By John Kachembere
New York Stock Exchange-listed resources firm Caledonia Mining Corporation (Caledonia) says it has intensified efforts to strengthen safety measures at its Zimbabwean unit, Blanket Mine, after four people died in fatal accidents in the last 18 months.
Steve Curtis, the Caledonia chief executive, said the fatal accidents were “not acceptable” hence the need for comprehensive measures.
“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 said last week.
“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,” he added.
Curtis noted that increased headcount at Blanket has brought in new — and mainly younger — workers who lack the experience and general safety awareness.
“After a comprehensive review, a wide-ranging re-training programme has commenced with the objectives of changing behaviour and reinforcing the need to adhere to prescribed safety procedures at all times,” he said.
He further indicated that introduction of long-hole stoping at Blanket Ore Body will minimise staff exposure to fall of ground incidents.
Curtis, however, said recent fatalities are despite the overall improvement in safety performance.
“Production of 12 657 ounces was marginally higher than the second quarter of 2017 and in line with our expectations for our 2018 guidance range of 55 000 – 59 000 ounces,” he said.
“Grade for the quarter was 3,19g/tonne, this is below target due to difficulties in accessing broken ground at AR South and higher than expected dilution at the Blanket ore body due to the introduction of long-hole stopping on the grounds of safety.
“Corrective measures to improve grade have been taken and it is expected that the grade and production tonnages will increase over future quarters, particularly in the fourth quarter of 2018.
“We experienced significant negative working capital movements during the quarter which had an adverse effect on operating cash flow with a net operating cash burn of $1,2 million during the quarter.
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.
Underlying cash flows remained robust — pre-tax operating cashflows 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.
“Capital investment for the quarter was in line with our capex plan for 2018 at $5,6 million, most of which was incurred at Central Shaft, which has now reached a depth of 1 106 metres.
“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,” Curtis said.
— The Financial Gazette