Gold price up over 1%, closing in on new record
Bullion is now 18% higher for the year, boosted by anticipation of Fed loosening as well as significant buying by central banks.
Caledonia Mining posted a solid set of financial results today, reflecting increased production at its Blanket Gold Mine in Zimbabwe.
The Toronto-based company nearly doubled its revenue, from $11.5 million in 2009 to $22.4 million last year, giving a profit of $8.3 million and net income of $2.257 million. It had $1.1 million in cash at the end of 2010.
Caledonia attributed the revenue spike to higher gold production from the Blanket Mine. Production doubled from 3,100 ounces in Q1 2010 to 6,228 ounces in the last quarter of the year — due mainly to the expansion of a mine shaft.
Higher gold prices and lower cash costs were also factors. Caledonia realized an average gold price of US$1,273 per ounce compared to $1,099 in 2010, with the price jumping to $1,384 in Q4. Cash costs for the year were US$751per ounce, similar to 2009, but dropped dramatically in Q4 compared to the same period in 2009, because fixed costs were spread over higher production, according to Caledonia.
CEO Stefan Hayden said the $546 cash cost achieved in the last quarter is more representative of what the mine expects to achieve at the higher production level. He said underground exploration work currently underway is expected to be completed in the second quarter.
