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(Kitco News) - On Monday, Zimbabwe-focused gold producer Caledonia Mining (NYSE: CMCL) announced Q2 2023 gold production of 18,512 ounces from its Blanket mine and Bilboes oxides project, down 8% from 20,091 ounces produced in Q2 2022.
The company said that production at Blanket of 17,436 ounces of gold in Q2 2023, although improved from the previous quarter (Q1 2023: 16,036 ounces), was below expectations primarily due to "high level of missed blasts and errors in blasting accuracy” which contributed to "inadequate” face advances.
However, Caledonia noted that its management has focused intensively on these problem areas and production in late June and in July has shown a marked improvement.
Importantly, the company said that in light of the improved performance in late June and early July, it re-iterates its production guidance for Blanket for the year to December 31, 2023 of between 75,000 and 80,000 ounce.
Caledonia also reported that additionally, 1,076 ounces of gold were produced from the Bilboes oxides project in Q2 2023 (zero production in Q2 2022).
"The Bilboes oxides was intended as a small-scale, low-margin, short-term project which was primarily justified by the benefits of pre-stripping in anticipation of the development of the larger sulphide project,” the company said.
Caledonia added it has previously withdrawn guidance for the Bilboes oxides and, in the absence of a reasonable prospect of it making an overall cash contribution, the project will be returned to care and maintenance with effect from October 1, 2023.
"We have decided to return Bilboes to care and maintenance until the work commences on the larger sulphide project when the remaining oxide material will be mined and processed alongside the sulphide ore. This outcome has no bearing on the quality of the much larger sulphide project which was the sole reason for acquiring Bilboes," the company noted in a press release.
Caledonia Mining's primary asset is the Blanket gold mine in Zimbabwe. The company has a 64% share in Blanket. The company has also committed to evaluate investment opportunities in Zimbabwe; since November 2021 it has acquired Maligreen, Motapa and Bilboes projects. Caledonia's vision is to become a multi asset gold producer.
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