TIDMCMCL
RNS Number : 8602I
Caledonia Mining Corporation PLC
10 August 2023
Caledonia Mining Corporation Plc
Results for the Quarter ended June 30, 2023
(NYSE AMERICAN: CMCL; AIM: CMCL; VFEX: CMCL)
August 10, 2023: Caledonia Mining Corporation Plc ("Caledonia"
or the "Company") announces its operating and financial results for
the quarter and the six months ended June 30, 2023 (the "Quarter"
and "First Half" respectively). Further information on the
financial and operating results for the Quarter and First Half can
be found in the management discussion and analysis ("MD&A") and
the unaudited financial statements which are available on the
Company's website and on SEDAR.
Financial Summary for the Quarter
-- Gross revenues of $37.0 million compared to $37.09 million
achieved in the second quarter of 2022 ("Q2 2022").
-- Gross profit of $10.9 million (Q2 2022: $17.9 million).
Whilst Blanket Mine ("Blanket") contributed $13.1 million, the
group's gross profit was affected by the costs of waste-stripping
at the Bilboes oxide operation, notwithstanding a small revenue
contribution of $2.2 million in the Quarter. Bilboes will be
returned to care and maintenance with effect from October 1, 2023,
and, pending the completion of the feasibility study for the
sulphide project, the remaining oxides will be mined as part of the
larger project.
-- EBITDA (excluding asset impairments, depreciation and net
foreign exchange gains and losses) of $10.5 million in the Quarter
and $11.2 million in the First Half (Q2 2022: $17.8 million; first
half of 2022: $31.4 million).
-- On-mine cost per ounce [1] for the Quarter of $1,084 included
the costs of the Bilboes oxide operation. At Blanket the on-mine
cost per ounce was $915 (Q2 2022: $692). This increase was in large
part due to the disappointing production performance in the
Quarter; the production challenges now appear to have been
addressed and July 2023 showed a material improvement in production
and costs.
-- All-in sustaining cost ("AISC") of $1,357 per ounce (Q2 2022:
$984 per ounce). The AISC per ounce in the Quarter increased due to
the factors referenced above which led to the higher on-mine cost
per ounce.
-- The Company suffered a foreign exchange loss in the Quarter
of $3.6 million (Q2 2022: $4.2 million gain) due to the significant
devaluation of the RTGS Dollar to USD in June 2023. This affected
operating profit and, accordingly, basic IFRS earnings per share
("EPS") showed a 0.6 cent loss (Q2 2022: 87.7 cent profit). IFRS
EPS reflects the movement in IFRS profit attributable to
shareholders and the effect of new shares issued. Adjusted EPS of
10.0 cents (Q2 2022: 56.2 cents) is adjusted for realized and
unrealized foreign exchange losses, impairments and fair value
adjustments.
-- A dividend of 14 cents per share was paid in April 2023; a
further dividend of 14 cents per share was paid in July 2023.
-- Group net cash outflows from operating activities of $2.2
million in the Quarter (Q2 2022: $16.7 million inflow) included
waste-stripping activities at Bilboes and the payment of legacy
creditors at Bilboes. The waste-stripping activities will
facilitate access to the sulphide mineralization when the sulphide
project is in operation.
-- Net cash and cash equivalents at the Quarter end were
negative $2.9 million (Q2 2022: positive $10.9 million). However,
the improved operating performance after the end of the Quarter led
to cash inflow from operations before working capital changes (i.e.
revenues less on-mine costs) of $7.7 million in July.
Operating Summary
-- 17,436 ounces of gold were produced from Blanket in the
Quarter (20,091 ounces produced in Q2 2022).
-- 1,076 ounces of gold were produced from the Bilboes oxide operation in the Quarter.
-- Bilboes will be returned to care and maintenance.
-- 34,653 ounces were produced in the First Half (38,605 ounces
produced in the first half of 2022).
-- Published encouraging results from the drilling campaign at Blanket.
-- Commenced the direct sale of gold to an end refiner outside Zimbabwe.
Post Quarter Developments
-- Production at Blanket in July of 7,829 ounces of gold and
strong operating cash flows therefrom demonstrate that production
challenges in the First Half have been addressed.
-- The decision to return Bilboes to a care and maintenance
status will stem cash outflows and losses for the remainder of the
year.
-- On August 8, Caledonia sadly announced the death of a
contractor who succumbed to injuries sustained in an accident at
Blanket.
Outlook
The immediate strategic focus is to:
-- Achieve our reiterated production (75,000 to 80,000 ounces)
and on-mine cost ($770 to $850 per ounce) guidance at Blanket for
2023.
-- Continue deep level drilling at Blanket with the objective of
further upgrading inferred mineral resources, thereby potentially
extending the life of mine.
-- Complete the Caledonia feasibility study on the Bilboes
sulphide project to determine the best implementation strategy and
financing requirements.
Commentary
After an encouraging start to the Quarter, continued operational
challenges at Blanket meant that production was below expectations
in May and the first half of June. These challenges have been
addressed and production improved substantially in the second half
of June and in July. 7,829 ounces of gold were produced at Blanket
in July at an on-mine cost of $715 per ounce: Caledonia therefore
maintains its production guidance for 2023 of between 75,000 and
80,000 ounces and its on-mine cost guidance of between $770 and
$850 per ounce.
During the Quarter, the Company published encouraging results
from the drilling campaign at Blanket. Approximately 5,600 meters
of drilling were completed between January and the end of May 2023.
Initial results indicate that the grades and widths of the existing
Eroica ore body are generally better than expected. The Company
intends to announce the results from drilling at the Blanket ore
bodies in due course.
The Company conducted equity raises by way of placings in the
previous quarter and this Quarter that targeted institutional
investors in the UK, Europe, South Africa and Zimbabwe. The
placings raised $16.6 million before expenses and it was
encouraging to see demand from new and existing institutional
investors whose support will help Caledonia achieve its growth
plans in Zimbabwe.
During the Quarter, the Company commenced the direct sale of
gold to an end refiner outside Zimbabwe. This arrangement is a big
milestone for Caledonia and further demonstrates the pragmatic
approach of the Zimbabwe authorities to resolve commercial issues
facing gold producers. The arrangement applies not only to Blanket
but to all Caledonia's gold assets which should make it easier for
Caledonia to arrange debt facilities to support the construction of
new mines.
Commenting, Chief Executive Officer Mark Learmonth said:
"Mining is never without its difficulties, and the first half of
this year has certainly not been without its challenges. However,
Blanket is now running better than expected and I look forward to
achieving production guidance of between 75,000 and 80,000 ounces
of gold for 2023.
"Due to the lack of confidence that the Bilboes oxide mine can
operate profitably, it will return to care and maintenance with
effect from October 1, 2023. In due course, the remaining oxide
material will be mined and processed alongside the sulphide ore.
This outcome has no bearing on the viability of the much larger
sulphide project which was the reason for acquiring Bilboes. The
results of the feasibility study on the project will be published
before year end after which we will be able to establish the best
development approach.
"In May, Caledonia announced the retirement of Leigh Wilson as
Director and Non-Executive Chairman of the Company, a role that he
had held for 10 years. I thank Leigh for his strong leadership; his
strength, skills and experience have proved invaluable over this
period. He is succeeded by John Kelly, who is a long-standing
Non-Executive Director."
Caledonia will host an online presentation and Q&A session
open to all investors on 14 August 2023 at 14:00 London Time
The Zoom details for this call are set out below.
When: Aug 14, 2023 14:00 London Time
Topic: Q2 Results Call for Shareholders
Please click the link below to join the webinar:
https://caledoniamining.zoom.us/j/92451532646?pwd=Yis5cWJSUGZCNEZjM2
lpZHgyMUFOQT09
Passcode: 880290
Enquiries:
Caledonia Mining Corporation Plc
Mark Learmonth Tel: +44 1534 679 800
Camilla Horsfall Tel: +44 7817 841 793
Cenkos Securities plc (Nomad and Joint Broker)
Adrian Hadden Tel: +44 207 397 1965
Neil McDonald Tel: +44 131 220 9771
Pearl Kellie Tel: +44 131 220 9775
Liberum Capital Limited (Joint Broker)
Scott Mathieson/Kane Collings Tel: +44 20 3100 2000
BlytheRay Financial PR (UK)
Tim Blythe/Megan Ray Tel: +44 207 138 3204
3PPB (Financial PR, North America)
Patrick Chidley Tel: +1 917 991 7701
Paul Durham Tel: +1 203 940 2538
Curate Public Relations (Zimbabwe)
Debra Tatenda Tel: +263 77802131
IH Securities (Private) Limited (VFEX Sponsor
- Zimbabwe) Tel: +263 (242) 745 119/33/39
Lloyd Mlotshwa
Note: This announcement contains inside information which is
disclosed in accordance with the Market Abuse Regulation (EU) No.
596/2014 ("MAR") as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018 and is disclosed in
accordance with the Company's obligations under Article 17 of
MAR.
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 Statements of profit or loss and Other comprehensive
income (Unaudited)
($'000's)
3 months ended 6 months ended
June 30 June 30
2023 2022 2023 2022
Revenue 37,031 36,992 66,466 72,064
Royalty (1,963) (1,854) (3,443) (3,612)
Production costs (20,726) (14,502) (40,576) (28,861)
Depreciation (3,409) (2,639) (5,664) (4,702)
--------------- ------------ --------- ------------------------------
Gross profit 10,933 17,997 16,783 34,889
Other income 168 1 186 3
Other expenses (1,461) (490) (2,099) (1,283)
Administrative expenses (3,183) (2,908) (9,122) (5,279)
Net foreign exchange (loss) gain (3,610) 4,172 (2,077) 5,081
Cash-settled share-based expense 9 57 (271) (310)
Equity-settled share-based
expense (221) - (331) (82)
Net derivative financial
instrument
expenses (54) 41 (488) (1,697)
--------------- ------------ --------- ------------------------------
Operating profit 2,581 18,870 2,581 31,322
Net finance costs (1,057) (175) (1,824) (291)
--------------- ------------ --------- ------------------------------
Profit before tax 1,524 18,695 757 31,031
Tax expense (1,273) (5,314) (4,775) (10,033)
--------------- ------------ --------- ------------------------------
Profit (loss) for the period 251 13,381 (4,018) 20,998
--------------- ------------ --------- ------------------------------
Other comprehensive income
Items that are or may be
reclassified
to profit or loss
Exchange differences on
translation
of foreign operations (330) (852) (699) (159)
Total comprehensive income for
the
period (79) 12,529 (4,717) 20,839
--------------- ------------ --------- ------------------------------
Profit (loss) attributable to:
Owners of the Company (513) 11,378 (5,542) 17,318
Non-controlling interests 764 2,003 1,524 3,680
--------------- ------------ --------- ------------------------------
Profit (loss) for the period 251 13,381 (4,018) 20,998
--------------- ------------ --------- ------------------------------
Total comprehensive income
attributable
to:
Owners of the Company (843) 10,526 (6,241) 17,159
Non-controlling interests 764 2,003 1,524 3,680
--------------- ------------ --------- ------------------------------
Total comprehensive (loss)
income
for the period (79) 12,529 (4,717) 20,839
--------------- ------------ --------- ------------------------------
(Loss) earnings per share
(cents)
Basic (0.6) 87.7 (30.8) 132.3
Diluted (0.6) 87.7 (30.8) 132.3
Adjusted earnings (loss) per
share
(cents)
Basic 10.0 56.2 (17.3) 118.8
Dividends paid per share (cents) 14.0 14.0 28.0 28.0
--------------------------------- --------------- ------------ --------- ------------------------------
Summarised Consolidated Statements of Financial Position (Unaudited)
($'000's) As at Jun-30 Dec-31
2023 2022
Total non-current assets 269,286 196,764
Inventories 18,454 18,334
Prepayments 3,940 3,693
Trade and other receivables 8,560 9,185
Income tax receivable 103 40
Cash and cash equivalents 12,785 6,735
Derivative financial assets 763 440
--------
Total assets 313,891 235,191
----------------- --------
Total non-current liabilities 13,779 9,291
Loan notes payable - short term portion 771 7,104
Lease liabilities - short term portion 136 132
Trade and other payables 17,161 17,454
Income tax payable 2,511 1,324
Cash-settled share-based payments -
short term portion 660 1,188
Overdraft 15,692 5,239
--------
Total liabilities 50,710 41,732
----------------- --------
Total equity 263,181 193,459
----------------- --------
Total equity and liabilities 313,891 235,191
-------------------------------------------------- ----------------- --------
Condensed Consolidated Statements of Cash Flows (Unaudited)
($'000's)
3 months ended 6 months ended
June 30 June 30
2023 2022 2023 2022
Cash inflow from operations 2 18,341 666 30,185
Interest received 4 2 9 3
Net finance costs paid (1,231) (61) (1,431) (92)
Tax paid (1,001) (1,567) (2,346) (3,226)
--------------- ---------- ---------- ----------
Net cash (outflow)/inflow from operating
activities (2,226) 16,715 (3,102) 26,870
Cash flows used in investing activities
Acquisition of property, plant and equipment (6,009) (13,011) (10,602) (22,745)
Acquisition of exploration and evaluation
assets (139) (412) (283) (636)
Acquisition of put options (811) (176) (811) (176)
--------------- ---------- ---------- ----------
Net cash used in investing activities (6,959) (13,599) (11,696) (23,557)
Cash flows from financing activities
Dividends paid (2,893) (2,700) (5,317) (4,488)
Payment of lease liabilities (35) (39) (72) (79)
Repayments gold loan - (3,698) - (3,698)
Shares issued - equity raise (net of
transaction cost) 4,834 - 15,658 -
Loan note instruments - Motapa payment (1,288) - (6,687) -
Loan note instruments - Solar bond issue
receipts 2,500 - 7,000 -
Net cash from/(used in) from financing
activities 3,118 (6,437) 10,582 (8,265)
Net decrease in cash and cash equivalents (6,067) (3,321) (4,216) (4,952)
Effect of exchange rate fluctuations
on cash and cash equivalents (30) (247) (187) (451)
Net cash and cash equivalents at beginning
of the period 3,190 14,430 1,496 16,265
--------------- ---------- ---------- ----------
Net cash and cash equivalents at end
of the period (2,907) 10,862 (2,907) 10,862
--------------------------------------------------- --------------- ---------- ---------- ----------
[1] Non-IFRS measures such as "on-mine cost per ounce", "all-in
sustaining cost per ounce" and "adjusted EPS" are used throughout
this announcement. Refer to section 10 of the MD&A for a
discussion of non-IFRS measures.
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END
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