Caledonia Mining Corporation Plc (LON:CMCL) has seen a share price dip in trading today as it suffers from the underwhelming output and low gold prices.
The company have reduced their guidance following disappointing Q3 profits, with the adjusted figure through September dropping to $2.2 million for the three month period.
As part of this hit, output dropped 2.9% to 13,978 ounces for the quarter, and its output guidance for the year has subsequently been trimmed to 54,000-56,000, from 55,000-59,000 ounces.
Compounding their misfortune, cost per unit also rose by 5%, with an ounce of gold costing the company $670 – meanwhile, Caledonia’s gold-mining counterparts Fresnillo Plc (LON:FRES) and Greatland Gold (LON:GGP) have enjoyed shares and guidance upgrades.
“The third quarter of 2018 was an improvement on the second quarter of the year,” chief executive Steve Curtis said.
“We addressed some of the operating challenges which the business experienced in previous quarters; cost control remained good, and Caledonia stabilised its cash position and working capital movements”.
The firm’s Chief Executive was realistic about the disappointing results but stressed the need to take extra safety precautions and ensure the accuracy of future drilling. The company remain confident in the efficacy in the Blanket Mine in Zimbabwe.
“Grade for the quarter remained below expectations at 3.12 grams per tonne as we continued to experience some mining dilution due to the introduction of long-hole stopping in the narrower reef width areas due to safety considerations. Corrective measures have been taken to improve the accuracy of drilling which are expected to result in improved mined grades in the remainder of the last quarter of 2018 and thereafter. We remain confident that the underlying geological model for Blanket and the grade of the resource remains sound”.
Caledonia shares are currently trading down 2.22% or 10p at 440p (1001GMT).