Caledonia Mining encouraged by Motapa exploration, Blanket production on track
Mon Nov 11 2024
Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) said recent exploration at Motapa, acquired in November 2022 and directly adjacent to the Bilboes project in southern Zimbabwe, had shown ‘highly encouraging sulphide zone mineralisation in the historic open pits. In addition, drilling in new target areas also returned promising results both in shallower oxide and deeper sulphide zones.
Exploration so far has comprised 12,724m of trenching, 4,143m of diamond drill and 5,433m of reverse circulation drilling. The drilling featured generally wide-spaced holes at several prospects on the Motapa lease area and highlighted the presence of widespread gold mineralization over a combined strike length of more than 9km, said the statement
Highlights included 12m at 6.35 g/t gold and 13 m at 5.17g/t from different holes. Mark Learmonth, Caledonia’s chief executive, said: "The results from the sampling at Motapa have delivered encouraging results in terms of strike width, length and grade.
"Motapa sits adjacent to Bilboes, which is where the company plans to develop a major new high-grade open pit gold mine. “These initial results confirm that Motapa will continue to form a key role in the company's growth strategy."
"We continue to progress the revised feasibility study for the Bilboes sulphide project with a focus on capital allocation and expect to complete this in the first quarter of 2025.
"We are also making encouraging progress towards identifying and implementing a funding structure for Bilboes with the objective of minimising equity dilution and optimising the uplift in net present value per Caledonia share."
In addition, Caledonia reported third-quarter revenues of US$46.9 million and US$135.5 million for the first nine months of 2024.
Quarterly gold production of 18,992 ounces was lower than the comparable 21,772 ounces due to lower grade and reduced metallurgical recoveries.
Gross profit in the third quarter was US$19.3 million (Q3 2023: US$14.1 million) due to the higher gold price and lower costs of the Bilboes oxide mine, but costs were higher.
All-in sustaining costs (AISC) for the quarter were US$1,501 per ounce (Q32023: US$1,268 per ounce), due to fewer ounces sold, higher on-mine costs and increased cash-settled share-based payment expenses.
Earnings for the quarter were 12.0c (Q3 2023: 24.1c) with a dividend of 14c declared.
For 2024 and 2025, Caledonia said it aims to maintain production at Blanket at between 74,000 to 78,000 ounces though mine costs will go up to between $950 and $1,050 per due to higher labour and electricity costs.
Learmonth said that production was in line with expectations and it is on track to meet production guidance for the year.
"We continue to explore ways to reduce on-mine costs at Blanket - particularly the cost of electricity and labour where several initiatives are being implemented and further measures are under consideration,” he added.
Learmonth added that there had also been a fatality at Blanket during the quarter.
“I would like to extend our condolences to the family and friends of the deceased. We remain committed to improving our safety performance and delivering a zero-harm environment,” he said.
Source: https://www.proactiveinvestors.co.uk/