Blanket mine maintains 2020 gold output target

Blanket mine maintains 2020 gold output target

Harare (New Ziana) – Caledonia’s local mining unit, Blanket mine in Gwanda, is on course to deliver its 2020 production target of between 53 000 – 56 000 ounces of gold despite disruptions caused by the Covid-19 pandemic.

The global pandemic has disrupted normal business activities as most countries took drastic precautions to stop the spread of the deadly virus.

In response to the pandemic, Zimbabwe initially went into a level 5 total lockdown, shutting down all businesses except essential services, before gradually lifting restrictions.

Despite the disruptions, Caledonia is confident that its local unit will achieve 2020 production projections.

“Significant business resilience demonstrated through the Covid-19 pandemic with gold production levels still within the range of 2020 guidance of 53,000 – 56,000 ounces,” it said in a notice.

Meanwhile, Caledonia announced an increased quarterly dividend of US$0.085 on each of the company’s common shares, up from the previous US$0.075.

The Canadian firm attributed the upward review to stable production and favourable gold prices.

“Stable production, a high gold price and good cost control have resulted in increased cash generation in 2020. This has given the board confidence that the business can sustain a higher level of dividend distributions.”

Commenting, Caledonia chief executive officer Steve Curtis said Caledonia was committed to delivering returns to shareholders and pursuing significant growth opportunities within Zimbabwe.

“We are pleased to announce a 13 per cent increase in the dividend which reflects our continuing confidence in the outlook for our business. As we reported in our Q1 2020 results, our financial performance has been strong due to increased production and a higher gold price which has continued into Q2 2020.

“As we approach the end of the five-year investment programme at Blanket Mine, we anticipate the rate of capital expenditure will begin to reduce towards the end of 2020, which gives us greater flexibility to consider deploying some of our cash reserves on an increased dividend,” he said.

On the mine expansion project, Curtis said Blanket was on course to deliver the targeted 80 000 ounces of gold per annum by 2022.

“We expect the Central Shaft equipping to be completed in the fourth quarter of 2020; thereafter we look forward to the commissioning of the shaft and further increases in operating cash flow as production is expected to increase by over 30 per cent over the coming 24 months to approximately 75,000 ounces in 2021 and to the target rate of 80,000 ounces of gold per annum from 2022.”
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