REG - Caledonia Mining Crp - Results for the quarter ended September 30, 2021
11/11/2021 07:00
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RNS Number : 9965R Caledonia Mining Corporation PLC 11 November 2021
Caledonia Mining Corporation Plc
Results for the quarter ended September 30, 2021
(NYSE AMERICAN: CMCL; AIM: CMCL)
November 11, 2021: Caledonia Mining Corporation Plc ("Caledonia" or the
"Company") announces its operating and financial results for the quarter and
the nine months ended September 30, 2021 (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 have been filed on SEDAR.
Financial Highlights for the Quarter
· Gross revenues of $33.5 million, a 31.9 per cent increase on the
$25.4 million achieved in the third quarter of 2020 ("Q3 2020").
· Gross profit of $15.7 million, a 25.6 per cent increase on the $12.5
million in Q3 2020, due to higher production and lower cost per ounce offset
in the Quarter by a lower gold price.
· EBITDA of $15.1 million, a 30 per cent increase on the $11.7 million
in Q3 2020 at a margin of 45 per cent (Q3 2020: 46 per cent).
· The on-mine cost per ounce 1 decreased 8% from $758 in Q3 2020 to
$695 due to higher production which spread fixed costs over more production
ounces.
· The all-in sustaining cost per ounce decreased 19% from $1,119 in Q3
2020 to $909. This reflects the decrease in on-mine cost per ounce and reduced
sustaining capex.
· Basic IFRS earnings per share ("EPS") increased by 56 per cent from
36.6 cents in Q3 2020 to 57.1 cents.
· Adjusted EPS increased by 102 per cent from 34.1 cents in Q3 2020 to
68.9 cents.
· Net cash from operating activities of $7.1 million (Q3 2020: $5.3
million) due to higher operating profit offset by higher working capital.
· Net cash and cash equivalents of $13.0 million (Q3 2020: $21.6
million).
· In October 2021, the Company declared and paid a quarterly dividend
of 14 cents per share. This was the seventh increase in the quarterly
dividend since October 2019 and more than double the 6.875 cents declared only
two years ago in October 2019
Operating Highlights
· 18,965 ounces of gold produced in the Quarter (Q3 2020: 15,155
ounces) which is a new quarterly production record for Blanket and reflects
the contribution of Central Shaft.
· 48,872 ounces produced in the Nine Months, a 14 per cent increase on
the 42,887 ounces produced in the first nine months of 2020.
Outlook
· Production guidance for the year to December 31, 2021 has been
narrowed at the top end of previous guidance at 65,000 to 67,000 ounces.
· Due to, inter alia, historic delays in the completion of the Central
Shaft arising from COVID-19, the need to remediate the poor electricity supply
from the Zimbabwe Electricity Supply Authority, and an upgrade to the workers'
village to accommodate a larger workforce, capital expenditure at Blanket in
2022 is now expected to be $27million.
· Caledonia has completed the purchase of the mining claims at
Maligreen in the Zimbabwe midlands.
· Caledonia continues to evaluate Connemara North, in respect of which
it has an option to purchase.
· The Company will consider further investment opportunities in
Zimbabwe and elsewhere.
Steve Curtis, Chief Executive Officer, commented:
"This has been another excellent quarter: record quarterly production of
almost 19,000 ounces signifies the contribution that Central Shaft is already
making. The commissioning and subsequent ramp-up of activity at Central Shaft
met our best expectations and we have therefore been able to narrow our
production guidance to the top end of our previous range. We remain on track
to hit our 80,000 ounce target from 2022 onwards 2 .
"Revenue in the Quarter was 32 per cent higher than in Q3 2020 due to a 42 per
cent increase in the quantity of gold produced and sold offset by a 7 per cent
decrease in the average realised gold price. Net cash generated by
operations in the Quarter was $7.1 million, compared to $5.3 million in Q3
2020. The increase was due to higher gross profit (due to increased production
and lower costs per ounce), offset by increased working capital.
"The completion of Central Shaft and the resultant increase in production
means that Caledonia can execute other areas of its growth strategy, such as
the agreement to acquire Maligreen which was announced during the quarter,
which has an estimated inferred resource of 940,000 ounces of gold in 15.6
million tonnes at a grade of 1.88 grammes per tonne 3 . This transaction was
completed after the end of the Quarter .
"In October 2021, the Company declared and paid an increased dividend of 14
cents per share. This was the seventh increase in the quarterly dividend since
October 2019 and an increase of 104 per cent from 6.875 cents in October 2019.
These dividend increases reflect the strong financial and operating
performance of the business. The board will continue to review Caledonia's
future dividend distributions as appropriate.
"In October, the advance dividend loan account due from the Gwanda Community
Share Ownership Trust ("GCSOT"), a 10 per cent shareholder in Blanket, was
repaid. Henceforth GCSOT will receive its full entitlement to 10 per cent of
dividends paid by Blanket. Investment in our local communities and employees
(who also hold a 10 per cent shareholding in the mine through an employee
trust) is key to a successful business and I am therefore delighted that the
loan to the GCSOT is now fully repaid and that the community will start to
receive its full dividend amount.
"Caledonia's immediate strategic focus following the commissioning of the
Central Shaft project earlier this year is to increase production, reduce
operating costs and increase the flexibility to undertake further development
and exploration, thereby safeguarding and enhancing Blanket's long-term
future."
For further information please contact:
Caledonia Mining Corporation Plc
Mark Learmonth Tel: +44 1534 679 802
Camilla Horsfall Tel: +44 7817 841793
WH Ireland
Adrian Hadden/ Andrew De Andrade Tel: +44 20 7220 1751
Blytheweigh Financial PR
Tim Blythe/Megan Ray Tel: +44 207 138 3204
3PPB
Patrick Chidley Tel: +1 917 991 7701
Paul Durham Tel: +1 203 940 2538
Curate Public Relations (Zimbabwe)
Debra Tatenda Tel: +263 77802131
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
(in thousands of United States Dollars, unless indicated otherwise)
Unaudited
For the Three months ended Nine months ended
September 30, September 30,
2021 2020 2021 2020
Revenue 33,496 25,359 89,193 71,874
Less: Royalty (1,679) (1,271) (4,471) (3,599)
Production costs (13,729) (10,399) (38,948) (32,537)
Depreciation (2,351) (1,143) (5,743) (3,457)
Gross profit 15,737 12,546 40,031 32,281
Other income 12 27 42 4,736
Other expenses (1,254) (305) (5,395) (1,827)
Administrative expenses (1,906) (2,539) (5,261) (5,361)
Cash-settled share-based expense (243) (231) (426) (1,177)
Net foreign exchange gain 413 985 341 4,694
Fair value gains (losses) on derivative assets - 27 (107) (121)
Operating profit 12,759 10,510 29,225 33,225
Finance income 4 4 11 36
Finance cost (17) (91) (365) (390)
Profit before tax 12,746 10,423 28,871 32,871
Tax expense (4,423) (4,993) (11,318) (11,410)
Profit for the period 8,323 5,430 17,553 21,461
Other comprehensive income
Items that are or may be reclassified to profit or loss
Exchange differences on translation of foreign operations (330) (88) (149) (1,146)
Total comprehensive income for the period 7,993 5,342 17,404 20,315
Profit attributable to:
Owners of the Company 6,939 4,433 14,183 17,807
Non-controlling interests 1,384 997 3,370 3,654
Profit for the period 8,323 5,430 17,553 21,461
Total comprehensive income attributable to:
Owners of the Company 6,609 4,345 14,034 16,661
Non-controlling interests 1,384 997 3,370 3,654
Total comprehensive income for the period 7,993 5,342 17,404 20,315
Earnings per share
Basic earnings per share ($) 0.57 0.37 1.15 1.50
Diluted earnings per share ($) 0.57 0.37 1.15 1.50
Condensed consolidated statements of financial position
(Unaudited) (in thousands of United States Dollars, unless indicated
otherwise)
As at September 30, December 31,
2021 2020
Assets
Property, plant and equipment 142,965 126,479
Exploration and evaluation asset 4,354 6,768
Deferred tax asset 102 87
Total non-current assets 147,421 133,334
Inventories 18,134 16,798
Prepayments 7,110 1,974
Trade and other receivables 11,828 4,962
Income tax receivable 27 76
Derivative financial assets - 1,184
Cash and cash equivalents 13,213 19,092
Assets held for sale - 500
Total current assets 50,312 44,586
Total assets 197,733 177,920
Equity and liabilities
Share capital 74,696 74,696
Reserves 138,161 138,310
Retained loss (61,673) (71,487)
Equity attributable to shareholders 151,184 141,519
Non-controlling interests 18,649 16,524
Total equity 169,833 158,043
Liabilities
Provisions 3,427 3,567
Deferred tax liabilities 8,699 4,234
Cash-settled share-based payment - long term portion 931 1,934
Lease liabilities - long term portion 260 178
Total non-current liabilities 13,317 9,913
Loans and borrowings 70 408
Cash-settled share-based payment - short term portion 1,768 336
Lease liabilities - short term portion 103 61
Income taxes payable 1,919 495
Trade and other payables 10,520 8,664
Overdraft 203 -
Total current liabilities 14,583 9,964
Total liabilities 27,900 19,877
Total equity and liabilities 197,733 177,920
Condensed consolidated statements of cash flows
(in thousands of United States Dollars, unless indicated otherwise)
Unaudited
For the Three months ended Nine months ended
September 30, September 30,
2021 2020 2021 2020
Cash generated from operations 9,338 7,393 26,875 23,764
Interest received - 4 7 36
Interest paid (50) (78) (304) (373)
Tax paid (2,176) (2,048) (4,774) (4,082)
Net cash from operating activities 7,112 5,271 21,804 19,345
Cash flows used in investing activities
Acquisition of property, plant and equipment (8,564) (8,007) (22,332) (15,928)
Acquisition and expenditure on exploration and evaluation assets (449) - (1,423) -
Proceeds on disposal of assets held for sale 500 - 500 -
Realisation (purchase) of derivative financial asset - - 1,082 (1,058)
Proceeds from disposal of subsidiary - - 340 900
Net cash used in investing activities (8,513) (8,007) (21,833) (16,086)
Cash flows from financing activities
Dividends paid (2,108) (1,129) (5,614) (3,110)
Term loan repayments (100) - (306) -
Payment of lease liabilities (31) (30) (96) (87)
Shares issued - equity raise (net of transaction cost) - 12,538 - 12,538
Share options exercised - - - 30
Net cash (used in) from financing activities (2,239) 11,379 (6,016) 9,371
Net (decrease) / increase in cash and cash equivalents (3,640) 8,643 (6,045) 12,630
Effect of exchange rate fluctuations on cash held (19) 1,280 (37) 39
Net cash and cash equivalents at the beginning of the period 16,669 11,639 19,092 8,893
Net cash and cash equivalents at the end of the period 13,010 21,562 13,010 21,562
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 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
(www.sedar.com (http://www.sedar.com) ) on May 26, 2021. Mr Dana Roets (B Eng
(Min.), MBA, Pr.Eng., FSAIMM, AMMSA), Chief Operating Officer, is the
Company's qualified person as defined by Canada's National Instrument 43-101
and has approved any scientific or technical information contained in this
news release.
3 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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