WORKPLACE accidents continue to dent the safety reputation of Gwanda-based Blanket Mine after two workers died on duty during the first and second quarter of 2018.
Parent company, Caledonia Mining Corporation’s chief executive Mr Steve Curtis admitted the need to beef up safety performance at one of the largest gold producers in the country. Caledonia owns 49 percent shares at the giant mine.
“Unfortunately, 2018 has been a time of disappointing safety performance for our business with two fatal accidents at Blanket, one in the first quarter and a second accident on the 12th of July 2018 after the second quarter’s close,” he commented in a financial report for the second quarter ended 30 June 2018.
“My fellow directors and I express our sincere condolences to the family and friends of the deceased. The company has embarked upon renewed efforts in the business to improve our safety performance.”
Mr Curtis said the group remains focused on ensuring the underlying health of the business and the long-term potential of the Blanket mine ore bodies. In that regard, he said, the group expects that production in the second half of 2018 at Blanket Mine will increase.
“The negative movements in working capital in the second quarter will normalise in the third and fourth quarters of 2018,” he added.
Meanwhile, Caledonia suffered negative working capital movements in the second quarter, which adversely affected operating cash flow.
“This, combined with capital investment of $5,6 million during the quarter, had a negative impact on the balance sheet with a net cash balance of $5,3 million at the end of the quarter,” said the group. “Underlying cash flows remained robust. Pre-tax operating cash flows in the quarter before working capital movements were $6,3 million, compared to $7 million in the first quarter of 2018 and $4,9 million in the second quarter of 2017.”
The AIM listed company also recorded adjusted earnings per share (EPS) of 35, 2 percent, which are 86 percent higher than the corresponding amount recorded during the same period last year.
The company largely attributed the increase to increased credit incentive and higher deferred tax adjustments.
Mr Curtis said the second quarter was difficult for business as production was adversely affected by lower than expected grade and tonnes mined. He said corrective measures to improve grade have been taken and expected that the grade and production tonnages will increase over future quarters, particularly in the fourth quarter of 2018.
Despite the lower grade and tonnage for the quarter, Mr Curtis said he was happy with the level of cost control and in the business and remains confident in the longer- term cost guidance target of $700-$800 per ounce as the business grows towards 80 000 ounces per year by 2021.
Mr Curtis also said quarterly capital investment was in line with the 2018 capital expenditure plan at $5,6 million, most of which was incurred at Central Shaft.
“We expect Capex to decline substantially after 2019 after we commission the Central Shaft as planned in 2020. The Central Shaft project is the key enabler of longer term value for our shareholders as we progress towards our production and cost targets by 2021,” said Mr Curtis.
Compared to the same period last year, the company also recorded a substantially higher profit of $2, 6 million largely boosted by the increase in the export credit incentive.