TIDMCMCL
RNS Number : 3053T
Caledonia Mining Corporation PLC
14 November 2023
Caledonia Mining Corporation Plc
Results for the quarter and nine months ended September 30,
2023
(NYSE AMERICAN: CMCL; AIM: CMCL; VFEX: CMCL)
St Helier, November 14, 2023: Caledonia Mining Corporation Plc
("Caledonia" or the "Company") announces its operating and
financial results for the quarter and the nine months ended
September 30, 2023 (the "Quarter" and "nine months" respectively).
Further information on the financial and operating results for the
Quarter and nine months 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 are being filed on
SEDAR.
This Quarter's results demonstrate a significant improvement in
the production performance of Blanket Mine ("Blanket"), which
reported record quarterly production. This Quarter was also the
last quarter to be affected by the negative contribution from the
Bilboes oxide mine prior to being placed on care and maintenance
from 1 October 2023. This will reduce monthly costs from
approximately $1 million to approximately $200,000 at Bilboes.
Financial Highlights
-- Revenues in the Quarter of $41.2 million, a record quarterly
performance for the Group. Nine months' revenue of $107.7 million
is in line with the prior year performance.
-- Gross profit in the Quarter of $14.1 million and EBITDA [1]
of $15.5 million, 2.5 per cent lower than the $15.9 million in the
third quarter of 2022 ("Q3 2022" or the "comparative quarter")
.
-- Consolidated on-mine cost per ounce for the Quarter of $928
(Q3 2022: $734 per ounce). The increase was mainly due to the high
cost per ounce at the Bilboes oxide mine, which has subsequently
been placed on care and maintenance. On-mine costs at Blanket were
$817 per ounce, an 11.3 per cent increase from the comparative
quarter with the increase being due to higher labour and
electricity costs.
-- All-in sustaining cost ("AISC") at Blanket for the Quarter
was $1,171 per ounce (Q3 2022: $962), the increase being due to the
higher on-mine cost per ounce and higher sustaining capital
expenditure and administrative expenses. The group's AISC for the
Quarter was higher, at $1,268 per ounce, reflecting the costs of
Bilboes which have now materially reduced having entered care and
maintenance.
-- Basic IFRS earnings per share ("EPS") for the Quarter of 24.1 cents (Q3 2022: 65.4 cents).
-- Adjusted EPS [2] for the Quarter of 33.0 cents (Q3 2022: 60.7 cents).
-- Net cash from operating activities in the Quarter of $14.5 million (Q3 2022: $8.9 million).
-- Net debt at the end of the Quarter of $3.2 million (Q3 2022:
net cash $6.2 million. Q2 2023: net debt $2.9 million).
Notwithstanding the very strong operating cash flow in the Quarter,
net cash and cash equivalents decreased in the Quarter due to the
negative cash flows at the Bilboes oxides mine and the continued
high level of capital investment at Blanket, principally on a new
tailings storage facility.
-- A dividend of 14 cents per share was paid in July 2023; a
further dividend at the same rate of 14 cents per share was paid in
October 2023, being the 40(th) quarterly dividend paid by the
Company since it began paying dividends in 2013.
Operating Highlights
-- 21,772 ounces of gold were produced at Blanket in the
Quarter, three per cent higher than the 21,120 ounces produced in
Q3 2022 and a new quarterly production record.
-- Gold produced at Blanket in the nine months was 55,244 ounces.
-- Caledonia reiterates its gold production guidance for 2023 of
between 75,000 and 80,000 ounces at Blanket.
Bilboes gold project
-- Mining and metallurgical processing continued at the Bilboes
oxide mine until the end of September after which the operation
returned to care and maintenance, resulting in a substantial
reduction in monthly costs from approximately $1 million to
approximately $200,000. After taking account of revenues arising
from the sale of gold that will be extracted from the heap leach,
Bilboes is expected to operate on a break-even basis for the
remainder of the year.
-- 1,151 ounces of gold were produced from the Bilboes oxide
mine in the Quarter, showing an increase from the 1,076 ounces
produced in the second quarter of 2023. Leaching of material that
has already been deposited on the leach pad will continue for the
remainder of 2023.
-- Oxide mining will resume when the stripping of the waste for the sulphide project commences.
-- Work continues on a revised feasibility study for the Bilboes
sulphide project with a focus on capital allocation with a view to
maximising future shareholder value. This may result in a phased
approach to the project to reduce the initial capital requirement.
A phased approach requires a completely new approach to the
feasibility study (rather than an update to the existing
feasibility study); the initial results of the work on the phased
approach are expected in early 2024.
Other
-- On August 7, 2023, an accident took place at Blanket and, as
a result, an employee of GMG Pty Ltd, a company contracted to
Blanket, succumbed to his injuries in hospital. Caledonia and
Blanket express their sincere condolences to the family and
colleagues of the deceased.
-- The ongoing underground drilling program at Blanket targeted
the Eroica ore body and has yielded encouraging results (as
announced on July 10, 2023).
-- Following a tender process, the Company received an offer
from a global solar operator to buy the solar plant. It is proposed
that the new owner exclusively supplies Blanket with electricity
from the current plant, on a take-or-pay basis, and in doing so
secures some of Blanket's future power supply. Negotiation of
contracts and commercial terms is continuing.
-- The Environmental Impact Assessment at Motapa has been
approved as a precursor to the start of on-the-ground exploration
activities.
Strategy and Outlook: increased focus on growth
opportunities
-- M aintain production at Blanket at the targeted range of
75,000 - 80,000 ounces for 2023 and at a similar level in 2024
.
-- C ontinue deep level drilling at Blanket with the objective
of further upgrading inferred mineral resources, thereby extending
the life of mine .
-- C omplete the feasibility study on the Bilboes sulphide
project to determine the best implementation strategy with a view
to optimal capital allocation and to estimate the revised funding
requirements .
-- C ommence the first phase of exploration at Motapa.
Commenting on the announcement, Mark Learmonth, Chief Executive
Officer, said:
"Production at Blanket in the Quarter was excellent: Blanket is
now operating as expected having achieved record gold production in
the Quarter. Management is exploring initiatives to further improve
mining efficiencies and manage operating costs.
"The Bilboes oxide mine has been a disappointment and as a
result of operating losses incurred at Bilboes it has been returned
to care and maintenance with effect from 1 October; from October
onwards, the monthly holding cost of Bilboes is expected to be
significantly reduced to approximately $200,000 per month. 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 solar plant which was commissioned in early 2023 continues
to operate well. The solar plant is owned by Caledonia rather than
by Blanket and therefore the economic benefit arising from the
solar plant has been realised in the consolidated all-in sustaining
cost rather than the on-mine cost. An offer has been received from
a global solar operator to buy the solar plant and the sale process
is underway.
"As previously announced, encouraging results were received
during the Quarter from the ongoing underground drilling program at
Blanket which currently targets the Eroica ore body. Initial
results indicate that the Eroica ore body has better grades and
widths than expected. These results indicate that there is
additional mineralisation that may, in due course, be accessed
using the current infrastructure and which should further extend
the life of mine. Blanket continues to provide a solid foundation
for the Company, providing us with a platform for our other growth
projects in Zimbabwe.
"We continue to work on a revised feasibility study for the
sulphide project at Bilboes which will consider updated commercial
assumptions and will inform the most judicious way to commercialise
the project with the objective of providing the best returns for
investors. I look forward to providing an update on our progress in
due course."
Caledonia will host an online presentation and Q&A session
open to all investors on 16 November at 14.00 London Time
The zoom details are set out below:
When: Nov 16, 2023 02:00 PM London
Topic: Q3 2023 call for shareholders
Register in advance for this webinar:
https://caledoniamining.zoom.us/webinar/register/WN_BTWfQYBxSnOrfd2uh623KQ
After registering, you will receive a confirmation email
containing information about joining the webinar.
Enquiries:
Caledonia Mining Corporation Plc
Mark Learmonth Tel: +44 1534 679 800
Camilla Horsfall Tel: +44 7817 841 793
Cavendish Capital Markets Limited
(Nomad and Joint Broker) Tel: +44 207 397 1965
Adrian Hadden Tel: +44 131 220 9775
Pearl Kellie
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
Lloyd Mlotshwa 119/33/39
The information contained within this announcement is deemed by
the Company to constitute inside information under 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, the satisfaction of all conditions precedent in
connection with the acquisition of Bilboes, the completion of the
acquisition and the issuance of the acquisition consideration, our
plans regarding a new feasibility study for Bilboes, the restarting
of the Bilboes oxides operation, our plans and timing regarding
further exploration and development and the commissioning of the
solar plant. The forward-looking information contained in this news
release 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: the establishment
of estimated resources and reserves, the grade and recovery of
minerals which are mined varying from estimates, success of future
exploration and drilling programs, reliability of drilling,
sampling and assay data, the representativeness of mineralization
being accurate, success of planned metallurgical test-work, capital
availability and accuracy of estimated operating costs, obtaining
required governmental, environmental or other project approvals,
inflation, changes in exchange rates, fluctuations in commodity
prices, delays in the development of projects and Caledonia's
experience of project development in Zimbabwe and other
factors.
To the extent any forward-looking information herein constitutes
a financial outlook or future oriented financial information,
any such statement is made as of the date hereof and included
herein to provide prospective investors with an understanding of
the Company's plans and assumptions. 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 the completion of the acquisition of Bilboes, 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.
National Instrument 43-101 - Standards of Disclosure for Mineral
Projects ("NI 43-101") is a rule of the Canadian Securities
Administrators which establishes standards for all public
disclosure an issuer makes of scientific and technical information
concerning mineral projects. Unless otherwise indicated, all
reserves and resource estimates contained in this press release
have been prepared in accordance with NI 43-101 and the Canadian
Institute of Mining, Metallurgy and Petroleum Classification
System. These standards differ from the requirements of the U.S.
Securities and Exchange Commission (the "SEC"), and reserve and
resource information contained in this press release may not be
comparable to similar information disclosed by U.S. companies. The
requirements of NI 43-101 for identification of reserves and
resources are also not the same as those of the SEC, and any
reserves or resources reported in compliance with NI 43-101 may not
qualify as "reserves" or "resources" under SEC standards.
Accordingly, the mineral reserve and resource information set forth
herein may not be comparable to information made public by
companies that report in accordance with United States
standards.
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 9 months ended
September 30 September 30
2023 2022 2023 2022
Revenue 41,187 35,840 107,653 107,904
Royalty (2,207) (1,796) (5,650) (5,408)
Production costs (20,452) (15,802) (61,028) (44,663)
Depreciation (4,385) (2,670) (10,049) (7,372)
--------------- --------------- --------------- --------------
Gross profit 14,143 15,572 30,926 50,461
Other income 62 14 127 17
Other expenses (701) (552) (2,800) (1,835)
Administrative expenses (2,889) (2,789) (11,890) (8,068)
Net foreign exchange (loss) gain (257) 1,559 (2,334) 6,640
Cash-settled share-based expense (27) (25) (298) (335)
Equity-settled share-based expense (233) (94) (564) (176)
Net derivative financial instrument
expenses (102) 537 (590) (1,160)
--------------- --------------- --------------- --------------
Operating profit 9,996 14,222 12,577 45,544
Net finance costs (508) (9) (2,332) (300)
--------------- --------------- --------------- --------------
Profit before tax 9,488 14,213 10,245 45,244
Tax expense (3,777) (4,018) (8,552) (14,051)
--------------- --------------- --------------- --------------
Profit for the period 5,711 10,195 1,693 31,193
--------------- --------------- --------------- --------------
Other comprehensive income
Items that are or may be reclassified
to profit or loss
Exchange differences on translation
of foreign operations (79) (699) (778) (858)
--------------- --------------- --------------- --------------
Total comprehensive income for the
period 5,632 9,496 915 30,335
--------------- --------------- --------------- --------------
Profit (loss) attributable to:
Owners of the Company 4,506 8,614 (1,036) 25,932
Non-controlling interests 1,205 1,581 2,729 5,261
--------------- --------------- --------------- --------------
Profit for the period 5,711 10,195 1,693 31,193
--------------- --------------- --------------- --------------
Total comprehensive income attributable
to:
Owners of the Company 4,427 7,915 (1,814) 25,074
Non-controlling interests 1,205 1,581 2,729 5,261
--------------- --------------- --------------- --------------
Total comprehensive income for the
period 5,632 9,496 915 30,335
--------------- --------------- --------------- --------------
Earnings (loss) per share (cents)
Basic 24.1 65.4 (6.8) 197.7
Diluted 14.7 65.4 (5.5) 197.7
Adjusted earnings per share (cents)
Basic 33.0 60.7 15.2 178.8
Dividends paid per share (cents) 14.0 14.0 56.0 42.0
------------------------------------------ --------------- --------------- --------------- --------------
Summarised Consolidated Statements of Financial Position (Unaudited)
($'000's) As Sep-30 Dec-31
at
2023 2022
Total non-current assets 265,813 196,764
Inventories 18,826 18,334
Prepayments 5,093 3,693
Trade and other receivables 5,749 9,185
Income tax receivable - 40
Cash and cash equivalents 10,775 6,735
Derivative financial assets 684 440
Assets held for sale 13,397 -
--------- ---------
Total assets 320,337 235,191
--------- ---------
Total non-current liabilities 18,211 9,291
Loan notes payable - short term portion 665 7,104
Lease liabilities - short term portion 138 132
Trade and other payables 17,459 17,454
Income tax payable 2,841 1,324
Cash-settled share-based payments -
short term portion 674 1,188
Derivative financial liabilities 22 -
Overdraft 13,967 5,239
--------- ---------
Total liabilities 53,977 41,732
--------- ---------
Total equity 266,360 193,459
--------- ---------
Total equity and liabilities 320,337 235,191
------------------------------------------------------- --------- ---------
Condensed Consolidated Statements of Cash Flows (Unaudited)
($'000's)
3 months ended 9 months ended
September 30 September 30
2023 2022 2023 2022
Cash inflow from operations 16,963 11,717 17,629 41,901
Interest received 21 7 30 10
Finance costs paid (331) (34) (1,762) (126)
Tax paid (2,158) (2,767) (4,504) (5,993)
--------------- --------- --------- -----------
Net cash inflow from operating
activities 14,495 8,923 11,393 35,792
Cash flows used in investing
activities
Acquisition of property,
plant and equipment (9,573) (10,840) (20,175) (33,585)
Acquisition of exploration
and evaluation assets (597) (311) (880) (947)
Acquisition of put options (1) - (812) -
--------------- --------- --------- -----------
Net cash used in investing
activities (10,171) (11,151) (21,867) (34,532)
Cash flows from financing
activities
Dividends paid (2,801) (2,709) (8,118) (7,197)
Payment of lease liabilities (36) (36) (108) (115)
Repayments gold loan - - - (3,698)
Proceeds from call options - 415 - 239
Shares issued - equity raise - - 15,658 -
(net of transaction cost)
Loan note instruments - Motapa
payment (563) - (7,250) -
Loan note instruments - Solar - - 7,000 -
bond issue receipts (net
of transaction cost)
--------------- --------- --------- -----------
Net cash from/(used in)
financing activities (3,400) (2,330) 7,182 (10,771)
Net decrease in cash and
cash equivalents
Effect of exchange rate fluctuations
on cash and cash equivalents (1,209) (137) (1,396) (587)
Net cash and cash equivalents
at beginning of the period (2,907) 10,862 1,496 16,265
--------------- --------- --------- -----------
Net cash and cash equivalents
at end of the period (3,192) 6,167 (3,192) 6,167
-------------------------------------------------- --------------- --------- --------- -----------
[1] Adjusted EBITDA excludes asset impairments, depreciation and
net foreign exchange movements.
[2] Adjusted EPS excludes net foreign exchange movements
(including the deferred tax effect and the non-controlling interest
thereon) and deferred tax. A reconciliation of IFRS EPS to Adjusted
EPS is set out in section 10.3 of the MD&A.
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