Ore extraction hindered by IP implementation
As Caledonia Mining (CMCL) continues to implement its investment plan (IP), logistical issues governing ore handling volumes and access to higher-grade ore bodies have affected gold production during Q2 and H117. Underground works to ameliorate material handling bottlenecks have taken place with successful completion, inter alia an underground tramming loop. However, grades are lower due to restricted access to the higher-grade Eroica and Lima ore bodies situated on the other side of the Central Shaft development area to the main surface haulage route – the No. 4 haulage shaft. We have adjusted our valuation to reflect this and the H117 financial results, leading to a valuation of 933p for successful implementation and operation of the Blanket IP.Caledonia Mining Corporation is engaged in the acquisition, exploration and development of mineral properties for the exploitation of base and precious metals focused on Southern Africa. Co.'s primary asset is a 49% interest in the Blanket Mine in Zimbabwe which produced over 50,351 ounces of gold in 2016. Its segments include Corporate, Zimbabwe, and South Africa. The Corporate segment includes administrative functions within the group. The Zimbabwe segment comprise Caledonia Holdings Zimbabwe Ltd. and subsidiaries. The South Africa segment comprises a gold mine, that is on care and maintenance, as well as sales made by Caledonia Mining South Africa Proprietary Limited to the Blanket Mine.
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