Caledonia’s Blanket mine to meet full-year guidance, despite first-quarter challenges

The company attributes the quarter-on-quarter decrease in output to mining sequence changes and constraints in accessing higher-grade, higher-volume areas.

Production during the quarter was also impacted on by equipment availability issues and challenging ground conditions.

Additionally, the company says a new mine shift system is being implemented, which will increase mine production from six to seven days a week.

Caledonia also appointed a contractor to accelerate access to higher-grade ore sources.

Nevertheless, the gold miner says it remains comfortable with Blanket’s full-year production guidance of 72000 oz to 76500 oz, with the mine’s gold production expected to be weighted towards the second half of this year.

Caledonia CEO Mark Learmonth explains that gold production in the first quarter of the year was below the company’s expectations, reflecting the lower grades mined during the quarter.

He notes, however, that this is consistent with the company’s guidance of production being weighted towards the second half of the year.

“Pleasingly, plant performance remained strong, with 202217 t milled and good operational availability across the processing circuit. This is an important reflection of our continued investment into the future of the processing facility,” he says.

Learmonth adds that the quarter also included several typical operating challenges associated with deep, mature mining assets, including sequencing considerations, equipment downtime and difficult ground conditions in certain areas.

These factors temporarily constrained access to some planned ore sources.

“We are actively addressing these challenges through several practical measures, including the acceleration of mine development, supported by the appointment of a contractor, to improve access to planned ore sources,” he says.

Importantly, he notes that the company will be introducing a revised shift system later in the year, moving the operation to a seven-day working week – up from six – which he says the company expects will both reduce worker fatigue and support increased ore production.

Moreover, he says that, alongside these mining initiatives, Caledonia is progressing further plant improvements, including an increase in milling capacity following the commissioning of an additional ball mill.

Taken together, Learmonth says these actions are expected to support a stronger production profile in the second half of the year and into 2027.

“The challenges experienced in the first quarter do not reflect the underlying quality of the orebody or the long-term fundamentals of the operation.

“Blanket remains a resilient, cash-generative asset, supported by a capable and committed workforce and a processing plant that continues to perform reliably and where we are growing capacity.

“Management’s focus is on stabilising mining areas, improving equipment availability and restoring access to planned ore sources as we progress through the year.”