Harare (New Ziana) – Canadian mining firm, Caledonia recorded US$54.1 million profit in 2021, a 16 percent increase from the previous year on the back of record gold output at its Blanket mine in Gwanda, the company reported on Thursday.
Buoyed by a new US$67 million central shaft which was commissioned in the first quarter of 2021, output rose to 67 476 ounces from 57 899 ounces.
Caledonia chief executive officer, Steve Curtis described last year as a turning point for the business, whose revenue grew from US$100 million in 2020 to US$121 million in 2021.
“Production in the year was 67 476 ounces, which was above the top end of the guidance range and was a new record for annual production. The robust operating performance was supported by good cost control and gross profit for the year was $54.1 million – 16 percent higher than 2020,” he said.
“Now that the Central Shaft is commissioned, we expect further increases in production: guidance for 2022 is a range of 73 000 to 80 000 ounces while from 2023 onwards it is 80 000 ounces- 38 percent higher than in 2020.”
To increase production, Curtis said the immediate focus would be completing outstanding work on underground development in the new central shaft.
Further, this was expected to reduce operating costs and increase flexibility to undertake additional exploration and development at depth, thereby safeguarding and enhancing Blanket’s long-term future.
“We also believe there is excellent exploration potential in the older shallower areas of the mine and in brownfield sites immediately adjacent to the existing Blanket footprint,” he said.
To improve Blanket’s electricity supply, Curtis said Caledonia was constructing a 12 MW solar plant that would provide approximately 27 percent of the mine’s average daily electricity needs.
The power plant is scheduled to come on stream in mid-2022.
Caledonia, he said, was also firmly focused on becoming a multi-asset gold producer, and in line with that, in 2021, the company acquired mining claims at Maligreen in the Midlands Province.
The claims, he said, are estimated to host an inferred mineral resource of approximately 940 000 ounces of gold in 15.6 million tonnes of ore at a grade of 1.88g/t.
“Our immediate focus on this asset is to improve the confidence level of the existing resource base and we are currently re-assaying historic drill cores,” Curtis said.
“Our approach to new projects is highly disciplined: after further evaluation, the company has decided not to exercise the options to acquire the Connemara North property as it does not meet our investment criteria. During the year, we also divested non-core assets in the vicinity of Blanket. Caledonia continues to evaluate further investment opportunities in the Zimbabwe gold sector with a view to transforming the company into a mid-tier, multi-asset Zimbabwe-focussed gold producer.”