Blanket Mine production rises 2,5 percent to 42 804oz


Blanket Mine production rises 2,5 percent to 42 804oz

GOLD production at Blanket Mine for the year 2015 increased by 2,5 percent to 42 804 ounces compared to 2014’s output of 41 771 ounces largely on higher tonnes milled.

On a quarter-on-quarter basis, production for Q4 2015 also rose to 11 515 ounces from 10 417 ounces.

Blanket mine is 49 percent owned by Caledonia Mining Corporation whose Chief Executive Officer Steve Curtis in an update said despite the tough environment, Blanket is still generating cash at operating level.

Curtis said due to the implementation of the Revised Investment Plan at Blanket, investment in the year increased to almost US$17 million compared to US$6 million in 2014.

The revised plan announced in 2014 seek to increase production to approximately 80 000 ounces of gold in 2021, further improve Blanket’s operational efficiency; and enhance Blanket’s ability for further deep level exploration and development, thereby extending the life of the mine.

“Implementation of the Revised Investment plan is on-track and within budget. During the year the Tramming Loop was completed, which allowed a sustained increase in tonnes produced in the second half of the year.

“In the middle of March 2016, production from below 750 meters commenced, as planned, via the Number 6 Winze. Production from below 750 meters is expected to increase progressively in the remainder of 2016 and 2017 and will contribute to the higher targeted production of approximately 50,000 ounces of gold in 2016 and approximately 65,000 ounces of gold in 2017,” he said.

During the year, revenue amounted to US$48,98 million down from US$53,51 million in prior year largely on depressed gold prices.

Average gold prices in the year was US$1 139 resulting in lower gross profit which declined to US$13,18 million from US$18,54 million in 2014.

All-in sustaining costs increased in 2015 to US$1 038 compared to US$969 in 2014 due to the increased sustaining capital investment while on-mine costs in the year at $701 increased due to the lower average grade which outweighed the overall reduction in cost per tonne milled.

Curtis said the increase was largely due to higher sustaining capital investment in 2015 compared to 2014 and it is expected that the AISC per ounce will fall in 2016 as fixed costs are spread over higher production ounces and the cost reduction measures implemented in 2015 take effect.

“There were two resource upgrades in the Year as a result, of which the total resource base 4 remained broadly unchanged, notwithstanding record production in 2015 in terms of tonnes mined.

“Following the upgrades, measured and indicated resources increased from 55 per cent of the total resource base to 64 per cent.”

Curtis said towards the end of the Year, new drilling machines were installed and commissioned as a result, of which the drilling rate achieved in January and February 2016 increased to over 2,000 meters per month compared to the average achieved in 2015 of approximately 700 meters per month.

“I expect that 2016 will be a Transformational Year for Caledonia as the benefits of restructuring and investment become apparent and I look forward to updating the market accordingly,” he said. FinX

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