Gwanda-based gold producer, Blanket Gold Mine, upped production of the precious metal during the first quarter to March 31, 2020 despite some operational glitches caused by the Covid-19 pandemic.
The mine produced 14,233 ounces of gold from its Blanket Mine, up from the 11,948 produced in the prior comparable period.
Strategies implemented by the Caledonia Mining Corporation-owned mine during the period ensured that production continued at approximately 93 percent of initially set targets during Zimbabwe’s lockdown period, which commenced on March 30, 2020.
Operations at the mine have, however, returned to normal levels.
Total revenues for the period amounted to US$23, 6 million, a 48 percent increase on the $15, 9 million achieved in the first quarter of 2019.
The gold producer posted a gross profit of US$10, 6 million, which was a 146 percent increase on the US$4, 3 million, which was recorded during the prior comparable period at a gross margin of 50 percent.
The group reported earnings before interest, taxes, depreciation and amortisation (EBITDA) of US$10, 2 million, a 162 percent increase on the US$3, 9 million in the first quarter of 2019 at a margin of 43 percent.
All-in sustaining costs came in at US$879 per ounce, down significantly from the 2019 number of US$1,039 per ounce.
Caledonia chief executive officer Steve Curtis highlighted an improved operational environment in Zimbabwe.
“In parallel with the improved financial and operating performance, I am also pleased to report an improved operating environment in Zimbabwe. Although the country continues to face challenges, the introduction of the interbank rate early in 2019 allows us to better protect our workers from the effects of high inflation,” said Mr Curtis.
“The interruptions to the supply of electricity from the grid which we experienced last year have largely been addressed following the conclusion of an agreement whereby Blanket (and other gold producers) purchases power which is imported into Zimbabwe. This power is cheaper than under the previous arrangement and Blanket can manage the reduced incidence of power interruptions using its increased suite of diesel generators.
“We are also well-advanced in the evaluation of a solar project to provide some of Blanket’s power supply and reduce its dependence on imported power during daylight hours.”
He added: “The coronavirus pandemic had no appreciable effect on Blanket or Caledonia during the quarter because lockdowns were only implemented by the Zimbabwe and South African governments to manage the virus at the end of the quarter.
“During the lockdowns, which extended for much of April, Blanket achieved approximately 93 percent of its normal target production by using its stocks of consumables and implementing measures to safeguard employees.
“In early May, Blanket resumed full production and I expect production to continue as planned provided Blanket’s workforce remains healthy and its supply chains and access to market for the gold produced remain open.”
Caledonia announced a dividend of US$0.075 per share, which will be paid this month.