REG - Caledonia Mining Crp - Results for the quarter ended September 30, 2023
14/11/2023 07:15
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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 (#_ftn1)
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 (#_ftn2) 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
· Maintain production at Blanket at the targeted range of 75,000 - 80,000
ounces for 2023 and at a similar level in 2024.
· Continue deep level drilling at Blanket with the objective of further
upgrading inferred mineral resources, thereby extending the life of mine.
· Complete 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.
· Commence 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
(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)
Adrian Hadden Tel: +44 207 397 1965
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
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 September 30 9 months ended 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)
($'000's) As at Sep-30 Dec-31
2023 2022
Total non-current assets 265,813 196,764
Inventories 18,826 18,334
Prepayments 5,093 3,693
Trade and other receivables 5,749 9,185
Income tax receivable - 40
Cash and cash equivalents 10,775 6,735
Derivative financial assets 684 440
Assets held for sale 13,397 -
Total assets 320,337 235,191
Total non-current liabilities 18,211 9,291
Loan notes payable - short term portion 665 7,104
Lease liabilities - short term portion 138 132
Trade and other payables 17,459 17,454
Income tax payable 2,841 1,324
Cash-settled share-based payments - short term portion 674 1,188
Derivative financial liabilities 22 -
Overdraft 13,967 5,239
Total liabilities 53,977 41,732
Total equity 266,360 193,459
Total equity and liabilities 320,337 235,191
Condensed Consolidated Statements of Cash Flows (Unaudited)
($'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 (net of transaction cost) - - 15,658 -
Loan note instruments - Motapa payment (563) - (7,250) -
Loan note instruments - Solar bond issue receipts (net of transaction cost) - - 7,000 -
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 (#_ftnref1) Adjusted EBITDA excludes asset impairments, depreciation and
net foreign exchange movements.
2 (#_ftnref2) 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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