CALEDONIA Mining Corporation’s local unit Blanket Mine recorded gold sales amounting to 11 964 ounces in the first quarter ended March in another solid performance for the group.
Report by Business Reporter
In a trading update Caledonia said during the first quarter the cash operating cost per ounce of gold produced in the quarter increased to $669 from $605 in the preceding quarter.
Overall cash cost fell to $7 million compared to $7,2 million in the preceding quarter, but the cost per ounce of gold produced increased due to the lower gold production during the quarter.
During the period under review, Blanket produced 10 472 ounces of gold.
“The first quarter of 2013 represented a further quarter of the daily production rate ahead of expectations and a resulting gross profit of $9 million,” Caledonia president and chief executive officer Stefan Hayden said in a trading update.
“The increase in cost per ounce was largely due to lower production, which means that Blanket’s fixed costs were spread over fewer ounces of gold.”
The gold output was expected to rise to 40 000 ounces in 2013.
Net profit after tax for the quarter attributable to Caledonia shareholders was $4,6 million while net profit was approximately $2 million.
Cash and cash equivalents were at $25,2 million during the period under review.
The company said the deep exploration drilling at the mine below 750 metres has commenced with the first exploration hole into the Blanket ore body having been completed and intersected.
“A second hole is now in progress. An additional drilling machine is being refurbished and will be commissioned shortly,” Caledonia said.
The company said it has begun diamond drilling and further drilling and tunnel development was in progress to allow for a better understanding.
Hayden said production should increase to 48 000 ounces in 2014 and rise to a target of 76 000 ounces of gold in 2016.