Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL)’s underlying profits more than trebled in its latest quarter due to higher gold prices and lower production costs at the Blanket gold mine in Zimbabwe.
Gross profit rose to US$13.8 million (Q1 2023: $5.8 million) as gold revenue rose to US$38.5 million while sustained costs (AISC) dropped to US$1,296 an ounce from US$1,412.
Underlying profits rose to US$9.9 million (Q1 2023: $2.3 million) with Blanket chipping in US$17.5 million gross.
AISC costs fell due to lower costs incurred at the new project, Bilboes, also in Zimbabwe, one-off costs falling out and benefits from a new solar plant, but are expected to rise over the year.
Production during the quarter was up 6% at 17,476oz of gold on higher grades and recoveries. Nearly all gold came from Blanket with 426oz from the Bilboes oxide mine.
Blanket's production increased again in April to 7,956 ounces of gold, with "encouraging" results as well from underground exploration, said the statement.
Production from the mine over the whole of 2024 is expected to be between 74,000 to 78,000 ounces of gold with AISC guidance unchanged at 1,370/oz to 1470/oz.
Mark Learmonth, chief executive, said: "The first quarter of 2024 got off to a strong start with an increase in production and profit, supported by a favourable gold price. This has continued through April and into May.
Underground exploration has yielded excellent results, he added, with the Blanket, Eroica and AR South ore bodies seeing better-than-expected grades and widths at depth.
“The results of this drilling programme are being incorporated into a new technical report summary for Blanket Mine which we will announce shortly; it will show a meaningful increase in the life of the mine at Blanket.
"Work to refresh the existing study for the large-scale sulphide project at Bilboes is well-advanced. Management is considering various options for developing Bilboes, with a view to optimising capital allocation.
“Thereafter, the work on the selected development route will be upgraded to a feasibility study. This activity will take place in parallel with a process to secure debt finance for the project."