Caledonia Mining Benefits From Higher Gold Production And Prices

21st Mar 2018 12:10

LONDON (Alliance News) - Caledonia Mining Corp PLC said on Wednesday that profit rose in 2017 alongside revenue on the back of higher production, higher gold prices and lower costs.

The miner reported a pretax profit of USD20.6 million for the year, up from USD19.0 million in 2016, as revenue rose to USD69.8 million from USD62.0 million, driven by a rise in production to 56,133 ounces from 50,351 ounces.

The average realised gold price rose to USD1,243 per ounce from USD1,232 the year before, while the all-in sustaining cash cost per ounce fell to USD847 per ounce from USD912.

Costs however did rise in the fourth quarter of the year, when production was 16,425 ounces at an all-in cost of USD901 per ounce, while prices were USD1,256 per ounce. For the same period the prior year, production was only 13,591 ounces at an all-in cost of USD843 and a sale price of USD1,187.

At the end of August, the company increased the total measured and indicated gold ounces at Blanket Mine, Zimbabwe by 6.0% to 714,000 ounces from 671,000 ounces at the end of December 2016.

"We are at a very exciting point in our development. At our current production level of over 55,000 ounces of gold per annum we are already highly cash generative. For the next two years, the bulk of the cash generation will be deployed to the investment plan at Blanket, which we are confident will further increase cash flows as we increase production to 80,000 ounces of gold by 2021," said Chief Executive Officer Steve Curtis.

"Once the investment plan is completed towards the end of 2020, we expect to have substantial free cash flows to deploy elsewhere. Against this background, there are very encouraging political developments in Zimbabwe which we are optimistic will create new investment opportunities," Curtis added.

Shares in Caledonia Mining Corp were down 1.6% at 502.00 pence on Wednesday.

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