Caledonia Mining tweaks full-year production guidance after record third quarter

Steve Curtis, CEO, Caledonia Mining

CALEDONIA Mining increased full year production guidance to between 55,000 and 58,000 ounces with only three months to go before the conclusion of its 2020 financial year.

The New York- and London-listed company said it had overcome challenges to supply lines and potential work disruption posed by the Covid-19 pandemic. Previous guidance was for 53,000 to 56,000 oz.

Production in the nine months ended September 30 totalled 42,896 oz after producing 15,164 oz in the third quarter, an 11% year-on-year increase. It operates the Blanket mine in Zimbabwe.

The company also said it remained on track to produce 80,000 oz/year by 2022 as it continued to expand Blanket through its central shaft project.

“Notwithstanding the negative effect of the coronavirus pandemic on supply chains and operating arrangements, Blanket has delivered robust production results,” said Steve Curtis, CEO of Caledonia Mining. “Along with the increased dividend, this really demonstrates the strength of our business and I would like to thank the team for this result,” he added.

On October 1, Caledonia approved its third dividend increase of the past 12 months, announcing it would pay out 10 US cents per share owing to declining capital expenditure obligations from 2021, and an improved gold price.

The company paid an eight cents/share dividend in July. The latest dividend increase signals an 18% increase over the previous dividend, and a 45% increase from a year ago.

Caledonia’s stability is remarkable when set against Zimbabwe’s economic woes. According to a Bloomberg News article, Zimbabwe economy is in free-fall owing to combination of corruption, and economic mismanagement.