12th Aug 2014 10:33
LONDON (Alliance News) - Caledonia Mining Corp Tuesday said the second quarter and the first-half of the year as a whole presented significant challenges as a result of continued low grades which adversely affected gold production.
Gross profit from the company's mines fell to USD5.6 million in the second quarter, from USD8.6 million in the second quarter 2013. This was despite company's primary asset, the Blanket Mine in Zimbabwe reinforcing its position as a low-cost producer.
Blanket's on-mine cost fell to USD624 per ounce during the second quarter from USD651 per ounce in the previous quarter. Blanket's all-in sustaining cost fell to USD881 per ounce in the second quarter, from USD924 per ounce in the previous quarter.
Cost reductions were achieved as a result of improved cost controls, greater operating efficiency and reduced sustaining capital expenditure. Caledonia Mining said that despite the lower gold price Blanket continues to generate sufficient cash so that it can continue to invest for future production growth.
Overall, the company said management intervention to improve grade control resulted in some improvement in the second quarter, but it is likely that the achieved grade in further quarters will continue to be at or slightly lower than the level that was achieved in the second quarter.
Looking ahead, Caledonia said production for 2013 is expected to be around 45,000 ounces of gold.
"Guidance for 2015 and beyond will be provided towards the end of 2014, once the review of Blanket's medium term capital investment programme has been completed," the company said.
The stock was quoted down 1.7% at 59.00 pence Tuesday morning.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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