Caledonia mining - “Cash costs at the Gold mine are running at around $600/oz, which positions the company well to keep generating cash to self-fund expansion and pay dividends to shareholders.
CAL has more than $25 million in cash in Western banks and NO DEBT --
Caledonia Mining sees earnings rise as cost-cutting drive accelerates
By Jamie Nimmo November 13 2013, 7:12am
The ‘all-in’ cost fell to US$999 an ounce in the third quarter from US$1,211 in the previous quarterThe ‘all-in’ cost fell to US$999 an ounce in the third quarter from US$1,211 in the previous quarter
Caledonia Mining Corporation (LON:CMCL, TSE:CAL) welcomed a rise in quarterly earnings as the total cost of producing gold at its 49%-owned Blanket mine in Zimbabwe dropped below US$1,000 an ounce.
The ‘all-in’ cost fell to US$999 an ounce in the third quarter from US$1,211 in the previous quarter, which, combined with gold sales of 12,042 ounces, up from 11,588 ounces in the second quarter, helped earnings climb from 5.8 cents a share to 7.2 cents.
The lower average gold price achieved in the period of US$1,330 an ounce, from US$1,368 in the prior three months, resulted in a reduction in the royalty component of the all-in cost per ounce.
The company produced more gold in the quarter thanks to a higher realised grade of 4.03 grams per tonne (g/t) compared with 3.82 g/t in the second quarter and a slightly better gold recovery of 93.6%.
Revenues were lower than last year at C$16.6mln, but a tighter operation meant a net profit of C$4.6mln against a loss of C$9.2mln the year before.
Caledonia insisted it is on track to produce around 44,000 ounces of gold in 2013.
The company ended September with C$23.9mln in cash, having finished the same period last year with C$22.8mln.
Stefan Hayden, Caledonia’s president and chief executive, said: “The third quarter of 2013 presented continued challenges due to the prevailing lower gold price. “In response to the lower gold price, Caledonia, working with Blanket management, has introduced measures to increase mine production from approximately 1,030 tonnes per day (tpd) in Q1 2013, to approximately 1,075 tpd in the second quarter and to 1,110 tpd in the third quarter.” He added: “As a low-cost producer with a robust balance sheet, Caledonia is well-positioned to continue to implement its growth strategy, notwithstanding the current volatility in the gold price.”
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