REG - Caledonia Mining Crp - Results for the Year ended 31 December 2023
28/03/2024 07:15
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240328:nRSb6092Ia&default-theme=true
RNS Number : 6092I Caledonia Mining Corporation PLC 28 March 2024
Caledonia Mining Corporation Plc
Results for the Year ended December 31, 2023
Notice of Management Conference Call
Dividend Declaration
(NYSE AMERICAN: CMCL; AIM: CMCL; VFEX: CMCL)
St Helier: March 28, 2024
Caledonia Mining Corporation Plc ("Caledonia" or the "Company") announces its
operating and financial results for the year ended December 31, 2023 (the
"Year"). Further information on the financial and operating results for the
Year and the quarter ended December 31, 2023 (the "Quarter" or "Q4") can be
found in the Management Discussion and Analysis ("MD&A"), and the audited
financial statements, which are available on the Company's website and which
are being filed on SEDAR.
Following the trading update of March 4, 2024, the Company is trading in line
with both market expectations and production guidance for 2024. The Company
also declares a quarterly dividend of 14 United States cents (US$0.14) on each
of the Company's shares.
2023 Financial Summary (USD)
· Gross revenue of $146.3 million (2022: $142.1 million). Revenue
for the Year was 3% higher than in 2022 due to a 7.8% increase in the average
realised price of gold sold.
· Gross profit of $41.5 million (2022: $61.8 million). Gross profit
decreased due to higher production costs at Blanket Mine ("Blanket") of $69.6
million and operating costs at the small scale, temporary Bilboes oxide mine
in the Year of $13.1 million. The Bilboes oxide mine was returned to care and
maintenance with effect from October 1 2023.
· Revenue and gross profit exclude the benefit of 3,057 ounces of gold
work-in-progress at the end of December which were sold in the first week of
January.
· Administrative expenses of $17.4 million (2022: $11.9 million).
Administrative expenses during the Year were 46% higher than in 2022,
predominantly due to increased salaries and wages (which included a one-off
settlement payable to the former Chief Operating Officer) and payment for
advisory services on conclusion of the Bilboes acquisition in January 2023.
· EBITDA of $29.7 million (2022: $50.4 million) was lower than in
2023 primarily due to the Bilboes oxide mining cost of $13.1 million and
several one-off costs including, those listed above, higher than expected
labour and power costs of $5.5 million, and $2.5 million of foreign exchange
losses in the year.
· On-mine cost per ounce(( 1 (#_ftn1) )) was $1,047 (2022: $735).
Excluding the costs of the small-scale temporary Bilboes oxide mine (which was
placed on care and maintenance from October 1, 2023), on-mine costs would have
amounted to $912 per ounce compared to $735 per ounce in 2022, the increase
being due to increased labour and electricity costs.
· All-in sustaining cost per ounce(1) of $1,445 (2022: $878) being a
64.6% increase year-on-year, predominantly due to the higher on-mine cost per
ounce (above) and an increase in sustaining capital expenditure following the
classifying of capital expenditures on projects due to Blanket's investment
phase nearing its end.
· Adjusted earnings per share ("EPS")(1) of 17.1 cents (2022: 219.9
cents).
· Net cash from operating activities of $14.8 million (2022: $42.6
million).
· Net cash and cash equivalents of $(11.0) million (2022: $1.5
million). The decrease is predominantly due to cash consumption from the
Bilboes oxide mine operating activities, the higher cost at Blanket and the
once-off costs highlighted above.
· The dividend for 2023 was maintained at the same level as in 2022.
As set out in a separate news release issued today, Caledonia has declared a
quarterly dividend of 14 cents per share, payable on April 26, 2024. This
reflects our confidence in Blanket's operations and its cash generation.
Operating Highlights
· Annual gold production at Blanket of 75,416 ounces ("oz") in 2023,
in line with guidance.
· Quarterly gold production at Blanket of 20,172 oz in Q4.
· 2024 gold production guidance at Blanket of 74,000 oz to 78,000
oz 2 (#_ftn2) .
· Gold sales in Q4 excluded 3,057 oz that were held as
work-in-progress as at December 31, 2023 and which were sold early in January
2024.
· Further encouraging results from the deep-level drilling programme at
Blanket, as announced in January 2024, which is currently evaluating the
continuity of the mineralised zones on the Blanket and Eroica ore bodies.
Total drilling for 2023 was 13,280 metres and this, together with ongoing
drilling, will be reflected in a revised mineral resource statement expected
to be released in the second quarter of 2024.
Post Year-end events, Outlook and Strategic Focus
· The operating and financial performance at Blanket has been in line
with management expectations in the first quarter of 2024.
· The Company is evaluating the initial results of the ongoing work on
revised feasibility studies for Bilboes with a specific focus on reducing the
initial capital expenditure profile, thereby enhancing the project economics.
· Dana Roets left the business as Chief Operating Officer on February 29,
2024. A process is well-advanced to appoint a replacement.
· Tariro Gadzikwa has joined the board as an independent
non-executive director.
· Caledonia's immediate strategic focus is to:
· Produce between 74,000 oz to 78,000 oz in 2024 at Blanket and at a
similar level in 2025.
· Complete a revised resource statement thereby extending the life
of mine at Blanket.
· Complete the updated feasibility study on the Bilboes sulphide project
to determine the best implementation strategy and estimate the funding
requirements, and commence development of the project.
· Continue with exploration activities at the Motapa exploration
project.
Mark Learmonth, Chief Executive Officer, commented:
"The performance of Blanket remains robust; operating cash flows across the
second half of the year show a continuation of the improved operating
performance compared to the first half of 2023. We continue to see Blanket as
the solid foundation for growth as we pursue our strategy to become a
multi-asset gold producer.
"I am pleased that the Company also announces today its quarterly dividend of
14 cents which reflects managements confidence in the operations of the
business. Future dividend payments will reflect operational performance and an
assessment of capital allocation.
"At a consolidated level, group profitability for the Quarter was adversely
affected by several unanticipated one-off costs, and by higher than expected
labour and power costs. Management has taken steps to address these and is
evaluating measures to reduce electricity consumption and improve labour
efficiency. Gold sales in the Quarter exclude 3,057 ounces of gold that were
held as work-in-progress as at December 31, 2023 and which were sold early in
January 2024.
"We are highly encouraged by the results from the underground exploration
programme at Blanket which we restarted during the year; in general, the
drilling results, which we announced in July 2023 and January 2024, indicated
significantly better widths and grades than previously modelled and we expect
to publish a revised resource statement in the second quarter of 2024 which
should incorporate an increase in Blanket's life of mine.
"Caledonia's vision has evolved over the last couple of years from being a
relatively small operator of a single asset towards a strategy focussed on
becoming a multi-asset, Zimbabwe focussed gold producer with an ambition to
produce over 250,000 ounces of gold per annum. The acquisition of Bilboes in
January 2023 builds on the earlier acquisitions of Motapa and Maligreen to
create a portfolio of high-quality exploration and development assets in
Zimbabwe.
"I look forward to announcing the results of the updated feasibility study for
the Bilboes sulphide project soon and firmly believe that we have the
potential to create and deliver greater shareholder value from the future
inclusion of this project in our production profile."
Commentary
Revenue in the Quarter was 13.1% higher than the last quarter of 2022 (the
"comparative quarter") due to a 0.9% increase in the quantity of gold sold and
a 12.2% increase in the average realised price of gold sold. Revenue for the
Year was 3.0% higher than in 2022 due to a 7.8% increase in the average
realised price of gold sold, offset by 4.4% lower oz sold in the Year compared
to 2022. Sales in the Quarter exclude 3,057 oz that were held as
work-in-progress at December 31, 2023 and which were sold early in January
2024. Production at Blanket for the Year of 75,416 oz was in line with
guidance.
Finance costs paid in the Quarter and the Year increased due to overdraft
interest of $0.7 million in the Quarter and $1.7 million in the Year (Q4 2022:
$0.1 million; 2022: $0.2 million) to accommodate working capital fluctuations
at Blanket. In addition, finance costs for the Year included interest of $0.6
million (2022: $nil) related to the Motapa loan notes that were fully repaid
on July 3, 2023.
Gross profit for the Quarter and Year decreased from the comparative quarter
and previous year, due to higher production costs, in particular at the
Bilboes oxide mine and electricity and labour costs at Blanket. Increased
non-cash, depreciation costs were also incurred as a result of a shortening of
the useful life of certain property, plant and equipment items at Blanket in
the Year in areas that are planned to be mothballed over the next few years as
the mine transitions towards producing entirely from below 750 meters,
serviced by the Central Shaft.
Blanket's Q4 production costs increased due to the higher than anticipated use
of electricity arising from the continued heavy use of infrastructure at the
No. 4 Shaft and Jethro Shaft. These will be used more sparingly going forwards
following the commissioning of the Central Shaft. Electricity usage is
expected to reduce in 2024 and 2025 as Blanket transitions from the old mine
infrastructure and mining activities become centralised in areas accessible by
the Central Shaft. Management is reviewing the timing of closing down other
shafts and machinery and using infrastructure more efficiently, to reduce
future power consumption.
The poor quality of electricity supply from the Zimbabwe grid is the most
significant production risk at Blanket. In Q4, Blanket's power supply from the
grid was interrupted due to an imbalance between electricity demand and
supply. Management is investigating options to alleviate the instability in
the utility supply and further reduce the cost of diesel generator usage to
supplement low voltage occurrences and power outages. Further work is in
process to reduce Blanket's overall electricity consumption by utilising the
available shafts and machinery more efficiently.
The management of the labour force has improved since December 2023 and, as a
result, the overtime costs reduced significantly in December 2023. These
efficiencies are expected to continue.
Administrative expenses in the Quarter were 43.0% higher than the comparative
quarter predominantly due to increased salaries and wages (including the
settlement amount paid to the Chief Operating Officer on leaving the
business). Administrative expenses in the Year include a one-off fee of $3.1
million paid for advisory services on conclusion of the Bilboes acquisition in
January 2023. Excluding both of these costs, which are non-recurring,
administration expenses for the Year increased by 5.0% compared to 2022.
Finance costs paid in the Quarter and the Year increased due to overdraft
interest of $0.7 million in the Quarter and $1.7 million in the Year (Q4 2022:
$0.1 million; 2022: $0.2 million) to accommodate working capital fluctuations
at Blanket. In addition, finance costs for the Year included interest of $0.6
million (2022: $nil) related to the Motapa loan notes that were fully repaid
by July 3, 2023.
Net profit for the Quarter and Year was affected by increased production
costs, higher depreciation and higher administrative expenses compared to the
comparative quarter and previous year. Further, net profit for the Year was
negatively affected by foreign exchange losses compared to foreign exchange
gains in the previous year.
Due to the oxide mining activities at Bilboes incurring losses, it returned to
care and maintenance with effect from October 1, 2023, following which the
costs at Bilboes reduced from approximately $1 million per month to $200,000
per month, being the costs of security and other care and maintenance costs.
Leaching of the oxide ore on the heap leach continued and will continue as
long as the gold recovered from the heap contributes to care and maintenance
costs. Oxide mining will resume when the stripping of the waste for the
sulphide project commences.
The ongoing underground drilling program at Blanket targeted the Eroica,
Blanket and AR south ore bodies and has yielded encouraging results which were
published on July 10, 2023 and January 30, 2024. Total drilling for 2023 was
13,280 metres and the results indicate that the existing Blanket, Eroica and
AR South ore bodies have grades and widths which are generally better than
expected. This new information will be reflected in a revised resource
statement which is expected to be published in the second quarter of 2024 and,
in due course, an updated technical report in respect of Blanket.
Bilboes Feasibility Study
Work on a revised feasibility study for the large-scale sulphide project at
Bilboes is well-advanced and the Company is considering the initial results.
Further work continues, particularly focused on reducing the initial capital
expenditure with a view to enhancing the project economics. This will require
the preparation of a new technical report which reflects the work that has
already been performed and the further work that is currently in progress.
Management has always stressed that it will consider alternative development
paths for Bilboes with a view to optimising capital allocation and thereby
maximising the uplift in value for Caledonia shareholders.
Conference Call Details
Management will host a conference call at 2pm London time on 3(rd) April to
discuss the 2023 results.
Details for the call are as follows:
When: Apr 3, 2024 02:00 PM London time
Topic: Q4 and FY Results call for Shareholders
Register in advance for this webinar:
https://caledoniamining.zoom.us/webinar/register/WN_kr_kHxqgSuKFqoj8fMUL2w
(https://caledoniamining.zoom.us/webinar/register/WN_kr_kHxqgSuKFqoj8fMUL2w)
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
Pearl Kellie Tel: +44 207 397 1965
Tel: +44 131 220 9775
Liberum Capital Limited (Joint Broker)
Scott Mathieson Tel: +44 20 3100 2000
Matt Hogg
Camarco, Financial PR/ IR (UK)
Gordon Poole Tel: +44 20 3757 4980
Julia Tilley
Elfie Kent
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.
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, our plans and timing regarding further
exploration and drilling and development, future costs, the development of
Bilboes, our strategic vision and the publication of an updated mineral
resource statement. 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.
Craig James Harvey, MGSSA, MAIG, Caledonia Vice President, Technical Services,
has reviewed and approved the scientific and technical information contained
in this news release. Craig James Harvey is a "Qualified Person" as defined by
each of (i) the Canadian Securities Administrators' National Instrument 43-101
- Standards of Disclosure for Mineral Projects and (ii) sub-part 1300 of
Regulation S-K of the U.S. Securities Act.
Consolidated statements of profit or loss and other comprehensive income
(in thousands of United States Dollars, unless indicated otherwise)
For the years ended December 31 2023 2022 2021
Revenue 146,314 142,082 121,329
Royalty (7,637) (7,124) (6,083)
Production costs (82,709) (62,998) (53,126)
Depreciation (14,486) (10,141) (8,046)
Gross profit 41,482 61,819 54,074
Other income 263 60 46
Other expenses (4,367) (11,782) (7,136)
Administrative expenses (17,429) (11,941) (9,091)
Cash-settled share-based expense (463) (609) (477)
Equity-settled share-based expense (640) (484) -
Net foreign exchange (loss) gain (2,550) 4,411 1,184
Net derivative financial instrument expense (1,119) (1,198) (240)
Operating profit 15,177 40,276 38,360
Finance income 39 17 14
Finance cost (3,024) (657) (375)
Profit before tax 12,192 39,636 37,999
Tax expense (12,810) (16,770) (14,857)
(Loss) profit for the period (618) 22,866 23,142
Other comprehensive income
Items that are or may be reclassified to profit or loss
Exchange differences on translation of foreign operations (622) (462) (531)
Total comprehensive income for the period (1,240) 22,404 22,611
(Loss) profit attributable to:
Owners of the Company (4,198) 17,903 18,405
Non-controlling interests 3,580 4,963 4,737
(Loss) profit for the period (618) 22,866 23,142
Total comprehensive income attributable to:
Owners of the Company (4,820) 17,441 17,874
Non-controlling interests 3,580 4,963 4,737
Total comprehensive income for the period (1,240) 22,404 22,611
(Loss) earnings per share
Basic (loss) earnings per share ($) (0.24) 1.36 1.49
Diluted (loss) earnings per share ($) (0.24) 1.35 1.48
Consolidated statements of cash flows
For the years ended December 31,
(in thousands of United States Dollars, unless indicated otherwise)
2023 2022 2021
Cash inflow from operations 26,398 49,657 38,703
Interest received 39 17 14
Finance costs paid (2,462) (192) (388)
Tax paid (9,206) (6,866) (7,426)
Net cash inflow from operating activities 14,769 42,616 30,903
Cash flows used in investing activities
Acquisition of property, plant and equipment (28,556) (41,495) (32,112)
Acquisition of exploration and evaluation assets (1,837) (2,596) (5,717)
Proceeds from sale of assets held for sale - - 500
Proceeds from derivative financial instruments 178 - 1,066
Acquisition of Put options (946) (478) -
Proceeds from disposal of subsidiary - - 340
Proceeds from call options - 416 208
Acquisition of call options - (176) -
Net cash used in investing activities (31,161) (44,329) (35,715)
Cash flows from financing activities
Dividends paid (11,099) (8,906) (8,069)
Payment of lease liabilities (184) (150) (129)
Shares issued - equity raise (net of transaction cost) 15,569 - 7,806
Repayments of term loans - - (361)
Loan notes - Motapa payment (7,250) - -
Loan notes - solar bond issue receipts (net of transaction cost) 6,895 - -
Proceeds from gold loan - - 2,752
Repayment of gold loan - (3,698) -
Proceeds from share options exercised - - 165
Net cash from/ (used in) financing activities 3,931 (12,754) 2,164
Net decrease in cash and cash equivalents (12,461) (14,467) (2,648)
Effect of exchange rate fluctuations on cash and cash equivalents (67) (302) (179)
Net cash and cash equivalents at the beginning of the year 1,496 16,265 19,092
Net cash and cash equivalents at the end of the year (11,032) 1,496 16,265
Consolidated statements of financial position
(in thousands of United States Dollars, unless indicated otherwise)
As at December 31 2023 2022
Assets
Exploration and evaluation assets 94,272 17,579
Property, plant and equipment 179,649 178,983
Deferred tax asset 153 202
Total non-current assets 274,074 196,764
Income tax receivable 1,120 40
Inventories 20,304 18,334
Derivative financial assets 88 440
Trade and other receivables 9,952 9,185
Prepayments 2,538 3,693
Cash and cash equivalents 6,708 6,735
Assets held for sale 13,519 -
Total current assets 54,229 38,427
Total assets 328,303 235,191
Equity and liabilities
Share capital 165,068 83,471
Reserves 137,819 137,801
Retained loss (63,172) (50,222)
Equity attributable to shareholders 239,715 171,050
Non-controlling interests 24,477 22,409
Total equity 264,192 193,459
Liabilities
Deferred tax liabilities 6,131 5,123
Provisions 10,985 2,958
Loan notes - long term portion 6,447 -
Cash-settled share-based payment - long term portion 374 1,029
Lease liabilities - long term portion 41 181
Total non-current liabilities 23,978 9,291
Cash-settled share-based payment - short term portion 920 1,188
Income tax payable 10 1,324
Lease liabilities - short term portion 167 132
Loan notes - short term portion 665 7,104
Trade and other payables 20,503 17,454
Overdraft and term loans 17,740 5,239
Liabilities associated with assets held for sale 128 -
Total current liabilities 40,133 32,441
Total liabilities 64,111 41,732
Total equity and liabilities 328,303 235,191
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 "NI 43-101 Technical Report on the
Blanket Gold Mine, Zimbabwe" with effective date September 1, 2022 prepared by
Minxcon (Pty) Ltd filed by the Company on SEDAR (www.sedar.com) on March 13,
2023.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR SEFEDWELSEFDRecent news on Caledonia Mining
See all newsREG - Caledonia Mining Crp - Notification of change to significant shareholder
AnnouncementREG - Caledonia Mining Crp - Notification of change to significant shareholder
AnnouncementREG - Caledonia Mining Crp - Issue of New Long Term Incentive Plan Awards
AnnouncementREG - Caledonia Mining Crp - Notification of change to significant shareholder
AnnouncementREG - Caledonia Mining Crp - Blanket Mine Q1 2024 Production
Announcement