Low cost junior gold miner Caledonia Mining says production at its Blanket Mine in Zimbabwe rose to 10 822 ounces in the three months ending March, 8.7 percent above the same period last year.
Net profit however dropped to $543 000 from $1.256 million after a deferred tax charge of $909 000 at Blanket Mine, the company said in a quarterly update.
Gold prices for the quarter averaged $1 166 per ounce compared to 1 198/oz previously. Costs were lower at $950/oz compared to $985 in the comparable period.
Cash from operations grew by 31 percent to $1.750 million from $1.333 million last year on higher sales volumes and lower operating costs.
Caledonia had a net cash position of $8.841 million – including an overdraft of $4.673 million held by Blanket – from $20.640 million last year as the company continues its investment in the mine as per its Revised Investment Plan.
“Progress on implementing the Revised Investment Plan at Blanket remains on track. Towards the end of the quarter, production commenced as planned from the No. 6 Winze and from an additional development which provides access to ore below the 750 meter level,” said chief executive, Steve Curtis.
“These developments have substantially improved operational flexibility and are expected to be the main reason for the projected increase in production from 42 800 ounces in 2015, to approximately 50 000 ounces in 2016. The projected increase in production in 2016 is expected to result in improved cash generation due to higher sales volumes and lower costs per ounce of gold as fixed costs are spread over more gold ounces produced.”
Caledonia, which owns 49 percent of Blanket Mine, successfully moved its registration from Canada to tax haven Jersey, Channel Islands, on March 19 this year to avoid charges on dividends.
Jersey is one of seven inhabited islands making up the Channel Islands and, along with Guernsey, is a British dependency.-The Source