TIDMCMCL
RNS Number : 9314J
Caledonia Mining Corporation
14 August 2012
Caledonia Mining Reports Second Quarter 2012 Operating and
Financial Results and Notification of Management Conference
Call
Toronto, Ontario - August 14, 2012: Caledonia Mining Corporation
(the "Company") (TSX: CAL, OTCQX: CALVF, AIM: CMCL) is pleased to
announce its operating and financial results for the second quarter
2012 ("Q2" or the "Quarter"), which are reported below in Canadian
dollars unless otherwise indicated.
Operational Highlights
-- Gold produced at the Blanket Mine in Zimbabwe in Q2 was
11,560 ounces, 26% higher than the 9,164 ounces produced in the
quarter ended March 31, 2012 (the "preceding quarter") and 41%
higher than the 8,226 ounces produced in Q2 of 2011 (the
"comparable quarter").
-- The increase in gold production in Q2 was due to the
completion of scheduled maintenance on the winding portion of both
compartments of No. 4 Shaft which was completed in early May and
progressively allowed an increase in the daily available hoisting
time.
-- Average gold recovery during the Quarter increased to 93.9%,
compared to 93.2% in the preceding quarter.
-- Blanket's cash operating costs in the Quarter decreased to
US$547 per ounce of gold produced from US$648 in the preceding
quarter and US$585 in the comparable quarter. The decrease in cash
costs was due to the higher gold production during the Quarter and
the non-recurrence of certain costs which temporarily increased the
average cost per ounce in the preceding quarter.
-- Gold production in July 2012 was 4,708 ounces.
Financial Highlights
-- Gold Sales during the Quarter were 11,560 ounces at an
average sales price of US$1,599 per ounce compared to 10,368 ounces
at an average sales price of US$1,688 in the preceding quarter and
8,226 ounces at an average sales price of US$1,512 in the
comparable quarter.
-- Gross Profit for the Quarter (i.e. after depreciation and
amortization but before administrative expenses) was $10,067,000
compared to $8,996,000 in the preceding quarter and $5,593,000 in
the comparable quarter.
-- Net profit after tax for the Quarter was $5,497,000 compared
to $7,111,000 in the preceding quarter and $2,874,000 in the
comparable quarter. Net profit in the Quarter was reduced by the
payment of a US$1 million donation to the Gwanda Community Share
Ownership Trust in terms of the Indigenisation Agreements signed by
Blanket Mine, and by the increase in second quarter tax payments to
the Zimbabwean Revenue Authority.
-- Basic earnings per share for the Quarter were 1.1 cents per
share, compared to 1.4 cents in the preceding quarter and 0.6 cents
in the comparable quarter. Basic earnings per share for the first
half of the year were 2.5 cents compared to 0.9 cents in the six
months to June 30, 2011.
-- At June 30, 2012 the Corporation had cash and cash
equivalents of $18,323,000 compared to $16,288,000 at March 31,
2012 and $2,612,000 at June 30, 2011.
-- Cash flow from operations in the six months to June 30, 2012
before capital investment was $11,195,000 compared to $7,346,000 in
the six months to June 30, 2011.
-- 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$7,893,000
compared to US$3,282,000 in the preceding quarter and US$3,307,000
in the comparable quarter. Payments in the Quarter include a
donation of US$1 million to the Gwanda Community Share Ownership
Trust and a payment of US$1.8 million which was made to the
National Indigenisation Economic Empowerment Fund ("NIEEF") in
anticipation of an advance dividend arrangement against their right
to receive dividends declared by Blanket on their proposed
shareholding in Blanket. Both the Community donation and the
payment to NIEEF were made in terms of the implementation of
indigenisation at Blanket Mine.
Nama Base Metals Project, Zambia
A News Release issued on August 9, 2012 sets out a summary of
the drilling programme that has been completed which confirms the
existence of the mineralised zone that was identified in 2011 and
describes the further drilling work which has already
commenced.
Indigenisation
Caledonia and Blanket have made considerable progress in
implementing the Memorandum of Understanding ("MoU") which was
signed with the Government of Zimbabwe in February 2012 pursuant to
which Indigenous Zimbabweans will acquire an effective 51%
ownership of the Blanket Mine for a paid transactional value of
US$30.09 million. The various transaction documents have been
signed and Blanket has now received its Certificate of Compliance
from the Government of Zimbabwe. Completion of the agreements is
subject to a pending condition precedent being the approval of the
Reserve Bank of Zimbabwe for the transactions contemplated in the
MoU, underlying agreements and related transactions to give effect
to the Indigenisation programme.
Commenting on Caledonia's performance, Stefan Hayden, President
and CEO, said: "The second quarter of 2012 showed a substantial
improvement in gold production at the Blanket Mine in Zimbabwe.
Gold production in the quarter was 11,560 ounces - 26% higher than
the preceding quarter and 41% higher than the second quarter of
2011. Increased gold production, further improvements in gold
recoveries and continued close attention to costs contributed to a
reduction in average operating costs from US$648 per ounce of gold
produced in the preceding quarter to US$547 per ounce of gold
produced. Higher production and lower costs contributed to the
increase in gross profits. Gross profit for the Quarter was
$10,067,000 compared to $8,996,000 in the preceding quarter,
notwithstanding a 5% fall in the average realised price per ounce
of gold sold.
The strong operating performance is a testament to the hard work
of the management and employees at Blanket and shows the benefits
of Caledonia's recent investments in the Blanket Mine.
Caledonia and Blanket have made good progress on implementing
indigenisation at Blanket Mine. All of the transaction documents
have been signed; we await only the final approval from the Reserve
Bank of Zimbabwe so that all of the transactions can become
unconditional. Once indigenisation has been fully implemented,
Blanket, as a profitable and cash-generative gold producer, will be
well-positioned to take advantage of opportunities that exist for
further growth.
Work at the Nama base metals project in Zambia has continued and
our ongoing drilling programme has identified a substantial new
copper-bearing mineralised zone. Further work has already commenced
to identify the scale of this body. Caledonia has sufficient cash
resources on hand to continue this work as quickly as
possible."
Caution Regarding Forward Looking Statements:
Information included in this release constitutes forward-looking
statements. There can be no assurance that future exploration will
identify mineralisation that will prove to be economic, that
anticipated metallurgical recoveries will be achieved, that future
evaluation work will confirm the viability of deposits that may be
identified or that required regulatory approvals will be
obtained.
Caledonia management will host a conference call starting at
10.00 (EDT), 15.00 (GMT+1) on August 15, 2012. Please dial-in 10
minutes beforehand and quote Caledonia as the conference call
password.
Canadian Toll-free Number*: + 1 800 608 0547
USA Toll-free Number*:+ 1 866 966 5335
UK Toll-free Number*:+44 (0)808 109 0700
International Access Number: +44 (0)20 3003 2666
*If you are calling from a mobile phone your provider may charge
you when connected to the toll-free numbers.
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
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
Beth Harris / Josh Royston Stephanie Fitzgerald
Tel: +44 20 7653 9850 Tel : +1 416 868 1079 x 222
stephanie@chfir.com
Condensed Consolidated Statement of Comprehensive Income (unaudited)
(In thousands of Canadian dollars except per share amounts)
For the 3 months For the 6 months
ended June 30 ended June 30
2012 2011 2012 2011
$ $ $ $
Restated Restated(1)
(1)
Revenue 18,612 11,990 36,115 23,216
Royalty (1,303) (593) (2,530) (1,048)
Production costs (6,318) (5,171) (12,762) (10,121)
Amortization (924) (633) (1,760) (1,206)
-------- --------- --------- ------------
Gross profit 10,067 5,593 19,063 10,841
Administrative expenses (1,174) (723) (1,974) (1,457)
Share-based payment - - (1,102)
Donation to indigenous community (1,006) - (1,006) -
-------- --------- --------- ------------
Foreign exchange (loss)/gain. 379 - 361 -
-------- --------- --------- ------------
Results from operating activities 8,266 4,870 16,444 8,282
Finance expense (35) (24) (81) (179)
-------- --------- --------- ------------
Profit before income tax 8,231 4,846 16,363 8,103
Income tax expense (2,734) (1,972) (3,755) (3,334)
-------- --------- --------- ------------
Profit for the period 5,497 2,874 12,608 4,769
Profit/(loss) on foreign currency
translation 619 (361) (196) (1,075)
-------- --------- --------- ------------
Total comprehensive income
for the period 6,116 2,513 12,412 3,694
-------- --------- --------- ------------
Earnings per share (cents)
Basic 1.1 0.57 2.5 0.95
Diluted 1.1 0.56 2.5 0.93
Weighted average number of
common shares outstanding (thousand)
Basic 505,774 500,313 503,147 500,241
Diluted 509,427 513,696 506,800 511,712
--------------------------------------- -------- --------- --------- ------------
Note 1: The 2011 comparatives have been re-stated by
re-allocating withholding taxes from Administrative Expenses to
Income Tax expense.
Condensed Consolidated Statement of Cash Flows (unaudited)
(In thousands of Canadian dollars)
For the 6 months ended
June 30
2012 2011
$ $
Cash flows from operating activities
Profit for the period 12,608 4,769
Adjustments for:
Adjustments to reconcile net cash
from operations 6,196 5,802
Changes in non-cash working capital (955) (512)
Indigenisation donation (1,006) -
Advance paid (1,845) -
Tax paid (3,722) (2,534)
Interest paid (81) (179)
------------ -----------
Net cash from operating activities 11,195 7,346
Cash flows from investing activities
Property, plant and equipment additions (2,779) (5,171)
Cash flows from financing activities
Bank overdraft increase/(decrease) (293) 1,675
Proceeds from shares issued 514 38
------------ -----------
Net cash from (used in) financing
activities (221) 1,713
Net increase in cash and cash equivalents 8,637 3,888
Cash and cash equivalents at beginning
of period 9,686 1,145
Cash and cash equivalents at end
of period 18,323 5,033
-------------------------------------------- ------------ -----------
Condensed Consolidated statements of Financial Position (unaudited)
(In thousands of Canadian As at June 30, December 31,
dollars)
2012 2011
$ $
Total non-current assets 35,483 34,248
Inventories 4,670 4,482
Prepayments 276 334
Trade and other receivables 4,586 3,652
Advance paid 1,845 -
--------------- --------------
Cash and cash equivalents 18,323 9,686
--------------- --------------
Total current assets 29,700 18,154
--------------- --------------
Total assets 65,183 52,402
--------------- --------------
Total non-current liabilities 7,863 7,822
Trade and other payables 4,242 3,841
Income taxes payable - 295
Bank overdraft 138 430
--------------- --------------
Total liabilities 12,243 12,388
Capital and reserves 52,940 40,014
--------------- --------------
Total equity and liabilities 65,183 52,402
------------------------------------------- --------------- --------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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