London-listed Caledonia Mining achieved gold production of 76 213 oz at its Blanket gold mine, in Zimbabwe, for the year ended December 31, which the company says met increased guidance and was nearly identical to output for the two prior years.

Production for the fourth quarter of 2025 was 17 367 oz, compared with 19 841 oz in the fourth quarter of 2024.

Caledonia explains that production in the second half of 2025 was adversely affected by lower tonnages from higher-grade areas – which is being addressed – and interruptions in the electricity supply at the end of the quarter.

Milling throughput remained robust, offsetting some grade pressure.

The company notes that guidance for Blanket gold production for financial year 2026 is between 72 000 oz and 76 500 oz, noting that quarterly production profile is expected to be stronger in the second half of the year as higher-grade areas increasingly come on stream.

Caledonia also set its on-mine cash cost guidance at between $1 500/oz and $1 700/oz sold.

All-in sustaining cost (AISC) is guided at between $2 100/oz and $2 300/oz sold.

The company notes that cost guidance for this year is higher than guidance for 2025 and actual costs incurred in the first nine months of 2025.

This is owing to inflationary pressures on consumables and labour; higher operating costs across mining, milling, engineering and administration; increased sustaining capital expenditure (capex) for infrastructure, equipment and safety; ongoing investment in business improvement, risk management and operational reliability; and enhanced maintenance and planned equipment replacement.

CAPEX

Caledonia says projected capex for this year mainly relates to sustaining capex at Blanket and the planned start of the Bilboes development project, in Zimbabwe.

Total group capex is projected to be $162.5-million, comprising sustaining capex of $26.6-million and $26.1-million for Blanket.

This comprises underground mine development of $7.7-million; engineering (equipment, power, water/sewerage) at $4-million; business improvement initiatives at $3-million; milling/processing upgrades at $2.3-million; risk management at $2.3-million; special project (mine housing development) of $2-million; mineral resource management (exploration, drilling) of $1.9-million; and other projects (in various departments) of $3.4-million.

The biggest portion of capex – $135.9-million – meanwhile, will go towards work at the Bilboes project ($132-million), subject to Caledonia board approval and funding, and exploration at the Motapa project ($3.8-million).

The company says the capex plan continues to prioritise operational reliability, safety and long-term value, with significant allocations for both sustaining and growth projects, ensuring Blanket remains well-positioned for consistent production and future growth.

Additionally, Caledonia notes that funding initiatives in respect of the capital requirements for the Bilboes project are well progressed.

The company points out that sustaining capex may increase by about $11-million to implement a long-term solution to the recurring power interruptions and poor power quality which Blanket has experienced over several years.

It explains that these factors have resulted in interruptions to production and elevated operating costs owing to the requirement to use stand-by diesel generators to supplement shortfalls in power provided by the grid and the existing solar facility.

This further capex is subject to finalisation of technical studies and financial evaluations and will be subject to approval by Caledonia's board.

Caledonia says cost guidance for financial year 2026 reflects higher direct operating costs at Blanket compared with the first nine months of 2025, primarily owing to inflation and increased costs in the departments of mining, where higher headcount and increased underground development have raised costs; milling and processing department, which faces higher consumable prices and additional maintenance; and engineering department, which is investing in equipment upgrades and infrastructure reliability.

General and administrative expenses have increased, driven by inflation-related salary adjustments and rising compliance requirements.

At the same time, the group continues to invest strategically in mineral resource management, safety initiatives and risk management programmes to support ongoing exploration, enhance operational safety and strengthen long-term mine planning.

The capex plan continues to prioritise operational reliability, safety and long-term value, with significant allocations for both sustaining and growth projects, ensuring Blanket remains well-positioned for consistent production and future growth.

"We are pleased to report that Blanket has once again delivered production in line with guidance, demonstrating the resilience and operational excellence of our team. The 2026 production guidance of 72 000 oz to 76 500 oz reflects the increased consistency we are focussed on from Blanket.

“Our 2026 budget reflects our commitment to sustained investment in both our core operations and future growth.

“The planned capex will support ongoing production at Blanket and advance the development of the Bilboes project and exploration at Motapa, where we see long-term, value-enhancing synergies with Bilboes.

“We remain focused on investing in safety and delivering long-term value for all our stakeholders,” says CEO Mark Learmonth.

Meanwhile, in a separate statement to shareholders, Caledonia has announced that its COO James Mufara has left the company.

“The company confirms that its operations continue to be managed by the existing executive and operating team, and the operations and strategy remain unchanged. The company does not currently intend to appoint another COO,” the company says.