Caledonia Mining cuts production guidance, blames operational difficulties
StockMarketWire.com - Caledonia Mining downgraded its guidance on annual production blaming operational difficulties relating to grade and unreliable power.
Due to operational difficulties relating to grade and unreliable power, production guidance for 2019 was cut to a range of 50,000 to 53,000 ounces from from a range of 53,000 to 56,000 ounces previously, the company said.
'The electricity situation worsened considerably in July and early August and Blanket experienced frequent and long interruptions to its power supply,' the company added.
The company set to address its power issues, saying it was at an advanced stage of evaluating a solar PV generating facility which would reduce Blanket's dependence on grid power.
The dour production guidance comes as the company reported an uptick in operating profit.
For the second quarter of 2019,operating profit, before foreign exchange gains, was just over $6m, 21% higher than the comparable quarter.
Gold production in the quarter was 12,712 ounces, an increase of 6.4% on gold produced in the first quarter of 2019 of 11,948 ounces taking production for the first six months of 2019 to 24,660 ounces.
But output in the quarter was below plan, the company said, amid a lower-than-expected grade as problems with mining dilution adversely affected the grade and mine production continued to be disrupted due to the instability of the incoming power supply.
At 9:05am: (LON:CMCL) Caledonia Mining Corp share price was -10p at 460p
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