New York Stock Exchange-listed resources firm, Caledonia Mining Corporation, has ditched its targeted gold mining project at Glen Hume in the Gweru District, Midlands Province, following poor exploration results, Business Times can report.
In December last year, Caledonia Mining Corporation announced that it had secured exclusive rights to explore and acquire the mining claims at Glen Hume and Connemara North areas.
But, after carrying out exploration seeking to find gold deposits worth mining, Caledonia found out the yellow metal prospects in the area were poor, meaning gold could not be commercially extracted in the area.
Consequently, Caledonia has since ditched the Glen Hume project.
The mining company said it is now targeting exploration at Connemara North, in the Gweru district.
“Further to the Company’s announcement on December 11, 2020, that it had acquired an option over the Glen Hume property, Caledonia has decided not to exercise this option over the Glen Hume property due to disappointing exploration results,” said Caledonia’s CE Steve Curtis.
“Caledonia will conduct exploration at Connemara north, the other optioned property in Zimbabwe as announced on December 17, 2020. Caledonia will consider further investment opportunities in Zimbabwe and elsewhere.”
Caledonia Mining Corporation, which operates Blanket Mine in Gwanda, Matabeleland South Province, is scouting for more gold assets in Zimbabwe.
In its financial results, Blanket reported a 31% increase in revenues to US$30m in the second quarter to June 30, 2021, from US$22.9m achieved in the prior comparative period.
EBITDA increased 103% to US$14m in the period under review from US$6.9m achieved in the same period in 2020.
Blanket produced 16,710 ounces of gold in the reviewed period from 13,499 ounces produced in Q2 2020, reflecting a 24% increase.
Over 165,000 tonnes of ore were mined and milled in the quarter under review, which is a new production record for any quarter and reflects the contribution of the Central Shaft which was commissioned at the end of March 2021, and the build-up towards the target of 80,000 ounces per annum from 2022 onwards, Curtis said.
“Higher production, lower costs and a higher gold price resulted in a significant increase in the underlying profitability of our business with gross profit increasing by 51% compared to the comparable quarter in 2020. Net profit was adversely affected by the impairment of the Glen Hume exploration asset following the board’s decision not to proceed further with this project because the property does not meet Caledonia’s strategic requirements in terms of size, grade, and width,” Curtis said.
He added: “Our immediate strategic focus continues to be to increase production to 80,000 ounces in 2022 while undertaking further exploration and development with the objective of extending the life of mine beyond 2034 thereby safeguarding and enhancing Blanket’s long-term future.
Caledonia will also evaluate further investment opportunities in Zimbabwe and elsewhere, Curtis said.