REG - Caledonia Mining Crp - Results for the Quarter ended June 30, 2023
10/08/2023 07:00
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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 (#_ftn1) 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
(https://caledoniamining.zoom.us/j/92451532646?pwd=Yis5cWJSUGZCNEZjM2lpZHgyMUFOQT09)
lpZHgyMUFOQT09
(https://caledoniamining.zoom.us/j/92451532646?pwd=Yis5cWJSUGZCNEZjM2lpZHgyMUFOQT09)
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)
Lloyd Mlotshwa Tel: +263 (242) 745 119/33/39
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 June 30 6 months ended 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 June 30 6 months ended 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 (#_ftnref1) 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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