HomeBusiness DigestBlanket mine reports reduced profits

Blanket mine reports reduced profits

BLANKET Mine reported reduced profits in the quarter to June, after it paid out a US$1 million donation to the Gwanda Community Share Ownership Trust.

The mine, owned by Caledonia Mining Corp, saw net profit decline to US$5,49 million from US$7,11 million in the March quarter, but this was higher than last year’s US$2,87 million.
In a statement, the mine said the lower profit was owing to a US$1 million donation to the GCSO Trust in terms of the indigenisation agreements signed between the mine and government, and also to the increase in second quarter tax payments to the Zimbabwean Revenue Authority.

Gold production at the mine rose 26% in the second quarter to June, from March’s 11 560 ounces, with production in July contributing almost half of the quarterly output at 4708 ounces. The mine attributed the increase in gold production in the second quarter to the completion of scheduled maintenance on the winding portion of both compartments of No. 4 shaft which was completed in early May and progressively allowed an increase in the daily available hoisting time.

Production in the quarter was 41% higher than the comparable quarter a year ago. Average gold recovery increased to 93,9% compared to 93,2% in the preceding quarter. Cash operating costs decreased to US$547 per ounce of gold produced from US$648 in the preceding quarter and US$585 in the comparable quarter last year.

“The decrease in cash costs was due to the higher gold production and the non-recurrence of certain costs which temporarily increased the average cost per ounce in the preceding quarter.”

The average sale price of gold in the period was US$1 599, which was lower than the first quarter average of US$1 688, but slightly higher than last year’s US$1 512.

Gross profit was US$10,06 million, compared to US$8,99 million in the preceding quarter and US$5,59 million in the comparable quarter last year. During the quarter, Blanket made payments in respect of direct and indirect taxes, royalties, licence fees, levies and other payments to the government totalling US$7,89 million, compared to US$3,28 million in the preceding quarter and US$3,31 million in the comparable quarter last year.

The mine also made a US$1,8 million payment, to the National Indigenisation Economic Empowerment Fund as an advance dividend against the fund’s right to receive dividends declared by Blanket as part of the fund’s proposed shareholding in the mine.

Both the community donation and the payment to NIEEF were made in terms of the implementation of indigenisation plan for Blanket Mine.
The mine was one of the first companies to receive an indigenisation compliance certificate from government.

However, completion of the agreement is subject to pending approval by the RBZ for the transactions listed in the indegenisation MoU. There are also other underlying agreements and related transactions to give effect to the indigenisation plan. — Staff Writer.




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