Zimbabwe-focused gold producer Caledonia’s quarterly profit plummets amid higher costs

By Agencies

• Revenue flat at USD37.0 million.
• Production costs increase 43% to USD20.7 million from USD14.5 million.
• Net foreign exchange loss of USD3.6 million 

Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) said production is picking up again after a challenging six months for the Blanket Mine, especially in the second quarter.

As part of remedial action, the Zimbabwe-based miner also said it would put its Bilboes oxide operation back on a care and maintenance basis.

Gold production in the three months to June was 17,436oz (20,091oz) with waste-stripping at Bilboes also pushing costs up.

Second-quarter gross revenues were flat US$37 million with underlying profits of US$10.5 million for the quarter and US$11.2 million for the half compared to US$17.8 million and US$31.4 million respectively a year ago.

Mark Learmonth, chief executive, said: “Mining is never without its difficulties, and the first half of this year has certainly not been without its challenges.

“However, Blanket is now running better than expected and I look forward to achieving production guidance of between 75,000 and 80,000 ounces of gold for 2023.

“Due to the lack of confidence that the Bilboes oxide mine can operate profitably, it will return to care and maintenance with effect from October 1, 2023.”

He continued: “In due course, the remaining oxide material will be mined and processed alongside the sulphide ore.

“This outcome has no bearing on the viability of the much larger sulphide project which was the reason for acquiring Bilboes.

“The feasibility study results on the project will be published before year-end.”