scale.
In the fourth quarter the cash cost of production was reduced for the year as a whole to $581 an ounce, compared to $751 an oz in 2010.
He said with the reduction in production costs Blanket Mine was now one of the most efficient and lowest cost gold producers on the continent.
In February, Caledonia and the Indigenisation and Empowerment ministry signed a memorandum of understanding (MoU) agreeing to dispose a 51% stake valued at $30 million to locals.
Hayden said the group was working hard on various transactions envisaged in the MoU with the government and hope to implement the agreement during the second quarter of 2012.
Under the deal the National Indigenisation and Economic Empowerment Fund will acquire a 16% stake, management and staff 10%. As yet to be identified local partners will take 10% while a further 10% would be donated to the Blanket Gwanda Community Trust including a non-refundable donation of $1 million.
Foreign owned companies are compelled under the indigenisation and empowerment programme to sell at least 51% of the shareholding to indigenous Zimbabweans.