CALEDONIA Mining Corporation (Caledonia) says a nationwide lockdown of South Africa — its major raw materials supplier — due to COVID-19, will not disrupt its gold production at Blanket Mine after it increased the levels of consumable stocks in recent weeks.
BY MTHANDAZO NYONI
The New York Stock Exchange-listed mining concern also said it would enter this unprecedented situation with a strong balance sheet with cash on hand as at March 25, 2020 of approximately US$12,5 million.
The South African authorities announced a 21-day national lockdown effective from March 26, 2020 until April 16, 2020 as part of efforts to inhibit the spread of COVID-19 infections.
The southern African nation has recorded more than 1 000 infections, including two deaths.
Caledonia said although the lockdown was expected to have knock-on effects due to disruption of the supply chain, it was confident that Blanket will manage the effects of the lockdown without interruption to its gold production.
“In anticipation of supply chain disruptions arising from COVID-19, Caledonia has increased the levels of consumable stocks at Blanket in recent weeks,” it said in a statement last week.
“Caledonia estimates that Blanket has adequate critical spares and mining consumables in its inventory to sustain uninterrupted gold production well past the expected duration of the supply interruption including allowing for a period of supply chain and inventory restocking after the end of the South African lockdown on 16th April,” it said.
Accordingly, Caledonia said management does not expect that Blanket will be forced to suspend gold production as a result of the disruption in the South African supply chain.
“In the event of either a similar lockdown procedure being enacted in Zimbabwe, or an outbreak of COVID-19 infections at Blanket affecting a significant number of employees and necessitating a mine shutdown, Caledonia would enter this unprecedented situation with a strong balance sheet with cash on hand at March 25, 2020 of approximately US$12,5 million,” the gold miner said.
Commenting on the matter, Caledonia chief executive officer Steve Curtis said their first priority remained the safety and health of employees and their families.
He said management had taken active measures to help minimise the risk of infection and to safeguard the continuity of day-to-day business operations.
These plans are reviewed and, if necessary, updated daily in response to this highly fluid situation.
“We approach this challenge with a strong balance sheet, adequate inventory levels and a healthy workforce.
Caledonia, our employees and indeed the people of Zimbabwe have successfully overcome great challenges in their recent past. I have full confidence that we will deal with this current challenge in a similar manner,” he said.
Caledonia is an exploration, development and mining corporation focused on Zimbabwe.