Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) has restated its full-year guidance for the Blanket Mine in Zimbabwe, estimating gold production to be between 75,000 and 80,000 ounces for 2023.
For the quarter ended 30 June 2023, production at Blanket was 17,436 ounces of gold, representing an 8.7% increase on the 16,036 ounces produced in the first quarter of 2023. Gold produced at Blanket in the first six months of 2023 was 33,472 ounces, compared to 38,606 ounces produced in the first half of 2022.
Despite the slight improvement in production at the Blanket Mine in the quarter, the results were still below expectations due to various factors impacting the mine plan implementation in specific mining areas, including missed blasts and errors in blasting accuracy.
The overall production for the first half of 2023 at the Blanket Mine was lower compared to the same period in 2022, which was attributed to the issues faced in the quarter, along with difficulties encountered in the previous quarter, such as mechanical breakdowns.
The company's management acknowledged these challenges and highlighted a marked improvement in production towards the end of June and in July, hence its restated full-year guidance.
In a statement, Mark Learmonth, Caledonia Mining chief executive officer, commented: "Production in the first week of July was at a record level and was almost 400 ounces better than planned. Whilst we have much work to do to make up for the production shortfall from the first six months, we are confident that we will do so and we therefore re-iterate our production guidance for 2023 of between 75,000 and 80,000 ounces of gold."
Regarding the Bilboes Oxide Project, 1,076 ounces of gold were produced in the quarter, showing an increase from the first quarter of 2023. However, there was no production at the Bilboes Oxide Project in 2022. The project was originally planned as a small-scale, low-margin, short-term endeavor to facilitate pre-stripping for the development of the larger sulphide project.
Considering the lack of a reasonable prospect of the Bilboes Oxide Project making an overall cash contribution, the company decided to return the project to care and maintenance starting from 1 October 2023.
Mining and metallurgical processing will continue at Bilboes until the end of September, followed by the continued leaching of the material already deposited on the leach pad. Oxide mining and processing will resume when waste stripping for the sulphide project commences.
Learmonth said: "The outlook for the Bilboes Oxides is insufficiently certain unless it is done in conjunction with the waste stripping for the sulphide project. Accordingly, we have decided to return this project 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."