9th Oct 2026 13:31
(Alliance News) - Caledonia Mining Corp PLC stock fell on Friday after it announced reductions to its full-year production guidance due to various factors impacting production in the third quarter.
Shares were down 8.3% at 1,650.00 pence on Friday afternoon in London.
The operator of the Blanket gold mine in Zimbabwe reported weaker-than-expected third-quarter output from the project, with gold production falling 11% to 17,030 ounces from 19,106 ounces a year earlier. Production for the first nine months of the year declined 16% to 49,158 ounces from 58,846 ounces.
Caledonia said output was adversely affected by a shortage of compressed air at certain high-grade, high-volume mining areas and a temporary increase in the gold inventory in the metallurgical plant.
It noted that it has procured four new compressors to facilitate mining at the deeper 30 and 34 levels, but explained that "delays in [their] delivery and deployment...severely adversely impacted production at this crucial high-grade mining area."
The firm said two of the new compressors have now been deployed, while the others have been released from port and are en route to the mine.
As a result, Caledonia expects production levels to normalise in the fourth quarter.
Caledonia also said it introduced equipment in September to improve efficiency, recovery and security in the gravity gold circuit, but that commissioning difficulties resulted in the metallurgical plant retaining approximately 1,100 ounces of free-gold. The company expects to recover this free-gold "over a period of time, commencing mid-October, after the increased elution capacity has been commissioned."
Caledonia anticipates that fourth-quarter production will benefit from the additional compressed air capacity; the free-gold's recovery; the processing of additional ore from the Lima satellite plant; more mining flexibility and access to higher-grade areas; and improved elution capacity and recovery performance.
However, it has lowered the Blanket mine's 2026 production guidance to between 69,000 and 72,500 ounces from between 72,000 and 76,500 ounces.
Caledonia also raised its on-mine cost guidance to USD1,700 to USD1,900 per ounce sold from USD1,600 to USD1,800, and its all-in sustaining cost guidance to USD2,650 to USD2,850 from USD2,500 to USD2,700.
Additionally, it lowered its annual capital expenditure guidance to USD94.3 million from USD103.3 million, which it said reflected the deferral of certain spending into 2027 and "does not reflect any material reduction in the overall scope of planned capital projects."
Caledonia added that it believes the revised 2026 guidance "will have no adverse effect on [its] ability to utilise internal cash flows to contribute towards the funding of the Bilboes development project."
"Although we have revised our guidance for 2026 to reflect the third-quarter performance, Blanket remains a robust and cash-generative operation," commented Chief Executive Mark Learmonth. "We remain focused on delivering a stronger performance in the fourth quarter and implementing the operational improvements required to support production and cash generation in 2027."
By Emma Curzon, Alliance News reporter
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