LONDON (ShareCast) - (ShareCast News) - Caledonia Mining Corporation announced record quarterly and annual gold production from its 49% owned subsidiary, the Blanket Gold Mine in Zimbabwe on Wednesday, for the quarter and year ended 31 December.
The AIM-traded company said approximately 13,591 ounces of gold were produced during Q4 2016, a new quarterly production record representing an 18% increase on the gold produced in Q4 2015 and a 1.2 per cent increase on the gold produced in Q3 2016.

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

The company said 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.

Caledonia said Blanket remains on-track to increase annual production to approximately 80,000 ounces of gold by 2021.

"2016 was a significant year for Caledonia as the continued investment at Blanket begins to bear fruit," said chief executive Steve Curtis.

"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."

Curtis said that, as well as achieving that 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 the company increases production it expects 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," Curtis said.

"Caledonia expects to publish its results for the year to December 31, 2016 on March 21, 2017."

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