HomeBusinessBlanket Mine reports 39% increase gross revenue

Blanket Mine reports 39% increase gross revenue



GWANDA-BASED mining concern Blanket Mine has reported a 39% increase in gross revenue in the second quarter of this year compared to the same period last year after producing 13 499 ounces of gold.

In the first half, 27 732 ounces were produced compared to 24 660 ounces which were produced in the prior period.This was before the COVID-19-enforced lockdown.

Gross revenue amounted to US$22,9 million, a 39% increase on the prior period while gross profit increased by 30% to US$9,2 million.

Earnings before interest, taxes, depreciation and amortisation (excluding net foreign exchange gains) grew 35% to US$9.6 million.

Commenting on the results, Caledonia chief executive Steve Curtis said the management initiatives which were implemented last year continued into 2020 and have resulted in a 12,4% increase in gold production in the first six months of 2020 compared to the same period last year.

“This continued improvement is despite the challenges we encountered as a result of the COVID-19 pandemic: production in the initial three-week lockdown in early April was 7% below target, but was better than planned in the remainder of the quarter,” he said.

Curtis said production for the quarter was only 1,2% below plan, while production for the first half of 2020 was 2,5% above plan.

“This trend has continued into July with July’s production also exceeding expectations. The resilience of Blanket’s operations during this difficult period is testament to the outstanding commitment of the entire team at Blanket Mine,” Curtis said. “We, therefore, remain on track to achieve our production guidance for 2020 of between 53 000 and 56 000 ounces of gold.”

Caledonia ended the quarter with net cash and cash equivalents of US$11,7 million.

Curtis said COVID-19 pandemic had no appreciable effect on Blanket’s production in the quarter.

He, however, said work on the Central Shaft has been slower than planned because several members of the supervisory team returned to South Africa when the lockdown started in late March.

“Due to continued travel restrictions, it has not been possible to replace these team members. Although the slower rate of work has not yet delayed the project significantly, the project requires specialised equipment and contractors to travel to Blanket from South Africa which under the restrictions is not currently possible,” he said.

Curtis said they were receiving a high level of support from the Zimbabwe government to address these issues with the relevant authorities in South Africa.

“It is not possible to predict when travel and other restrictions will be lifted so that work can resume on the project as planned and it is likely the timetable for commissioning of the Central Shaft will be extended to an indeterminate extent,” he said. “This may affect the anticipated build-up in production which is currently expected to be 75 000 ounces of gold in 2021 and 80 000 ounces of gold from 2022 onwards, but it is not currently possible to provide revised guidance.”

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