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2018 Production Update & 2019 Production Guidance
RNS Number : 9380M
Caledonia Mining Corporation PLC
14 January 2019 Caledonia Mining Corporation Plc
2018 Production Update and 2019 Production Guidance
(NYSE AMERICAN: CMCL; AIM: CMCL; TSX: CAL)
St Helier, January 14, 2019 -
Caledonia Mining Corporation Plc ("Caledonia" or the "Company")
announces gold production from the Blanket Mine ("Blanket") in Zimbabwe
for the quarter and year ended December 31, 2018.
All production numbers are expressed on a 100 per cent basis and are
based on mine production data and are therefore subject to adjustment
following final assay at the refiners.
Approximately 14,952 ounces of gold were produced during the quarter
ended December 31, 2018 (the "Quarter"), 7 per cent higher than the
previous quarter ("Q3 2018"). Total gold production for the year to December 31, 2018 was
approximately 54,512 ounces, which is in line with 2018 production
guidance which was a range of 54,000 to 56,000 ounces.
Caledonia advises investors that gold production for 2019 is expected to
be between 53,000 and 56,000 ounces.
Caledonia remains on track to achieve production of approximately 80,000
ounces of gold per annum from 2021 following completion of the Central
The Central Shaft is currently at a depth of 1,150 meters and will be
sunk to a depth of 1,204 meters.
It is anticipated that shaft sinking will be completed towards the
middle of 2019 after which the shaft will be equipped and commissioned.
Following an increase in exploration activity at Blanket, since early
2015 Caledonia has announced 7 successive increases in the resource
base as a result of which Blanket's life of mine has been extended from
6 years as at the end of 2014, to 14 years as at the end of 2018.
Exploration continues at Blanket with the objective of further
extending Blanket's life of mine.
Caledonia also advises that it has entered into gold price hedging
contracts for the 5 months from February 2019 until June 2019 for
22,500 ounces of production through the purchase of put options with a
strike price of $1,250 per ounce.
The hedge will ensure that Caledonia receive a minimum price of
$1,250 per ounce of gold for the duration of the contracts whilst
maintaining full upside participation.
Caledonia expects to release its results for the year to December 31,
2018 on or about March 20, 2019.
Commenting on the announcement, Steve Curtis, Chief Executive Officer, said:
"We are pleased to see consistent production performance from Blanket in
the fourth quarter of 2018 to deliver 14,952 ounces for the quarter and
54,512 ounces for the full year.
Until the Central Shaft has been commissioned in 2021, production from
Blanket is expected to remain at broadly the same level as we achieved
in 2017 and 2018.
We therefore expect to produce between 53,000 and 56,000 ounces in 2019.
Blanket finished 2018 with adequate mining and development
infrastructure in place to deliver on this target and we have made a
good start to 2019.
"Completion of the Central Shaft is the key to Blanket achieving its
planned production of approximately 80,000 ounces of gold per annum
from 2021 onwards.
I expect that sinking work at Central Shaft will be completed by mid- year after which we will start to equip the shaft.
"This part of the Central Shaft project is relatively capital intensive.
In light of our significant capital expenditure commitments, we believe
it is prudent to take advantage of the recent strengthening of the gold
price and we have therefore secured a minimum received gold price of
$1,250 per ounce for the 5 months to June 2019 whilst maintaining full
upside exposure to the gold price through a cost-effective option
The Central Shaft project is in the final 18 months of construction;
we expect capital investment on this project to be lower in the second
half of 2019 and to reduce further in 2020 as it nears completion.
Caledonia will continue to monitor the gold price in conjunction with
our projected cash position and review our hedging strategy as
For further information please contact:
Caledonia Mining Corporation Plc
Tel: +44 1534 679 800
Tel: +44 759 078 1139
Adrian Hadden/Jessica Cave/
Tel: +44 20 7220 1751
Tim Blythe/Camilla Horsfall/Megan Ray
Tel: +44 207 138 3204
Note: This announcement contains inside information which is disclosed
in accordance with the Market Abuse Regulation (EU) No. 596/2014.
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