TIDMCMCL
RNS Number : 4417Y
Caledonia Mining Corporation PLC
13 May 2021
Caledonia Mining Corporation Plc
Results for the Quarter ended March 31, 2021
(NYSE AMERICAN: CMCL; AIM: CMCL)
May 13th, 2021
Caledonia Mining Corporation Plc ("Caledonia" or the "Company")
announces its operating and financial results for the quarter ended
March 31, 2021 (the "Quarter"). Further information on the
financial and operating results for the Quarter can be found in the
Management Discussion and Analysis ("MD&A") and the unaudited
interim financial statements which are available on the Company's
website and which have been filed on SEDAR.
Financial Highlights
-- Gross revenues of $25.7 million (Q1 2020: $23.6 million).
Higher revenues reflect a higher realised gold price offset by
lower sales due to lower production. Revenues include the sale
proceeds of 1,584 ounces of gold in work-in-progress brought
forward from 2020.
-- EBITDA excluding net foreign exchange gains and the export
incentive credit of $9.5 million (Q1 2020: $9.8 million).
-- On-mine cost[1] of $836 per ounce (Q1 2020: $702 per ounce).
Increased cost per ounce was primarily due to a lower grade and
lower recoveries; cost per tonne milled increased by 4 per
cent.
-- Normalised all-in sustaining cost(1) (excluding the effect of
the export credit incentive and its successor scheme) of $1,077 per
ounce (Q1 2020: $904 per ounce).
-- Adjusted earnings per share(1) of 51.6 cents (Q1 2020: 57.3 cents).
-- Net cash from operating activities of $2.0 million (Q1 2020: $10.1 million).
o Cash from operations was adversely affected by increased
working capital, in particular higher amounts due for gold sales -
these have been settled in full after the end of the Quarter.
o Responsibility for making payments for gold deliveries from
the Blanket Mine has now moved from the Reserve Bank of Zimbabwe
(RBZ) to its gold refining subsidiary Fidelity Printers and
Refiners (Private) Limited (Fidelity). Caledonia believes this move
will simplify and improve the mechanism for receiving payments for
the gold it produces and is pleased to report that the new system
is operating well.
-- Net cash and cash equivalents of $13.0 million (Q1 2020: $13.8 million).
-- Dividend paid in the Quarter of 11 cents per share, a 46.7 per cent increase from Q1 2020.
-- Changes to the proportion of dollar-denominated revenue that
we must surrender for local currency, increased from 30 per cent to
40 per cent. We have accommodated this change by increasing our
local currency denominated expenditures and by participating in the
weekly foreign currency auction.
Operating Highlights
-- 13,197 ounces of gold produced in the Quarter (Q1 2020:
14,233 ounces). Production was adversely affected by underground
flooding and lower grades.
-- Grade of 2.98g/t (Q1 2020: 3.35). Grade was low due to a
fall-of-ground problem in a high-grade area.
-- The Central Shaft was commissioned at the end of the Quarter and is now operational.
-- Total injury frequency rate for the first quarter was 0.79
compared to 0.97 for 2020. Blanket mine achieved 1,857,844 fatality
free shifts as at end of the Quarter.
-- The 12MWac solar project is now in the procurement phase and
is expected to be operational within the next 12 months.
Post Quarter-End Highlights and Outlook
-- Quarterly dividend increased by 9 per cent to 12 cents per
share in April 2021, a 75 per cent cumulative increase from the
level of 6.875 cents since October 2019. This increased dividend is
due to Caledonia's enhanced outlook following the commissioning of
the Central Shaft at the end of the Quarter.
-- A strong recovery in production in April: 5,470 ounces were
produced in April which is above plan and 24 per cent higher than
the average monthly production in the Quarter.
-- 2021 gold production guidance of between 61,000 - 67,000 ounces.
-- Cash balance at April 30 of $16.3 million.
Steve Curtis, Chief Executive Officer, commented:
"The first quarter of 2021 raised several challenges which I am
pleased to say have now rectified. The fall-of-ground at AR South
has been resolved and this high-grade area is back in full
production. The underground flooding which resulted in five lost
production days was caused by exceptionally heavy rains; rainfall
in the first quarter was more than two-and-a-half times higher than
the average for the same period in previous years. In response, we
increased our pumping capacity so that we can manage any repetition
of this event in future. On the positive side, the heavy rain means
that water supply, which has sometimes been a cause for concern, is
assured for the foreseeable future.
"Gold production in April show a marked improvement and Blanket
produced 5,470 ounces in April, which is better than planned. The
strong recovery in performance has continued into May and we are
confident that we will achieve our full year guidance of between
61,000 and 67,000 ounces.
"Operating costs were well controlled with the increase in the
on-mine cost per ounce predominantly due to lower grades and
recoveries, which has now been addressed. The cost per tonne mined
increased by only 4 per cent in the Quarter compared to the first
quarter of 2020 and this was due largely to increased usage of
diesel generators because of continued grid supply problems. Given
the high fixed cost base, I expect that costs per ounce will reduce
as production increases.
"Early in the Quarter the proportion of dollar-denominated
revenue that we must surrender for local currency increased from 30
per cent to 40 per cent. We have accommodated this change by
increasing our local currency denominated expenditures and by
participating in the weekly foreign currency auctions. We are not
accumulating excessive local currency balances which we are unable
to convert into hard currency and remit out of Zimbabwe.
" Responsibility for making payments for gold deliveries from
the Blanket Mine moved from the Reserve Bank of Zimbabwe to its
gold refining subsidiary Fidelity Printers and Refiners Limited. T
his move has simplif ied and improve d the mechanism for receiving
payments for the gold Blanket produces, which in the early months
of 2021 had been subject to delays. Those issues have been fully
resolved with full catch up of delayed payments and Caledonia is
pleased to report that the new system is operating well. We have a
strong , long-term working relationship with the Reserve Bank of
Zimbabwe and Fidelity and are delighted that they have improved the
payment process .
"As a result of the normalisation of working capital and helped
by the higher production in April, our consolidated cash position
improved from $13.0 million at the end of March to $16.3 million at
the end of April.
"We are delighted to have commissioned the Central Shaft at the
end of the Quarter. The shaft is now hoisting waste material
arising from the final development to connect the shaft to the
production areas. This has relieved pressure on the Number 4 Shaft
which can focus on hoisting ore until Central shaft takes over this
role later in the year. The commissioning of Central shaft means
that, despite the slow start to the year, we are confident we will
achieve our production guidance for 2021 of between 61,000 to
67,000 ounces and 80,000 ounces per annum from 2022 onwards.
"We increased the dividend for the fourth time at the start of
January to 11 cents a share and we increased it again to 12 cents
per share in April. This is a 75 per cent cumulative increase from
the level of 6.875 cents since October 2019, creating genuine value
and returns for our shareholders.
"In December we announced that we had entered into option
agreements on two properties, Glen Hume and Connemara North, in the
Gweru mining district in the Zimbabwe Midlands. These options give
us the right to explore each property for periods of 15 and 18
months respectively. If our exploration is successful these
properties will add further impetus to our growth. We have made
good progress on the drilling campaign at Glen Hume and we are
evaluating the results of the first phase. At Connemara, where we
have the benefit of evaluating historical drill data, we are
preparing a geological model before we commence drilling this
summer.
"Safety remains our primary concern, and I am pleased to report
that the Quarter passed without serious incident. I am also
delighted to note that the Central Shaft was commissioned at the
end of the Quarter without serious accidents. This was a six-year
project which involved sinking and equipping a shaft to a depth of
over 1,200 meters. This activity is notoriously high-risk and it is
a credit to all involved that we completed the project safely.
"We continue to take extraordinary measures to protect our
workers and their families from COVID-19. To date, we have recorded
38 positive tests results amongst our 1,650 workers and their
dependants at Blanket, none of whom required hospitalisation. We
have also placed orders for vaccines for our workers and their
families.
"Caledonia's immediate strategic focus is to convert the
commissioning of Central Shaft project into higher production,
lower costs and increased cash generation. We will also finalise
the exploration activities at Glen Hume and Connemara North while
evaluating further investment opportunities in the gold and
precious metals sector in Zimbabwe and in other jurisdictions, with
our long-term vision of becoming a mid-tier, multi-asset gold
producer."
Mr Dana Roets (B Eng (Min.), MBA, Pr.Eng., FSAIMM, AMMSA), Chief
Operating Officer, is the Company's qualified person as defined by
Canada's National Instrument 43-101 and has approved any scientific
or technical information contained in this news release.
For further information please contact:
Caledonia Mining Corporation
Plc Tel: +44 1534 679 800
Mark Learmonth Tel: +44 7817 841 793
Camilla Horsfall
WH Ireland (Nomad & Broker)
Adrian Hadden/James Sinclair-Ford Tel: +44 20 7220 1751
Blytheweigh
Tim Blythe/Megan Ray Tel: +44 207 138 3204
3PPB
Patrick Chidley Tel: +1 917 991 7701
Paul Durham Tel: +1 203 940 2538
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014.
Cautionary Note Concerning Forward-Looking Information
Information and statements contained in this news release that
are not historical facts are "forward-looking information" within
the meaning of applicable securities legislation that involve risks
and uncertainties relating, but not limited to Caledonia's current
expectations, intentions, plans, and beliefs. Forward-looking
information can often be identified by forward-looking words such
as "anticipate", "believe", "expect", "goal", "plan", "target",
"intend", "estimate", "could", "should", "may" and "will" or the
negative of these terms or similar words suggesting future
outcomes, or other expectations, beliefs, plans, objectives,
assumptions, intentions or statements about future events or
performance. Examples of forward-looking information in this news
release include: production guidance, estimates of future/targeted
production rates, and our plans and timing regarding further
exploration and drilling and development. This forward-looking
information is based, in part, on assumptions and factors that may
change or prove to be incorrect, thus causing actual results,
performance or achievements to be materially different from those
expressed or implied by forward-looking information. Such factors
and assumptions include, but are not limited to: failure to
establish estimated resources and reserves, the grade and recovery
of ore which is mined varying from estimates, success of future
exploration and drilling programs, reliability of drilling,
sampling and assay data, assumptions regarding the
representativeness of mineralization being inaccurate, success of
planned metallurgical test-work, capital and operating costs
varying significantly from estimates, delays in obtaining or
failures to obtain required governmental, environmental or other
project approvals, inflation, changes in exchange rates,
fluctuations in commodity prices, delays in the development of
projects and other factors.
Security holders, potential security holders and other
prospective investors should be aware that these statements are
subject to known and unknown risks, uncertainties and other factors
that could cause actual results to differ materially from those
suggested by the forward-looking statements. Such factors include,
but are not limited to: risks relating to estimates of mineral
reserves and mineral resources proving to be inaccurate,
fluctuations in gold price, risks and hazards associated with the
business of mineral exploration, development and mining, risks
relating to the credit worthiness or financial condition of
suppliers, refiners and other parties with whom the Company does
business; inadequate insurance, or inability to obtain insurance,
to cover these risks and hazards, employee relations; relationships
with and claims by local communities and indigenous populations;
political risk; risks related to natural disasters, terrorism,
civil unrest, public health concerns (including health epidemics or
outbreaks of communicable diseases such as the coronavirus
(COVID-19)); availability and increasing costs associated with
mining inputs and labour; the speculative nature of mineral
exploration and development, including the risks of obtaining or
maintaining necessary licenses and permits, diminishing quantities
or grades of mineral reserves as mining occurs; global financial
condition, the actual results of current exploration activities,
changes to conclusions of economic evaluations, and changes in
project parameters to deal with unanticipated economic or other
factors, risks of increased capital and operating costs,
environmental, safety or regulatory risks, expropriation, the
Company's title to properties including ownership thereof,
increased competition in the mining industry for properties,
equipment, qualified personnel and their costs, risks relating to
the uncertainty of timing of events including targeted production
rate increase and currency fluctuations. Security holders,
potential security holders and other prospective investors are
cautioned not to place undue reliance on forward-looking
information. By its nature, forward-looking information involves
numerous assumptions, inherent risks and uncertainties, both
general and specific, that contribute to the possibility that the
predictions, forecasts, projections and various future events will
not occur. Caledonia undertakes no obligation to update publicly or
otherwise revise any forward-looking information whether as a
result of new information, future events or other such factors
which affect this information, except as required by law.
This news release is not an offer of the shares of Caledonia for
sale in the United States or elsewhere. This news release shall not
constitute an offer to sell or the solicitation of an offer to buy,
nor shall there be any sale of the shares of Caledonia, in any
province, state or jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of such province, state or
jurisdiction.
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive
Income (unaudited)
($'000's) 3 months ended
March 31
2020 2021
Revenue 23,602 25,720
Royalty (1,182) (1,289)
Production costs (10,687) (12,857)
Depreciation (1,173) (1,193)
---------- ---------
Gross profit 10,560 10,381
Other income 1,918 23
Other expenses (208) (258)
Administrative expenses (1,547) (1,610)
Net foreign exchange gain 2,223 273
Cash-settled share-based payment (184) (152)
Fair value losses on derivative assets (35) (114)
---------- ---------
Operating profit 12,727 8,543
Net finance costs (138) (118)
---------- ---------
Profit before tax 12,589 8,425
Tax expense (2,910) (3,002)
---------- ---------
Profit for the period 9,679 5,423
---------- ---------
Other comprehensive income
Items that are or may be reclassified to
profit or loss
Exchange differences on translation of foreign
operations (1,351) (202)
Total comprehensive income for the period 8,328 5,221
---------- ---------
Profit attributable to:
Shareholders of the Company 8,240 4,550
Non-controlling interest 1,439 873
---------- ---------
Profit for the period 9,679 5,423
---------- ---------
Total comprehensive income attributable to:
Shareholders of the Company 6,889 4,348
Non-controlling interest 1,439 873
---------- ---------
Total comprehensive income for the period 8,328 5,221
---------- ---------
Earnings per share (cents)
Basic 71.2 37.3
Diluted 71.1 37.2
Adjusted earnings per share (cents)
Basic 57.3 51.6
Dividends declared per share (cents) 7.5 11.0
--------------------------------------------------------- ---------- ---------
Summarised Consolidated Statements of Financial Position (unaudited)
($'000's) As at Dec 31 Mar 31
2020 2021
Total non-current assets 133,334 138,725
Inventories 16,798 14,363
Prepayments 1,974 3,988
Trade and other receivables 4,962 11,247
Income tax receivable 76 63
Cash and cash equivalents 19,092 13,027
Derivative financial assets 1,184 1,045
Assets held for sale 500 500
--------- ---------
Total assets 177,920 182,958
--------- ---------
Total non-current liabilities 9,913 10,332
Loans and borrowings - short term
portion 408 286
Lease liabilities - short term portion 61 42
Trade and other payables 8,664 8,290
Income taxes payable 495 861
Cash-settled share-based payment
- short term portion 336 1,575
--------- ---------
Total liabilities 19,877 21,386
--------- ---------
Total equity 158,043 161,572
--------- ---------
Total equity and liabilities 177,920 182,958
--------- ---------
Condensed Consolidated Statement of Cash Flows
(unaudited)
($'000's) 3 months ended
March 31
2020 2021
Cash flows from operating activities
Cash generated from operations 10,933 2,550
Net interest paid (140) (123)
(719
Tax paid ) (464)
-------- --------
Net cash from operating activities 10,074 1,963
Cash flows used in investing activities
Acquisition of property, plant and
equipment (4,693) (6,344)
Investment in exploration and evaluation
assets - (190)
Proceeds from disposal of subsidiary 900 340
-------- --------
Net cash used in investing activities (3,793) (6,194)
Cash flows from financing activities
Dividends paid (969) (1,692)
Repayment of term loan facility - (104)
Payment of lease liabilities - (32)
Net cash used in financing activities (969) (1,828)
Net increase/(decrease) in cash and
cash equivalents 5,312 (6,059)
Effect of exchange rate fluctuations
on cash held (380) (6)
Net cash and cash equivalents at
beginning of the period 8,893 19,092
Net cash and cash equivalents at
end of the period 13,825 13,027
--------------------------------------------------- -------- --------
[1] Non-IFRS measures such as "On-mine cost per ounce", "All-in
sustaining cost per ounce" and "adjusted EPS" are used throughout
this document. Refer to section 10 of the MD&A for a discussion
of non-IFRS measures .
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