Caledonia raises guidance as it looks to expand operations in Zimbabwe

5.10.2020, 19:27 - eeppo

Caledonia Mining (LSE: CMCL) has increased its guidance for the full-year to between 55 000 oz and 58 000 oz after an record production at its Blanket mine in Zimbabwe in Q3 2020.

According to the company, approximately 15,164 ounces of gold were produced during the quarter ended 30 September, an increase of 11.1 per cent on the 13,646 ounces produced in the corresponding quarter of 2019.

Gold produced in the nine months to September 30, 2020 was 42,896 ounces, 12 per cent more than the 38,306 ounces produced in the nine months to September 30, 2019.

“Notwithstanding the negative effect of the coronavirus pandemic on supply chains and operating arrangements, Blanket has delivered robust production results for the first nine months of 2020.” said Caledonia CEO Steve Curtis.

The company said it remains on track to achieve its production target of 80,000 ounces by 2022.

“Zimbabwe is very attractive geologically and we are serious about growing our operations in the country,”

Caledonia spokesman Maurice Mason

Caledonia it’s in talks to acquire assets that would expand its gold-mining operations in Zimbabwe.

The Toronto-based gold producer is targeting both privately held assets and mothballed mines owned by the state, its spokesman Maurice Mason told Bloomberg.

He declined to name the companies Caledonia was talking to, but said the miner hopes to make an announcement on at least one of the assets by the end of this year.

Acquisitions could help Caledonia boost its annual output more than eightfold to half a million ounces as the company considers investing $400 million in Zimbabwe over the next decade. The southern African nation is battling to attract investors as it struggles with food and fuel shortages amid a crackdown on political opponents by President Emmerson Mnangagwa.

“Obviously there is risk but we think some of those risks are mis-priced by the market,” Mason said. “Zimbabwe offers good return for acceptable risk.”

“Zimbabwe is very attractive geologically and we are serious about growing our operations in the country,” Mason said. “The government is saying they are committed to helping us with the regulatory framework there, but looking specifically at state assets.”