By: OrePulse

Caledonia Mining Corporation has cut its 2026 gold production guidance for the Blanket mine in Zimbabwe after third-quarter output came in below expectations, and raised its cost forecasts for the year. The revised guidance was issued as part of the company's operational update for the third quarter of 2026.

The company now expects full-year gold production of between 69,000 and 72,500 ounces, down from its previous guidance of 72,000 to 76,500 ounces.

Third-quarter output fell to 17,030 ounces, compared with 19,106 ounces in the same period of 2025, a decline of about 11 percent year on year. Production for the first nine months of 2026 totaled 49,158 ounces, down from 58,846 ounces in the first nine months of 2025, a drop of about 16 percent.

Caledonia Mining CEO Mark Learmonth said third-quarter production "was below our expectations, principally owing to insufficient compressed air capacity in deeper, higher-grade mining areas and the temporary retention of gold within the processing circuit." The company said it is commissioning additional compressors to address the shortage of compressed-air capacity in deeper mining areas.

Learmonth said: "We expect production in the fourth quarter to benefit from improved access to higher-grade mining areas, the recovery from mid-October of about 1,100 oz of gold retained within the metallurgical plant and the processing at Lima of additional ore arising from the seven-day shift system." The revised full-year guidance implies fourth-quarter output of about 19,800 to 23,300 ounces, an increase from the 17,030 ounces produced in the third quarter.

Caledonia also raised its cost guidance for the year. On-mine cost guidance increased to between $1,700 and $1,900 per ounce sold, up from $1,600 to $1,800 per ounce sold previously. All-in sustaining cost guidance rose to between $2,650 and $2,850 per ounce sold, from $2,500 to $2,700 per ounce sold previously.

The company cut its 2026 group capital expenditure guidance to $94.3 million, from $103.3 million previously. Caledonia said the reduction mainly reflects the deferral of part of a 132 kilovolt power line project to 2027, and does not represent a material cut to the overall scope of its planned capital projects.

The revised capital expenditure guidance includes $44 million of sustaining capital at the Blanket mine, $3.5 million of growth capital at Blanket, $43 million of growth capital at the Bilboes project, and $3.8 million of exploration spending at the Motapa project. The reduced capital budget keeps spending focused on sustaining operations at Blanket while continuing development work at Bilboes and exploration at Motapa.

Learmonth said Blanket "remains a robust and cash-generative operation." He added that the company remains focused on delivering a stronger performance in the fourth quarter and on implementing the operational improvements required to support production and cash generation in 2027.