TORONTO Stock Exchange-listed Caledonia Mining Corporation has reported a 2% decline in gold production to 10 241 ounces for the first quarter of 2014 due to lower head grade and tonnage throughput.
In the same period last year gold output was 10 472 ounces.
Gold sales increased to 12 210 oz in the first quarter 2014 from 11 964 oz in 2013 while the average realised gold prices were $1 288 down from $1 600.
During the period under review, revenue declined to C$17 million (about $15,6 million) from C$19 million (about $17,4 million).
The company said Caledonia’s primary strategy was to continue the existing investment programme at Blanket with the objective of increasing production.
In the period under review the group recorded decline in after tax profit to (Canadian C$4, 1 million (about $3,8 million) from rom C$5,5 million (about $5 million) during the same period last year.
Caledonia is a mining, exploration and development company focused on Southern Africa.
Caledonia’s primary assets are a 49% interest in the Blanket Mine in Zimbabwe and a 100% interest in the Nama base metals exploration project in Zambia.
The company said Blanket Mine continues to implement its growth strategy which would result in production increasing to approximately 48 000 ounces of gold in 2014 and 52 000 ounces of gold in 2015.
Further increases in production are expected following the completion of the No 6 Winze Project, which is intended to provide access to deeper resources below 750 metres, it said.
Commenting on these results Stefan Hayden, Caledonia’s president and chief executive officer, said the new production areas were being developed and was confident that the 2014 production target of 48 000 ounces will be achieved, with 52 000 ounces expected in 2015.
Hayden said since the beginning of 2014 Blanket has sold its gold production to Fidelity Printers and Refiners and the new sales arrangements has reduced Blanket’s working capital requirement due to the earlier payment terms.
He added that Blanket Mine had received all payments due from Fidelity in-full and on time.
“Blanket’s on-mine cash cost decreased in the quarter from the previous quarter due to the reversal of the adverse effect of high work-in-progress as at December 31, 2013. Work-in-progress was brought forward at a carrying value of $411 per ounce, which reduced the average cost per ounce of the gold sold in the quarter.