Caledonia Mining Corporation Plc (“Caledonia” or the
“Company”) (NYSE AMERICAN: CMCL; AIM: CMCL; TSX: CAL) notes
the announcement by the South African authorities of a nationwide
lockdown of South Africa effective for 21 days from March 26, 2020
until April 16, 2020 as part of their efforts to inhibit the spread
of COVID-19 infections. The lockdown is expected to have knock on
effects for Caledonia as the supply chain for the procurement of a
significant portion of mining consumables and capital equipment for
the Blanket Mine in Zimbabwe (“Blanket”) comes from South Africa.
Caledonia is confident that Blanket can manage the effects of the
lockdown without interruption to its gold production.
Critical Spares and Consumables Inventory
In anticipation of supply chain disruptions
arising from COVID-19, Caledonia has increased the levels of
consumable stocks at Blanket in recent weeks. Caledonia estimates
that Blanket has adequate critical spares and mining consumables in
its inventory to sustain uninterrupted gold production well past
the expected duration of the supply interruption including allowing
for a period of supply chain and inventory restocking after the end
of the South African lockdown on 16th April. Accordingly,
management does not expect that Blanket will be forced to suspend
gold production as a result of the disruption in the South African
supply chain.
Financial Resilience Planning
In the event of either a similar lockdown
procedure being enacted in Zimbabwe, or an outbreak of COVID-19
infections at Blanket affecting a significant number of employees
and necessitating a mine shut down, Caledonia would enter this
unprecedented situation with a strong balance sheet with cash on
hand at March 25, 2020 of approximately $12.5 million. Cash has
been boosted by a strong Q1 production performance at the recently
elevated gold prices. The current cash on hand and existing term
and overdraft facilities already in place at Blanket leave the
business in a strong position to withstand an extended period of
production interruption if it were to materialise.
Steve Curtis, Chief Executive Officer,
commented:
“Our first priority remains the safety and
health of all of our employees and their families. Management has
taken active measures to help minimise the risk of infection and to
safeguard the continuity of day to day business operations at
Blanket. These plans are reviewed and, if necessary, updated daily
in response to this highly fluid situation.
“We approach this challenge with a strong
balance sheet, adequate inventory levels and a healthy workforce.
Caledonia, our employees and indeed the people of Zimbabwe have
successfully overcome great challenges in their recent past. I have
full confidence that we will deal with this current challenge in a
similar manner.”
For further information please contact:
Caledonia Mining Corporation PlcMark
LearmonthMaurice Mason |
Tel: +44 1534 679 800Tel: +44 759 078 1139 |
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WH Ireland (Nomad &
Broker)Adrian Hadden/James Sinclair-Ford |
Tel: +44 20 7220 1751 |
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BlytheweighTim
Blythe/Camilla Horsfall/Megan Ray |
Tel: +44 207 138 3204 |
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3PPBPatrick
ChidleyPaul Durham |
Tel: +1 917 991 7701Tel: +1
203 940 2538 |
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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”, “envisage”,
“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.
Securityholders, potential securityholders 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.
Shareholders 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 common
shares of Caledonia for sale in the United States. 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 common
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.
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