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Caledonia Mining's gold production in Zimbabwe fell in Q1 due to a series of operational issues

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(Kitco News) - On Monday, Zimbabwe-focused gold producer Caledonia Mining (NYSE: CMCL) announced Q1 2023 gold production of 16,036 ounces from its Blanket mine, 13% lower than the 18,515 ounces produced in Q1 2022.

The company explained that production at Blanket was lower than last year due to several "individually insignificant" mechanical breakdowns and logistical issues which have now been resolved and production in the early part of April 2023 has been better than expected.

Caledonia added that the company re-iterates production guidance for Blanket for the year to December 31, 2023 of between 75,000 and 80,000 ounces of gold.

Importantly, according to a press release, Bilboes commenced production of gold from oxides derived from pre-stripping works in the last few days of the quarter, producing 105 ounces of gold.

However, the company noted that commencement of oxide production at Bilboes has been slower than anticipated, "having been adversely affected by inconsistent grades, mechanical breakdowns and the poor availability of spare parts and alternative equipment."

CEO Mark Learmonth commented, "Gold production at Blanket is usually lower in the first quarter of each year and increases in the following quarters. This trend is in evidence this year, albeit production in the first quarter of 2023 was below our target due to a series of issues including equipment failures and logistical issues. These issues have been resolved and production to date in April has been higher than expected.

"The small-scale low margin oxide operation at Bilboes is effectively a pre-stripping exercise for the larger sulphide project in respect of which we have commenced work on an updated feasibility study. The oxide project was adversely affected by the breakdown of contractor-provided drill-rigs which are used for evaluation drilling and the limited availability in Zimbabwe of spare parts or alternative equipment." 

Caledonia Mining’s primary asset is the Blanket gold mine in Zimbabwe. The company has also committed to evaluate investment opportunities in Zimbabwe; since November 2021 it has acquired Maligreen, Motapa and Bilboes projects. The company’s vision is to become a multi asset gold producer.

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