CALEDONIA Mining Corporation says the commencement of the direct sale of gold produced from its flagship asset-Blanket Mine to a refiner outside Zimbabwe will make it easier for the company to arrange debt facilities with external funders.
The mining company commenced the direct sale of gold produced from Blanket to a refiner outside Zimbabwe in April last year.
Previously, all gold produced by Blanket mine had to be processed and sold to the government-owned refinery, Fidelity Printers Refinery.
“This development further demonstrates the pragmatic approach of the Zimbabwe authorities,” Caledonia chief executive, Mark Learmonth said in the company’s 2023 integrated report.
Learmonth highlighted that although administrative complexities in operating in Zimbabwe persist, Caledonia is confident in its operations there and believe in the country’s underexplored geological potential.
“Our focus remains in Zimbabwe. We see huge geological potential in the country and are very excited about the portfolio of attractive assets that we own,” he said.
He further noted that aided by the secondary listing of its securities on the Victoria Falls Stock Exchange in 2021, 22 percent of Caledonia is now held by shareholders in Zimbabwe.
“We have also been delighted with the amount of in-country support that we have received…We completed our second successful fundraising in Zimbabwe in April 2023, raising $5,8 million,” Learmonth said.
“Since February 2023 we have also issued bonds worth $9 million secured against the solar project revenue to institutional investors in Zimbabwe, and we will continue to see Zimbabwe as a key location of funding for our future projects.
In the financial year 2023, Caledonia saw a revenue of US$146 million, up three percent on the prior period with US$5,70 million attributable to the Bilboes Oxides project. Full year production for 2023 stood at 75 416 ounces.
As at December 31, 2023, the company had cash on hand of US$6,7 million and overdrafts and term loans of US$17,7 million.
Going forward, the company is on track to meet its production guidance of between 74 000 oz and 78 000 oz at Blanket in 2024, and are expecting a similar level in 2025.
“2024 has started well with operating and financial performance at Blanket in line with management expectations,” Learmonth said.
“We were pleased to have published a revised mineral resource and reserve statement for Blanket in May 2024, extending Blanket’s life-of-mine.”