Caledonia Mining Corporation Plc (LON:CMCL) told investors that gold production amounted to 13,978 ounces, down 2.9% versus the comparative period in 2017. Output for the nine-month period measured 39,558 ounces.
"The third quarter of 2018 was an improvement on the second quarter of the year: we addressed some of the operating challenges which the business experienced in previous quarters; cost control remained good, and Caledonia stabilised its cash position and working capital movements,” said Steve Curtis, Caledonia chief executive.
"Production of 13,978 ounces was 3 per cent down on the third quarter of 2017 and marginally below our expectations.”
Caledonia has decided to “tighten and slightly reduce” its expectations for the full year, to 54,000 to 56,000 ounces, from 55,000 to 59,000 ounces.
Curtis added: “Grade for the quarter remained below expectations at 3.12g/t as we continued to experience some mining dilution due to the introduction of long-hole stopping in the narrower reef width areas due to safety considerations.
“Corrective measures have been taken to improve the accuracy of drilling which is expected to result in improved mined grades in the remainder of the last quarter of 2018 and thereafter.
“We remain confident that the underlying geological model for Blanket and the grade of the resource remains sound.”
Caledonia described the group’s cost performance as satisfactory considering the below-expected grade.
“On-mine and all-in sustaining costs were well-contained: on-mine costs of $670 per ounce for the quarter were 5 per cent higher than the comparable quarter due to elevated equipment maintenance and consumables costs.
“All-in sustaining costs of $754 per ounce were 2.5 per cent below the comparable quarter as we continue to benefit from a higher ECI.”
The company noted that it remains confident in the longer-term cost guidance of US$700 to US$800 per ounce, as it progresses to grow production to 80,000 ounces per year by 2021.