Net profit rose 195.4% year-on-year to $9.3 million, though adjusted earnings per share fell 43.6% yoy to 23c.

But gross profit was down to $4.3 million on lower gold production and higher costs. Caledonia said previously gold production from the Blanket gold mine in Zimbabwe was below target, with 11,948 ounces produced during the March quarter, down 7.6% on the year, due to lower grade. It said this was part of the mine plan.

The on-mine cost for the quarter was $794 per ounce and all-in sustaining costs were $943/oz, which were up 15.6% and 13.3%, respectively.

The average realised gold price for the quarter was $1,284/oz, 2.1% lower than the January-March 2018 period.

Caledonia had net cash and cash equivalents of $9.7 million at the end of March, 27.2% lower than a year ago, with cash from operating activities down 10.9% to $6.3 million.

CEO Steve Curtis said cash generation had been solid, despite production difficulties, due to lower than expected production tonnage, unreliable electricity supply and lower mine grade, and was sufficient to support capital investment in the Central Shaft project of $5.1 million and the company's regular quarterly dividend.

"Work on sinking the Central Shaft remains on track," Curtis said.

"I expect shaft sinking to be completed in the middle of this year after which a further 12 months will be needed to equip the shaft before it is commissioned in mid-2020 and we can begin to increase production to our target of 80,000oz per annum by 2022.

"This production increase will contribute significantly to reducing operating costs through economies of scale and we look forward to further increasing cash flows and earnings as the shaft is commissioned."

Curtis said performance had improved, with production in April "almost exactly as planned", with further improvements expected for the remainder of the year.

Shares in Caledonia (TSX:CAL) were up 1.54% Tuesday to C$7.93, relatively range-bound from C$7.49/share at the start of the year.