REG - Caledonia Mining Crp - Results for the quarter ended September 30, 2022
10/11/2022 07:00
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RNS Number : 9630F Caledonia Mining Corporation PLC 10 November 2022
Caledonia Mining Corporation Plc
Results for the quarter and nine months ended September 30, 2022
(NYSE AMERICAN: CMCL; AIM: CMCL; VFEX: CMCL)
November 10, 2022: Caledonia Mining Corporation Plc ("Caledonia" or the
"Company") announces its operating and financial results for the quarter and
the nine months ended September 30, 2022 (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 which have been filed on SEDAR.
Financial Highlights
· Gross revenues in the Nine Months of $107.9 million, a 21.0 per cent
increase on the $89.2 million achieved in the first nine months of 2021.
· Gross profit in the Nine Months of $50.5 million, a 26.1 per cent
increase on the $40.0 million achieved in the first nine months of 2021.
· EBITDA in the Quarter (excluding asset impairments, depreciation, and
net foreign exchange gains) of $16.9 million, an 11.8 per cent increase on
the $15.1 million in the third quarter of 2021 ("Q3 2021"). This represents
EBITDA (excluding asset impairments, depreciation, and net foreign exchange
gains) for the Nine Months of $52.9 million (nine months to September 30,
2021: $35.0 million).
· On-mine cost per ounce for the Quarter of $734 (Q3 2021: $695 per
ounce).
· All-in sustaining cost ("AISC") per ounce for the Quarter of $944
(Q3 2021: $870 per ounce). The 8.5 per cent increase compared to Q3 2021 is
due to higher on-mine cost per ounce and higher administrative costs.
· Basic IFRS earnings per share ("EPS") for the Quarter of 66.2
cents (Q3 2021: 57.1 cents).
· Adjusted EPS for the Quarter of 60.7 cents (Q3 2021: 68.9 cents).
· Net cash from operating activities in the Quarter of $8.9
million (Q3 2021: $7.1 million).
· Net cash and cash equivalents at the end of the Quarter of $6.2
million (Q3 2021: $13.0 million).
· Total dividend paid in the Quarter of 14 cents per share paid
in July 2022; a further dividend at the same rate of 14 cents per share was
paid in October 2022.
Operating Highlights
· 21,120 ounces of gold were produced in the Quarter, 11.4 per cent
higher than the 18,965 ounces produced in Q3 2021 and a new quarterly
production record.
· 59,726 ounces were produced in the Nine Months, 22.2 per cent higher
than the 48,872 ounces produced in the first nine months of 2021.
Other highlights
Transaction to acquire the Bilboes gold project
· On July 21, 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"). Subject to satisfaction of the
conditions to completion and to customary adjustments to the purchase price to
account for any extraordinary liabilities incurred before 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.
· The Project has NI43-101 compliant measured and indicated mineral
resources of 2.56 million ounces of gold at a grade of 2.26 g/t and inferred
mineral resources of 576,672 ounces of gold at a grade of 1.89 g/t 1 . This
includes proven and probable mineral reserves of 1.96 million ounces of gold
at a grade of 2.29 g/t.
· 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).
· Caledonia is making progress towards satisfying the outstanding
conditions to complete the transaction: it has received certain approvals
from the Reserve Bank of Zimbabwe, and continues to engage with the
Competition and Tariff Commission, the Ministry of Finance, the Ministry of
Energy and Fidelity Printers and Refiners (Private) Limited regarding further
outstanding approvals.
Acquisition of the Motapa gold exploration project in Zimbabwe
· On November 2, 2022, Caledonia announced that it has
purchased Motapa Mining Company UK Limited, the parent company of
a Zimbabwe subsidiary which holds a registered mining lease over the
Motapa gold exploration property in Southern Zimbabwe ("Motapa"). The
Company made the purchase from Bulawayo Mining Company Limited, a privately
owned UK company.
Updated Mineral Resources and Technical Report for Maligreen
· On November 7, 2022, Caledonia announced an update to the NI 43-101
compliant Mineral Resources statement at the Company's 100% owned Maligreen
project in the Zimbabwe Midlands ("Maligreen") and the publishing of an
updated technical report with an effective date of September 30, 2022 (the
"2022 Technical Report") 2 . The 2022 Technical Report replaces the previous
technical report filed on SEDAR in November 2021 as the current technical
report for the Maligreen project. Since Caledonia acquired the Maligreen
claims in November 2021 it has been focused on reviewing the geological work
conducted at the property with a view to upgrading the Mineral Resources in
2022. In summary, the 2022 Technical Report states Measured and Indicated
Mineral Resources of 442 thousand ounces of gold in 8.03 million tonnes at a
grade of 1.71 g/t and Inferred Mineral Resources of 420 thousand ounces of
gold in 6.17 million tonnes at a grade of 2.12 g/t.
Outlook
· Increase production at Blanket Mine ("Blanket") to the target of
80,000 ounces of gold per year 3 , 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 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 of the re-commencement of activities.
· Commission the 12MWac solar plant, which is expected to provide 27
per cent of Blanket's total electricity demand.
Commenting on the announcement, Mark Learmonth, Chief Executive Officer,
said:
"This has been another terrific quarter: production of just over 21,000 ounces
set a new quarterly production record. In both of the last two quarters we
have exceeded our quarterly production target of 20,000 ounces and we are
on-track to achieve the top end of our annual production target of between
73,000 and 80,000 ounces of gold.
"The benefit of higher production was diluted by a lower gold price and a
modest increase in costs as, in common with other mining companies, we
experience inflation on consumables and diesel. Costs were also adversely
affected by the increased use of diesel generators due to a further
deterioration in the grid supply. However, we are now within a few weeks of
seeing the benefit of the new solar plant which is currently being
commissioned. This, along with other initiatives to reduce our diesel
consumption, should curb the inflationary pressure on our costs.
"We have made good progress on implementing our strategy to acquire a
portfolio of high-quality exploration and development assets in the Zimbabwe
gold sector.
"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-pitable gold resource. Completion of the transaction is
subject to several conditions, and we are making progress towards satisfying
them. Once the transaction has completed, we intend to prepare a feasibility
study to identify the most judicious way to commercialise the Project with
regards 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 of the commencement
of activity.
"The proposed acquisition of Bilboes also builds on the acquisition of the
Maligreen claims in November 2021. We have evaluated the existing geological
information which allowed us to improve the geological confidence of
approximately half the Mineral Resources from Inferred to Measured and
Indicated Mineral Resources. This supports our confidence in the project and
its geological continuity.
"Last week we also announced the acquisition of Motapa, a large exploration
property which is contiguous to the Bilboes gold project. Motapa was formerly
owned and explored by Anglo American Zimbabwe prior to its exit from the
Zimbabwean gold sector in the late 1990s. The project has a mining lease
covering approximately 2,200 hectares. Motapa has been mined throughout most
of the second half of the 20th century. Caledonia understands that during this
period the region produced as much as 300,000 ounces of gold.
"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 11 November at 14.00 London Time
The zoom details are set out below
When: Nov 11, 2022 14.00 London Time
Topic: Q3 2022 Results Shareholder Call
Register in advance for this webinar:
https://caledoniamining.zoom.us/webinar/register/WN_odZTjNcNRyme5BI1HGiW7w
(https://caledoniamining.zoom.us/webinar/register/WN_odZTjNcNRyme5BI1HGiW7w)
After registering, you will receive a confirmation email containing
information about joining the webinar.
Caledonia Mining Corporation Plc
Mark Learmonth Tel: +44 1534 679 802
Camilla Horsfall Tel: +44 7817 841793
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
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
IH Securities (Private) Limited (VFEX Sponsor - Zimbabwe)
Dzika Dhana
Lloyd Mlotshwa Tel: +263 (242) 745 119/33/39
Note: 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 Se
pt
em
be
r
30
2021 2022 2021 2022
Revenue 33,496 35,840 89,193 107,904
Royalty (1,679) (1,796) (4,471) (5,408)
Production costs (13,729) (15,802) (38,948) (44,663)
Depreciation (2,351) (2,670) (5,743) (7,372)
Gross profit 15,737 15,572 40,031 50,461
Other income 12 14 42 17
Other expenses (1,254) (552) (5,395) (1,835)
Administrative expenses (1,906) (2,789) (5,261) (8,068)
Net foreign exchange gain 413 1,559 341 6,640
Cash-settled share-based expense (243) (25) (426) (335)
Equity-settled share-based expense - (94) - (176)
Derivative financial instrument gains/(expenses) - 537 (107) (1,160)
Operating profit 12,759 14,222 29,225 45,544
Net finance costs (13) (9) (354) (300)
Profit before tax 12,746 14,213 28,871 45,244
Tax expense (4,423) (4,018) (11,318) (14,051)
Profit for the period 8,323 10,195 17,553 31,193
Other comprehensive income
Items that are or may be reclassified to profit or loss
Exchange differences on translation of foreign operations (330) (699) (149) (858)
Total comprehensive income for the period 7,993 9,496 17,404 30,335
Profit attributable to:
Owners of the Company 6,939 8,614 14,183 25,932
Non-controlling interests 1,384 1,581 3,370 5,261
Profit for the period 8,323 10,195 17,553 31,193
Total comprehensive income attributable to:
Owners of the Company 6,609 7,915 14,034 25,074
Non-controlling interests 1,384 1,581 3,370 5,261
Total comprehensive income for the period 7,993 9,496 17,404 30,335
Earnings per share (cents)
Basic IFRS 56.8 66.2 115.3 197.7
Diluted IFRS 56.7 64.4 115.1 197.7
Adjusted earnings per share (cents) 68.9 60.7 183.2 178.8
Dividends declared per share (cents) 13.0 14.0 36.0 42.0
Condensed Consolidated Statements of Cash Flows (unaudited)
($'000's) 3 months ended 9 months ended
September 30 September 30
2021 2022 2021 2022
Cash flows from operating activities
Cash generated from operations 9,338 11,717 26,875 41,901
Interest paid (50) (27) (297) (116)
Tax paid (2,176) (2,767) (4,774) (5,993)
Net cash from operating activities 7,112 8,923 21,804 35,792
Cash flows used in investing activities
Acquisition of property, plant and equipment (8,564) (10,840) (22,332) (33,585)
Acquisition of exploration and evaluation assets (449) (311) (1,423) (947)
Realisation of gold ETF - - 1,082 -
Proceeds on disposal of assets held for sale 500 - 500 -
Proceeds from disposal of subsidiary - - 340 -
Net cash used in investing activities (8,513) (11,151) (21,833) (34,532)
Cash flows from financing activities
Dividends paid (2,108) (2,709) (5,614) (7,197)
Repayment of gold loan - - - (3,698)
Proceeds from call options - 415 - 239
Term loan repayments (100) - (306) -
Payment of lease liabilities (31) (36) (96) (115)
Net cash used in financing activities (2,239) (2,330) (6,016) (10,771)
Net decrease in cash and cash equivalents (3,640) (4,558) (6,045) (9,511)
Effect of exchange rate fluctuations on cash and cash equivalents (19) (137) (37) (588)
Net cash and cash equivalents at beginning of the period 16,669 10,862 19,092 16,265
Net cash and cash equivalents at end of the period 13,010 6,167 13,010 6,167
Summarised Consolidated Statements of Financial Position (unaudited)
($'000's) As at December 31 September 30
2021 2022
Total non-current assets 157,944 187,980
Inventories 20,812 19,675
Prepayments 6,930 3,885
Trade and other receivables 7,938 8,815
Income tax receivable 101 38
Cash and cash equivalents 17,152 8,256
Total assets 210,877 228,649
Total non-current liabilities 12,633 6,725
Lease liabilities - short term portion 134 127
Trade and other payables 9,957 12,340
Derivative financial liabilities 3,095 -
Income tax payable 1,562 1,867
Overdraft 887 2,089
Cash-settled share-based payments - short term portion 2,053 827
Total liabilities 30,321 23,975
Total equity 180,556 204,674
Total equity and liabilities 210,877 228,649
(#_ftnref1) (3) Refer to the technical report entitled "BILBOES GOLD PROJECT
FEASIBILITY STUDY" with effective date 15 December 2021 prepared by DRA
Projects (Pty) Ltd filed by the Company on SEDAR (www.sedar.com) on 21 July
2022.
2 Refer to technical report entitled "Caledonia Mining Corporation Plc
Updated NI 43-101 Mineral Resource Report on the Maligreen Gold Project,
Zimbabwe dated November 3, 2022 prepared by Minxcon (Pty) Ltd and filed on
SEDAR on November 7, 2022.
3 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.
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