The Zimbabwe-based miner is undertaking a major expansion of the Blanket gold mine and disruption and costs associated with this meant net profits declined to US$543,000 (US$1.26mln).
Gold production increased to 8% to 10,822 ounces while both cash and all-in-sustaining costs declined.
Steve Curtis, chief executive, said the financial and operating results were better than expected due to the better output, good cost control and gold price.
He added good progress was being made on the development work.
"A huge amount has been achieved at the Central Shaft since work commenced in late 2014; in the first quarter of 2016 the main sinking headgear was assembled; the winders have been commissioned and sinking is expected to re-commence within a few days.
“Completion of the Central Shaft remains on track for mid-2018 and will re-establish Blanket's position as a low cost operation with excellent prospects to extend the existing mine life.
Production this year is expected to be around approximately 17% higher at 50,000 ounces.
"The projected increase in production in 2016 is expected to result in improved cash generation due to higher sales volumes and lower costs per ounce of gold as fixed costs are spread over more gold ounces produced.”
Net cash was US$8.8mln at the end of March and should start to rise in the second half of the year as Blanket resumes dividend payments said Curtis.