Blanket Mine Reports 39% Increase in Gross Revenue

BY MTHANDAZO NYONI

GWANDA-based mining company Blanket Mine reported a 39% increase in gross revenues in the second quarter of this year compared to the same period last year after producing 13,499 ounces of gold.

In the first half of the year, 27,732 ounces were produced, compared to 24,660 ounces produced in the prior period. This was before the lockdown imposed by COVID-19.

Gross revenue was US $ 22.9 million, an increase of 39% over the previous period, while the gross margin increased 30% to US $ 9.2 million .

Earnings before interest, taxes, depreciation and amortization (excluding net foreign exchange gains) increased 35% to US $ 9.6 million.

Commenting on the results, Caledonia Managing Director Steve Curtis said management initiatives implemented last year continued into 2020 and resulted in a 12.4% increase in gold production over the course of of the first six months of 2020 compared to the same period last year.

“This improvement continues despite the challenges we faced in the wake of the COVID-19 pandemic: production during the initial three-week lockdown in early April was 7% below target, but was better than expected for the remainder of the quarter. ” he said.

Curtis said production for the quarter was only 1.2% below plan, while production for the first half of 2020 was 2.5% above plan.

“This trend continued in July, with July production also exceeding expectations. The resilience of Blanket’s operations during this difficult time is a testament to the exceptional commitment of the entire Blanket Mine team, ”said Curtis. “We therefore remain on track to achieve our 2020 production target of between 53,000 and 56,000 ounces of gold. ”

Caledonia ended the quarter with net cash and cash equivalents of US $ 11.7 million.

Curtis said the COVID-19 pandemic had no appreciable effect on Blanket production during the quarter.

He said, however, that work on the central well had been slower than expected as several members of the supervision team returned to South Africa when the lockdown began in late March.

“Due to persistent travel restrictions, it was not possible to replace these team members. Although the slower pace of works has not yet significantly delayed the project, the project requires specialized equipment and contractors to get to Blanket from South Africa, which is currently not possible under restrictions, ”he said.

Curtis said they were receiving a high level of support from the government of Zimbabwe to resolve these issues with the relevant authorities in South Africa.

“It is not possible to predict when travel and other restrictions will be lifted so that work on the project can resume as planned and it is likely that the schedule for commissioning the central well will be extended indefinitely,” did he declare. “This could affect the expected increase in production which is currently expected to be 75,000 ounces of gold in 2021 and 80,000 ounces of gold from 2022, but it is currently not possible to provide revised forecasts. . “