TIDMCMCL
RNS Number : 0283D
Caledonia Mining Corporation
10 May 2012
Caledonia Mining First Quarter 2012 Operating and Financial
Results
Toronto, Ontario - May 10, 2012: Caledonia Mining Corporation
(the "Company") (TSX: CAL, OTCQX: CALVF, AIM: CMCL) is pleased to
announce its operating and financial results for the first quarter
2012 ("Q1" or the "Quarter"), which are reported below in Canadian
dollars unless otherwise indicated.
Operational Highlights for the Blanket Gold Mine, Zimbabwe
-- Gold produced in Q1 was 9,164oz, 13% lower than the 10,533oz
produced in the quarter ended December 31, 2011 (the "preceding
quarter") and 25% higher than the 7,322oz produced in Q1 of 2011
(the "comparable quarter").
-- The lower gold production in Q1 was due to scheduled
maintenance on the No. 4 Shaft as guided in the MD&A for the
preceding quarter.
o This shaft maintenance work was completed at the end of April 2012.
-- Gold production in April 2012 was 3,722oz, equivalent to an
annualised rate of 44,664oz and 12% higher than the targeted
monthly production rate of approximately 3,300oz.
-- Average gold recovery in the Quarter was 93.2%, compared with 93.4% in the preceding quarter.
-- Blanket's cash operating costs in the Quarter increased to
US$648 per ounce of gold produced from US$521 in the preceding
quarter. The increase in cash costs was due to certain anticipated
non-recurring costs and the lower gold production during the
Quarter. The cash operating cost per ounce of gold produced in the
Quarter was unchanged from the cash operating cost per ounce of
gold achieved in the comparable quarter.
Financial Highlights
-- The average sales price per ounce of gold in the Quarter was
US$1,688 compared to $1,681 in the preceding quarter and US$1,397
in the comparable quarter.
-- Gross Profit was $8,996,000 compared to $9,012,000 in the
preceding quarter and $5,248,000 in the comparable quarter.
-- Net profit after tax for the Quarter was $7,111,000 compared
to $1,369,000 in the preceding quarter (which included an
impairment of $3,884,000) and $1,894,000 in the comparable
quarter.
-- Basic earnings per share for the Quarter were 1.4 cents per
share, compared to 0.27 cents in the preceding quarter and 0.38
cents in the comparable quarter.
-- At March 31, 2012 the Corporation had cash and cash
equivalents of $16,288,000 compared to $9,686,000 at December 31,
2011 and $2,217,000 at March 31, 2011.
-- Cash flow from operations in the Quarter before capital
investment was $8,130,000 compared to $3,506,000 in the preceding
quarter and $4,686,000 in the comparable quarter.
-- During the Quarter Blanket made payments in respect of direct
and indirect taxes, royalties, licence fees, levies and other
payments to the Government of Zimbabwe totalling US$3,282,000
compared to US$5,024,000 in the preceding quarter and US$1,442,000
in the comparative quarter.
Additional Highlights
-- Caledonia and Blanket have commenced implementation of the
Memorandum of Understanding ("MoU") which was signed with the
Government of Zimbabwe in February 2012.
o The first of four transactions for the sale of 15% of Blanket
to a consortium of Indigenous Zimbabweans, for a consideration of
US$11.0 million, has been signed.
-- Phase 1 of the 2012 exploration programme at the Nama base
metals project in Zambia to identify an upward extension of the
mineralised zone is progressing.
o 6 holes totalling approximately 2,400 meters of diamond
drilling are planned for the Konkola East target area. Two holes
have been completed (awaiting assay results); the third hole is in
progress.
Indigenisation at the Blanket Mine
Caledonia and Blanket have proceeded to implement the MoU, which
is acknowledged by the signatories as being a binding agreement,
pursuant to which Indigenous Zimbabweans will acquire an effective
51% ownership of the Blanket Mine for a paid transactional value of
US$30.09 millionon the following basis:
i. 15% will be sold to Indigenous Zimbabweans;
ii. 10% will be sold to The Blanket Mine Employee Trust for the
benefit of the present and future managers and employees of
Blanket;
iii. 16% will be sold to the National Indigenisation and Economic Empowerment Fund; and
iv. 10% will be donated to the Gwanda Community Share Ownership
Trust. Caledonia will also make a non-refundable donation of US$1.0
million to the Trust as soon as it has been established.
The first transaction for the sale of 15% of Blanket to Flemiro
Investments, a Zimbabwean-registered investment company, which has
been incorporated to represent a diverse group of Indigenous
Zimbabweans, for a consideration of US$11.008 million has been
signed (the "Agreement"). Caledonia will facilitate the vendor
funding of this transaction which will be repaid by way of future
dividends from Blanket. Outstanding balances on the facilitation
loans in terms of the Agreement will attract interest at a rate of
10% over the 12-month LIBOR. The timing for the repayment of the
facilitation loans will depend on the future financial performance
of the Blanket Mine. Caledonia expects to redeploy the sale
consideration in its projects.
Completion of the Agreement is subject to several conditions
precedent which include certain approvals from the Reserve Bank of
Zimbabwe and Caledonia receiving confirmation from the Government
of Zimbabwe that full implementation of the terms of the MoU
constitutes compliance by Blanket and Caledonia with the
requirements of the Indigenisation Act.
Documentation for the formation of The Blanket Mine Employee
Trust and the subsequent sale of a 10% interest in Blanket mine to
the Trust has been finalised and this transaction is expected to be
concluded shortly.
Caledonia has submitted agreements to the parties concerned
regarding the remaining two transactions pursuant to the MoU being
the sale of a 16% interest to the National Indigenisation and
Economic Empowerment Fund and the donation of a 10% interest to a
Gwanda Community Share OwnershipTrust and their responses are
awaited.
Blanket's audited revenues and profit after tax for the year to
December 31, 2011 were US$56.6 million and US$19.2 million,
respectively.
Nama Base Metals Project, Zambia
The first phase of the 2012 drilling programme at the Nama base
metals project in Zambia commenced in March 2012 on the Konkola
East target area. Phase 1 of the 2012 programme comprises 6 holes
of approximately 2,400 meters of diamond drilling and has the
objective of identifying an upward extension of the mineralised
zone identified in the 2011 exploration programme. The first two
holes have been completed and assay results are awaited. The third
hole is in progress. It is anticipated that Phase 1 of the 2012
programme will be completed in the third quarter of 2012.
Commenting on Caledonia's performance, Stefan Hayden, President
and CEO, said: "The first quarter of 2012 was a solid performance
from the Blanket Mine in Zimbabwe, particularly after taking into
account the necessary maintenance work on the main No. 4 Shaft.
Blanket's gold production for the Quarter was 9,164 ounces, which
was in line with our previous guidance. The shaft maintenance work
has now been completed and gold production has already improved
significantly. Gold production in April was 3,722 ounces, which
represents an annualised rate of over 44,000 ounces of gold. I
therefore remain confident that the Blanket Mine will achieve its
target 2012 production of 40,000 ounces of gold.
"We have made significant and rapid progress on implementing the
Memorandum of Understanding signed with the Government of Zimbabwe
on February 20 regarding the indigenisation of the Blanket Mine.
The first transaction in terms of the MoU, being the sale of a 15%
interest in Blanket Mine to Indigenous Zimbabweans, has been
signed. The second transaction, being the sale of a 10% interest to
The Blanket Mine Employee Trust, is well advanced and I expect this
to be concluded shortly.
"Underground development work has already started at Eagle
Vulture, which is the first of Blanket's satellite exploration
projects to be progressed. The electricity connections to the GG
and Mascot exploration projects are now nearing completion and we
expect to commence underground work on both projects
imminently.
"Blanket will fund all of its immediate investment requirements
from its internally generated cash, both at the satellite projects
and the down-dip exploration at Blanket Mine. Depending on the
outcome of these projects, Blanket may, in due course, be able to
increase production above 40,000 ounces of gold per annum. The
Blanket crushing and metallurgical plant has surplus capacity and
any incremental ore could be treated without any requirement for
new investment.
"Phase 1 of the 2012 Exploration Programme at the Nama Project
in Zambia, commenced at the end of March. We remain hopeful that
the further exploration work at Nama will indicate the potential
existence of a significant copper deposit.
"Caledonia's balance sheet has strengthened further due to the
strong operational cash generation. Caledonia will use its cash
resources of over $16 million to fund the current year's
exploration at Nama and any further exploration at Nama.
Caledonia's strong and improving cash position also allows it the
flexibility to take advantage of any new opportunities that might
arise."
The unaudited, condensed consolidated Financial Statements and
the Management Discussion and Analysis, for the quarter to March
31, 2012 are available from the Company's website
www.caledoniamining.com and from SEDAR.
Condensed Consolidated Statement of Comprehensive Income (unaudited)
(in thousands of Canadian dollars except per share amounts)
Three months ended March 31
2012 2011
$ $
Revenue 17,503 11,226
Royalty (1,227) (455)
Production costs (6,444) (4,950)
Depreciation (836) (573)
------------------------ ---------------
Gross profit 8,996 5,248
Administrative Expenses (801) (735)
Share-based payments - (1,102)
Foreign exchange loss (18) -
------------------------ ---------------
Results from operating activities 8,177 3,411
Net finance income/(expense) (46) (155)
------------------------ ---------------
Profit before income tax 8,131 3,256
Income Tax expense (1,020) (1,362)
------------------------ ---------------
Profit for the period 7,111 1,894
Loss on foreign currency translation (815) (714)
------------------------ ---------------
Total comprehensive income for
the period 6,296 1,180
------------------------ ---------------
Earnings per share (cents)
Basic 1.4 0.38
Diluted 1.4 0.35
Weighted average number of common
shares outstanding (thousands)
at March 31
Basic 500,549 500,169
Diluted 510,033 542,709
-------------------------------------- ------------------------ ---------------
Condensed Consolidated statements of Financial Position (unaudited)
(In thousands of Canadian As at March 31, December 31,
dollars)
2012 2011
$ $
Total non-current assets 33,745 34,248
Inventories 4,434 4,482
Prepayments 638 334
Trade and other receivables 3,123 3,652
Cash and cash equivalents 16,288 9,686
------------------- ----------------------
Total current assets 24,483 18,154
------------------- ----------------------
Total assets 58,228 52,402
=================== ======================
Total non-current liabilities 7,651 7,822
Trade and other payables 4,267 3,841
Income taxes payable - 295
Bank overdraft - 430
------------------- ----------------------
Total liabilities 11,918 12,388
Capital and reserves 46,310 40,014
------------------- ----------------------
Total equity and liabilities 58,228 52,402
=================== ======================
Condensed Consolidated Statement of Cash Flows (unaudited)
(In thousands of Canadian dollars)
For the 3 months ended March 31
2012 2011
$ $
Cash flows from operating activities
Profit for the period 7,111 1,894
Adjustments to reconcile net cash
from operations 1,680 3,172
Changes in non-cash working capital 405 (72)
Tax paid (1,020) (308)
Net finance income/(expense) (46) (155)
----------------------- ------------------
Net cash from operating activities 8,130 4,531
Cash flows from investing activities
Property, plant and equipment
additions (1,098) (3,523)
Cash flows from financing activities
Bank overdraft increase/(decrease) (430) 64
Net increase in cash and cash
equivalents 6,602 1,072
Cash and cash equivalents at the
beginning of the period 9,686 1,145
----------------------- ------------------
Cash and cash equivalents at the
end of the period 16,288 2,217
----------------------------------------- ----------------------- ------------------
For more information, please contact:
Caledonia Mining Corporation Canaccord Genuity Limited
Mark Learmonth John Prior / Sebastian Jones
Tel: + 27 11 447 2499 Tel: + 44 20 7523 8350
marklearmonth@caledoniamining.com
Newgate Threadneedle CHF Investor Relations
Josh Royston /Beth Harris/Terry Stephanie Fitzgerald
Garrett Tel: +44 20 7653 9850 Tel : +1 416 868 1079 x 222
stephanie@chfir.com
Further information regarding Caledonia's exploration activities
and operations along with its latest financials and Management
Discussion and Analysis may be found at www.caledoniamining.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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