JOHANNESBURG (miningweekly.com) – TSX- and Aim-listed Caledonia Mining on Thursday posted a “better-than-expected” first-quarter performance from its 49%-owned Blanket mine, in Zimbabwe.
The group reported a 3.7% increase in gross profit to $3.9-million on the back of higher gold production and sales and a lower average cost per ounce, offset by the lower realised gold price of $1 166/oz.
“Production was marginally better than target. On-mine operating costs [of $689/oz] and all-in sustaining costs (AISC) were lower [at $950/oz] than in the comparable quarter and reflect continued strict cost control and lower sustaining capital expenditure,” said Caledonia president and CEO Steve Curtis in an update to the market.
Profit for the period halved to $848 000 from the $1.6-million posted in the prior corresponding period; however, adjusted basic earnings a share ticked up from 2.6c in the first quarter of 2015 to 2.7c apiece in the quarter under review.
Revenue increased from $12.9-million in the corresponding quarter the year before to $13.4-million in the first quarter of 2016.
Blanket mine delivered an 8.7% increase in gold output to 10 822 oz owing to higher ore production following the completion of the tramming loop in 2015 and improved recovery, offset by a slightly lower grade.
The company held net cash of $8.84-million as at March 31, which was better than expected.
The higher gold price, if sustained, and an expected increase in production during 2016 were expected to enhance cash generation.
“I therefore expect Caledonia's treasury will begin to improve in the second half of 2016 when Blanket resumes dividend payments, which will also result in the resumption of the repayment of the facilitation loans from Blanket's indigenous Zimbabwean shareholders,” said Curtis.
Edited by: Creamer Media Reporter
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