Caledonia Mining Corporation Record gold production from the Blanket Gold Mine


Caledonia Mining Corporation Plc COM SHS NPV (DI) (LON:CMCL) announced today record quarterly and annual gold production from its 49 per cent owned subsidiary, the Blanket Gold Mine (“Blanket”) in Zimbabwe, for the quarter and year ended 31 December, 2016. All production numbers are expressed on a 100 per cent basis and are subject to adjustment following final assay at the refiners. Production includes work-in-progress of approximately 754 ounces as at 31 December 2016.

· Approximately 13,591 ounces of gold were produced during Q4 2016, a new quarterly production record representing an 18 per cent increase on the gold produced in Q4 2015 (11,515 ounces) and a 1.2 per cent increase on the gold produced in Q3 2016 (13,428 ounces).

· Total 2016 gold production was approximately 50,351 ounces, a new annual production record representing a 17.6 per cent increase over the annual gold production in 2015 of 42,804 ounces.

· The increase in production in 2016 was largely due to the start of production from below 750 meters, improvements in underground infrastructure and the commissioning of the new ball mill, in line with the Investment Plan at Blanket.

Target gold production for 2017 is approximately 60,000 ounces at an estimated on-mine cost* in the range of $600 to $630 per ounce and an All-in Sustaining Cost* in the range of $810 to $850 per ounce. Blanket remains on-track to increase annual production to approximately 80,000 ounces of gold by 2021.

Chief Executive Officer for Caledonia Mining Corporation Plc COM SHS NPV (DI), Steve Curtis, said, “2016 was a significant year for Caledonia as the continued investment at Blanket begins to bear fruit. Gold production in 2016 of 50,351 ounces surpassed the previous record from underground operations of 45,530 ounces, which was achieved in 2013. The record level of production was due to the commencement of production below 750 meters following the successful completion of the No. 6 Winze and other infrastructure projects; improved underground infrastructure and the installation of the new ball mill late in 2016.

As well as achieving this record gold production level, the sinking of the new central shaft continued according to plan and reached a depth of 534 m by year end.

We look forward to a further improvement in 2017 as we target 60,000 ounces of production from Blanket, being a 20 per cent increase on the production achieved in 2016. We continue our progress towards annual production of 80,000 ounces by 2021.

As we increase production we expect earnings will continue to benefit from the increased sales volumes and from a lower average cost per ounce as fixed production costs and overheads are spread across higher production. This improvement makes us confident of achieving a significant improvement in earnings for 2017. Caledonia expects to publish its results for the year to December 31, 2016 on March 21, 2017.”

*”On-mine cost” and “All-in Sustaining Cost” are non-IFRS measures. Please see “Non-IFRS Measures” in the Q3 MD&A for an explanation of how these measures are reconciled to IFRS measures.

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