REG - Caledonia Mining Crp - Results for the Quarter ended June 30, 2022
11/08/2022 07:00
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RNS Number : 6140V Caledonia Mining Corporation PLC 11 August 2022
Caledonia Mining Corporation Plc
Results for the Quarter ended June 30, 2022
(NYSE AMERICAN: CMCL; AIM: CMCL)
August 11, 2022: Caledonia Mining Corporation Plc ("Caledonia" or the
"Company") announces its operating and financial results for the quarter and
the six months ended June 30, 2022 (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 which have been filed on SEDAR.
Financial Highlights for the Quarter ended June 30, 2022
· Gross revenues of $36.99 million, a 23.4 per cent increase on the
$29.98 million achieved in the second quarter of 2021 ("Q2 2021").
· Gross profit of $17.9 million, a 28.8 per cent increase on the $13.9
million in Q2 2021.
· EBITDA (excluding asset impairments, depreciation and net foreign
exchange gains) of $17.8 million, a 23.8 per cent increase on the $14.0
million in Q2 2021. This represents EBITDA (excluding asset impairments,
depreciation and net foreign exchange gains) for the six months ended June 30,
2022 of $31.5 million (H1 2021: $23.5 million).
· On-mine cost of $692 per ounce (Q2 2021: $715 per ounce).
· All-in sustaining cost ("AISC") 1 of $925 per ounce (Q2 2021: $901
per ounce). The 3 per cent increase to the comparable quarter reflects the
lower on-mine cost per ounce offset by higher administrative costs.
· Basic IFRS earnings per share ("EPS") of 87.7 cents (Q2 2021: 21.1
cents).
· Adjusted EPS of 56.2 cents (Q2 2021: 62.6 cents).
· Net cash from operating activities of $16.7 million (Q2 2021: $12.7
million).
· Net cash and cash equivalents of $10.9 million (Q2 2021, $16.7
million).
· Total dividend paid in the Quarter of 14 cents per share paid in
April 2022; a further dividend at the same rate of 14 cents per share was paid
in July 2022.
Operating Highlights
· 20,091 ounces of gold were produced in the Quarter, 20 per cent
higher than the 16,710 ounces produced in Q2 2021 and a new production record
for any quarter.
· 38,605 ounces were produced in the First Half, 29 per cent higher
than the 29,907 ounces produced in the first half of 2021.
Other highlights - Transaction to acquire the Bilboes gold project
· On 21 July 2022, Caledonia announced that it had signed an agreement
to purchase Bilboes Gold Limited, the parent company which owns, through its
Zimbabwe subsidiary, the Bilboes gold project in Zimbabwe ("Bilboes" or
the "Project") 2 . Subject to satisfaction of the conditions to completion,
the total consideration for the acquisition will be 5,123,044 Caledonia
shares, representing approximately 28.5 per cent of Caledonia's fully diluted
equity, and a 1 per cent net smelter royalty ("NSR") on the Project's
revenues.
· Bilboes hosts NI 43-101 compliant proven and probable mineral
reserves of 1.96 million ounces of gold in 26.6 million tonnes at a grade of
2.29 g/t, measured and indicated mineral resources of 2.56 million ounces of
gold in 35.2 million tonnes at a grade of 2.26 g/t and inferred mineral
resources of 577,000 ounces of gold in 9.5 million tonnes at a grade of 1.89
g/t 3 .
· The feasibility study which has been prepared by the vendors
indicates the potential for an open-pit gold mine producing an average of
168,000 ounces per year over a 10-year life of mine. Caledonia will prepare a
feasibility study to identify the most judicious way to commercialise the
Project (with regard to the availability of funding on acceptable terms).
Outlook
· Increase production at Blanket Mine ("Blanket") to the target of
80,000 ounces of gold per annum 4 , reduce operating costs and increase the
flexibility to undertake further development and exploration, thereby
safeguarding and enhancing Blanket's long-term future.
· Satisfy the conditions to enable the completion of the acquisition of
Bilboes Gold Limited and, thereafter, prepare a feasibility study to identify
the most judicious way to commercialise the Project with regard to the
availability of funding on acceptable terms.
· Restart the oxides operation at Bilboes under the terms of a tribute
arrangement with a view to creating a cash-generative operation within
approximately six months.
· Upgrade the NI 43-101 compliant inferred mineral resources at the
Maligreen mining claims which are currently estimated to host approximately
940,000 ounces of gold in 15.6 million tonnes at a grade of 1.88g/t 5 .
· Commission the 12MWac solar plant, which is expected to provide 27
per cent of Blanket's total electricity demand.
· Continue to evaluate other investment opportunities in the Zimbabwe
gold sector and elsewhere.
Commenting on the announcement, Mark Learmonth, Chief Executive Officer, said:
"This has been a terrific quarter and, indeed, half year with second quarter
production of just over 20,000 ounces which set a record for any quarter. The
first half of 2022 exceeded our expectations and we have now achieved our
quarterly production target. Excellent production, along with a higher gold
price and good cost control, has contributed to a 321% increase in IFRS
earnings per share and a 31% increase in net cash from operating activities
over the comparable quarter in 2021.
"In July, Caledonia announced that it had signed an agreement to
purchase Bilboes Gold Limited, which is the holding company for a large,
high-grade, open-pittable gold resource. We have followed the progress of the
project for several years and believe that Bilboes is the premier gold
development project in Zimbabwe, and indeed one of the best gold development
projects in Africa.
"The completion of the transaction is subject to several conditions, but once
achieved we can prepare a feasibility study to identify the most judicious way
to commercialise the project with regard to the availability of funding on
acceptable terms. Caledonia also intends to re-start the oxides operation at
Bilboes under a tribute arrangement before completion of the transaction with
a view to creating a cash-generative operation within approximately six
months.
"Our immediate strategic focus continues to be on Blanket and we are on track
to meet our target production of between 73-80,000 ounces of gold for this
year, with first half production of 38,605 ounces of gold. We will also
continue to reduce our operating costs and increase the flexibility to
undertake further development and exploration, thereby safeguarding and
enhancing Blanket's long-term future.
"The proposed acquisition of Bilboes also builds on the recent acquisition of
the Maligreen claims, where we continue to evaluate the existing geological
information and are focused on increasing the confidence of the resource base.
Caledonia will also consider other investment opportunities in the Zimbabwe
gold sector within the constraints of its financing and management capacity.
"2022 has been an outstanding year so far and I would like to thank the team
for their continued hard work."
Caledonia will host an online presentation and Q&A session open to all
investors on 12 August 2022 at 14:00 London Time
The Zoom details for this call are set out below.
Topic: Q2 2022 Results Call for Shareholders.
Please click the link below to join the webinar:
https://caledoniamining.zoom.us/j/95386976088?pwd=NDV4OFFaU2syMnNzeG42Y2FUcGswUT09
(https://caledoniamining.zoom.us/j/95386976088?pwd=NDV4OFFaU2syMnNzeG42Y2FUcGswUT09)
Webinar ID: 953 8697 6088
Passcode: 147538
International numbers available: https://caledoniamining.zoom.us/u/afz
(https://caledoniamining.zoom.us/u/afzb3xKSY) b3xKSY
(https://caledoniamining.zoom.us/u/afzb3xKSY)
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 Statement of Profit or Loss and Other Comprehensive
Income (unaudited)
($'000's) 3 months ended 6 months ended
June 30 Ju
ne
30
2021 2022 2021 2022
Revenue 29,977 36,992 55,697 72,064
Royalty (1,503) (1,854) (2,792) (3,612)
Production costs (12,362) (14,502) (25,219) (28,861)
Depreciation (2,199) (2,639) (3,392) (4,702)
Gross profit 13,913 17,997 24,294 34,889
Other income 7 1 30 3
Other expenses (3,883) (490) (4,141) (1,283)
Administrative expenses (1,745) (2,908) (3,355) (5,279)
Net foreign exchange (loss)/gain (345) 4,172 (72) 5,081
Cash-settled share-based expense (31) 57 (183) (310)
Equity-settled share-based expense - - - (82)
Derivative financial instrument gain/(expense) 7 41 (107) (1,697)
Operating profit 7,923 18,870 16,466 31,322
Net finance costs (223) (175) (341) (291)
Profit before tax 7,700 18,695 16,125 31,031
Tax expense (3,893) (5,314) (6,895) (10,033)
Profit for the period 3,807 13,381 9,230 20,998
Other comprehensive income
Items that are or may be reclassified to profit or loss
Exchange differences on translation of foreign operations 383 (852) 181 (159)
Total comprehensive income for the period 4,190 12,529 9,411 20,839
Profit attributable to:
Owners of the Company 2,694 11,378 7,244 17,318
Non-controlling interests 1,113 2,003 1,986 3,680
Profit for the period 3,807 13,381 9,230 20,998
Total comprehensive income attributable to:
Owners of the Company 3,077 10,526 7,425 17,159
Non-controlling interests 1,113 2,003 1,986 3,680
Total comprehensive income for the period 4,190 12,529 9,411 20,839
Earnings per share (cents)
Basic 21.1 87.7 58.4 132.3
Diluted 21.1 87.7 58.4 132.3
Adjusted earnings per share (cents)
Basic 62.6 56.2 114.2 118.8
Dividends declared per share (cents) 12.0 14.0 23.0 28.0
Condensed Consolidated Statement of Cash Flows (unaudited)
($'000's)
3 months ended 6 months ended
June 30 June 30
2021 2022 2021 2022
Cash flows from operating activities
Cash generated from operations 14,987 18,341 17,537 30,185
Interest paid (124) (59) (247) (89)
Tax paid (2,134) (1,567) (2,598) (3,226)
Net cash from operating activities 12,729 16,715 14,692 26,870
Cash flows used in investing activities
Acquisition of property, plant and equipment (7,425) (13,011) (13,769) (22,745)
Acquisition of exploration and evaluation assets (784) (412) (974) (636)
Realisation of Gold ETF 1,083 - 1,083 -
Proceeds from disposal of subsidiary - - 340 -
Net cash used in investing activities (7,126) (13,423) (13,320) (23,381)
Cash flows from financing activities
Dividends paid (1,814) (2,700) (3,506) (4,488)
Repayment of gold loan - (3,698) - (3,698)
Acquisition of call option - (176) - (176)
Term loan repayments (102) - (206) -
Payment of lease liabilities (33) (39) (65) (79)
Net cash used in financing activities (1,949) (6,613) (3,777) (8,441)
Net increase/(decrease) in cash and cash equivalents 3,654 (3,321) (2,404) (4,952)
Effect of exchange rate fluctuations on cash and cash equivalents (12) (247) (18) (451)
Net cash and cash equivalents at beginning of the period 13,027 14,430 19,092 16,265
Net cash and cash equivalents at end of the period 16,669 10,862 16,669 10,862
Summarised Consolidated Statements of Financial Position (unaudited)
($'000's) As at Dec 31 Jun 30
2021 2022
Total non-current assets 157,944 179,354
Inventories 20,812 20,535
Prepayments 6,930 3,518
Trade and other receivables 7,938 7,748
Income tax receivable 101 182
Cash and cash equivalents 17,152 10,862
Total assets 210,877 222,199
Total non-current liabilities 12,633 7,256
Lease liabilities - short term portion 134 127
Trade and other payables 9,957 12,761
Derivative financial liabilities 3,095 122
Income tax payable 1,562 3,327
Overdraft 887 -
Cash-settled share-based payments - short term portion 2,053 813
Total liabilities 30,321 24,405
Total equity 180,556 197,793
Total equity and liabilities 210,877 222,199
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.
2 See press release dated July 21, 2022 entitled "Transaction to acquire the
Bilboes gold project in Zimbabwe".
3 Refer to the technical report entitled "BILBOES GOLD PROJECT FEASIBILITY
STUDY" dated with effective date 15 December 2021 prepared by DRA Projects
Africa Holdings (Pty) Ltd and filed by the Company on SEDAR (www.sedar.com) on
July 21, 2022.
4 Refer to the technical report entitled "Caledonia Mining Corporation Plc
NI 43-101 Technical Report on the Blanket Gold Mine, Zimbabwe" dated May 17,
2021 prepared by Minxcon (Pty) Ltd and filed by the Company on SEDAR on May
26, 2021.
5 Refer to technical report entitled "Caledonia Mining Corporation Plc NI
43-101 Mineral Resource Report on the Maligreen Gold Project, Zimbabwe" by
Minxcon (Pty) Ltd dated November 2, 2021 and filed on SEDAR on November 5,
2021.
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