Blanket mine output to exceed target

Published: 14 August 2013

CALEDONIA Mining Corporation, which is listed on the Toronto Stock Exchange, expects Blanket Mine to exceed targeted annual gold output by 10 percent after production in the second quarter came in ahead of budget and previous records.

Output at Blanket, an indigenised associate of Caledonia Mining Corporation however declined in the first half stood of 2013 to 22 060 ounces from 2012 24 739oz in the 2012 second half, having risen from 20 724oz in the 2012 first half.

"Management believes that Blanket is on course to produce approximately 44 000 ounces in 2013, 10 percent higher than the previous guidance of 40 000 ounces.

"Gold produced in quarter 2 was 11 588 ounces (Q1 2013, 10 472 ounces; Q2 2012, 11 560 ounces) and was ahead of the planned target of 10 000 ounces," Caledonia said.

Gold production in the quarter increased from the previous quarter due to the planned increased mine production throughput in response to the lower gold price.

The firm said quarter 3 production has started well. Production in July 2013 was approximately 4 480oz, 35 percent higher than the planned monthly target of 3 300oz.

Blanket's operating cost per ounce includes labour, consumables, electricity, general and administrative costs and the 7 percent revenue royalty payable to the Zimbabwe stood at US$769 in 2012, US$856 in quarter of 1 2013 and US$689 in quarter 2.

In response to the lower gold price, Blanket Mine introduced measures to increase mine production from approximately 1 030t per day which was achieved in the first quarter of 2013, to approximately 1 125tpd in the second quarter of 2013.

Increased gold production in the second quarter was not achieved by high-grading the mine. Average realised gold grade in quarter 2 was 3,82grames per tonne, from 4,04 g/t achieved in previous quarters and closer to the average mine grade of 3,84 g/t.

Notwithstanding higher plant throughput and slightly lower grade, gold recovery was unchanged in the quarter at 93,2 percent compared to 93,3 percent in the previous quarter.
- herald