African Mining Network

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AMN - ZIMBABWE: Record annual gold production at Blanket

Caledonia Mining Corporation achieved a new gold production record at the Blanket mine in Zimbabwe during 2017, producing 56,133 ounces during the 12 months, 11.5% more than in 2016.

The company reported gross profit of US$26.32 million, up from US$23.49 million, and an average gold price of US$1,243 per ounce, up from US$1,232 in the year before.

Net profit for 2017 was US$9.38 million, with adjusted earnings per share confirmed at 135.4 pence per share for the 12 months ended December 31.

Caledonia chief executive Steve Curtis said: "I'm delighted to report that production for the year was a new record.

“The production difficulties we encountered in the first half of the year were identified and addressed and it was pleasing to see that these remedial measures resulted in Blanket achieving consecutive production records in the third and fourth quarters of the year.”

"In addition to increased production, we have also reduced our unit costs. Caledonia's AISC per ounce for the year was $847 per ounce - 7% lower than in 2016. The combination of increased production and lower costs and a small increase in the gold price resulted in a 14% increase in profit attributable to shareholders.”

He added: “There were some significant political developments in Zimbabwe towards the end of 2017 which culminated in the appointment of the new President.

“The new President has made several pronouncements regarding a relaxation in the indigenisation policy and specifically the removal of the indigenisation requirement for gold mining companies.”

The company intends to proceed with a funding process to raise US$4 million which will fund exploration and it may see the company’s stake in Blanket increase above 50%.

"I wholeheartedly welcome the change in legislation which means that Caledonia can commit new capital so that Blanket can commence exploration and evaluations of additional projects in Zimbabwe,” Steve Curtis said.