By Almot Maqolo.
HARARE – (News of The South) – Blanket Mine recorded about 93 percent of its normal target production by using its stocks of consumables and implementing measures to safeguard employees during the lockdowns which extended for much of April, its parent company said on Tuesday.
Caledonia Mining Corporation holds a 49 percent stake in Blanket Mine.
In a trading update, chief executive officer Steve Curtis said production has subsequently returned to normal levels.
“In early May, Blanket resumed full production and I expect production to continue as planned provided Blanket’s workforce remains healthy and its supply chains and access to market for the gold produced remain open,” he said.
Gold production in the first quarter ended March 31, 2020 rose 19 percent to 14 233 ounces from 11 948 ounces in the same period last year. Production guidance for 2020 remains unchanged at 53 000 to 56 000 ounces.
The Central Shaft project is progressing well but at a slower pace owing to a reduced contractor team. However, when completed it is poised to increase production to 80 000 ounces of gold per annum.
Curtis said the completion of the project requires specialised equipment and contractors to travel to the mine from South Africa which under the restrictions is not currently possible.
“This has not yet resulted in a significant delay to the project and we are receiving a high level of support from the Zimbabwe government to address these issues with the relevant authorities in South Africa,” he said.
While the southern African nation continues to face challenges, he said, the introduction of the interbank rate early in 2019 allowed the company to better protect its workers from the effects of high inflation.
Power cuts experienced last year have largely been addressed following the conclusion of an agreement whereby Blanket (and other gold producers) purchases power which is imported into Zimbabwe. This power is cheaper than under the previous arrangement and Blanket can manage the reduced incidence of power interruptions using its increased suite of diesel generators.
“We are also well advanced in the evaluation of a solar project to provide some of Blanket’s power supply and reduce its dependence on imported power during daylight hours,” he said.
Due to increased production, combined with lower on-mine costs per ounce and an improved gold price, saw the miner realising a substantial rise in profit. Gross profit for the quarter more than doubled from $4.3 million in the first quarter of 2019 to over $10 million in the quarter.
Gross revenues rose 48 percent to o$23.6 million from $15.9 million in Q1 2019. Net cash from operating activities surged to $10.7 million from $6.3 million.
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