14th May 2014 11:56
LONDON (Alliance News) - Caledonia Mining Corp Wednesday said its pretax profit fell in its first quarter as a fall in the average gold price hit its revenue and it significantly revised down its recently-reported quarterly production figure.
The exploration and development mining company, which has operations in Zimbabwe and Zambia, said its pretax profit fell 31% to CAD5.4 million for the three months ended March 31, from CAD7.8 million the previous year.
Revenue fell 11% to CAD17.1 million, from CAD19.2 million, as the average price it achieved for gold sales fell to USD1,288 per ounce, from USD1,600 per ounce, reflecting a major drop in market gold prices during 2013.
Caledonia said that its gold production from the Blanket Mine in Zimbabwe fell 2.2% to 10,241 ounces, from 10,472 ounces, due to lower head grades and lower tonnage throughput at its operations during the period.
It had said in a production report in April that its gold production for the quarter was 10,607 ounces, which would have represented a 1.3% increase on the previous year.
"Quarterly updates are based on flash information from the mine and are subject to final assays," a spokesman for the company told Alliance News on Wednesday.
In April, the company said it saw lower production rates as the achieved grade of gold fell below the targeted 3.83 grammes per tonne of gold, due to a sub-horizontal fault at the AR South ore body between 680 and 695 meters below the surface. This displaced the ore zone to the west and south, Caledonia said, which led to production being stopped on these panels.
However, Caledonia Mining noted on Wednesday that its sales volumes for the quarter increased to 12,210 ounces, from 11,964 ounces, as it brought forward work in progress from its preceding quarter.
The company also said that despite the volatile gold price, development and exploration activity at its Blanket mine has continued and production is expected to increase to 48,000 ounces in 2014 and 52,000 ounces in 2015.
Caledonia Mining shares were down 1.1% to 45.00 pence on Wednesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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