Update: Short-term pain for long-term gain
During H114 Caledonia has met with some challenging headwinds, with Blanket experiencing lower grade ore (partially offset by improved gold recoveries at the plant) and higher than anticipated tax, regulatory fees and G&A, all set against a continuing low gold price environment. All this should be measured against Caledonia maintaining its position as one of the very lowest cost all-in (Q214: US$977/oz) gold producers in Africa and one that yields 5.5%. The company is looking to add flexibility to its Blanket operations, which may defer short-term increases in production and likely increase capex, but in the longer term should provide an operation that is much more resilient to negative macro and on-mine operational factors.
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