The Chronicle
Nqobile Bhebhe, Senior Business Reporter
CALEDONIA Mining Corporation, which owns Blanket Mine, a gold operation in Gwanda, has ramped up a 40 percent increase in quarterly production to 18,515 ounces in the first quarter up from 13,197 ounces produced in the corresponding period last year.
This is a new first quarter production record, the mining house said today (Tuesday).
“I am delighted that during this quarter we have set a new first quarter production record. 18,515 ounces is ahead of our expectations and reflects the increased capacity at Central Shaft,” Mr Steve Curtis, chief executive officer, said.
“The ramp-up in production towards our quarterly target of 20,000 ounces means that we are on track to meet our annual production target.”
The mining firm said this year’s gold production is expected to be between 73,000 to 80,000 ounces.
In February, the resource group announced it has entered into a “cap and collar” hedge contract with an undisclosed financial counterpart over 20 000 ounces of gold produced over a five-month period.
A hedge arrangement is a financial instrument in this case between Caledonia and its unnamed financial counterpart.
It is entered into to offset financial risk as the mining group believes that the hedge provides greater certainty to its cash flows during the period of the arrangement.
The hedging contract has a cap of US$1,940 and a collar of US$1,825.
This means that, for the 4 000 ounces of gold per month for the five-month period, Caledonia would receive an effective gold price per ounce of not less than US$1,825 or greater than US$1,940 and will receive an effective spot gold price between these two levels.
Article Source: The Chronicle