Caledonia Mining Corporation (AIM:CMCL, NYSE-A:CMCL) encountered a rocky start to 2023, primarily due to poor production in the first half at its core asset, the Blanket Mine in Zimbabwe, and an underperformance in a small-scale oxide project. However, the latter half of the year saw a substantial improvement in Blanket’s production.
The company also grappled with increased costs, notably in labor and electricity, along with one-off administrative expenses. To mitigate labor costs, Caledonia initiated more efficient timing systems for workforce management, particularly for their new, larger, and lighter shaft operations. For electricity, the company plans to reduce consumption and has already made strides by substituting diesel usage with a solar project.
Despite these challenges, Caledonia’s improving cash flows allowed the company to maintain its quarterly dividend at 14 cents. Mark Learmonth, Caledonia’s chief executive, told Proactive that the underground exploration program at Blanket, which resumed last January, showed promising drill results that led to extending the mine’s life considerably, from 2034 to 2041.
Learmonth added that this extension will be further supported by an upcoming new resource statement. Moreover, Caledonia is progressing with an updated feasibility study on the Bilboes sulphide project, aiming to publish it in the coming months.
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