Caledonia Mining Corporation Plc (“Caledonia” or the
“Company”) (NYSE AMERICAN: CMCL; AIM: CMCL) 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/t3.
-
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 annum4, 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/t5.
-
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
Webinar ID: 953 8697 6088Passcode: 147538
International numbers available:
https://caledoniamining.zoom.us/u/afzb3xKSY
Enquiries:
Caledonia Mining Corporation PlcMark
LearmonthCamilla Horsfall |
Tel: +44 1534 679 800Tel: +44 7817 841 793 |
|
|
Cenkos Securities plc (Nomad and Joint
Broker)Adrian HaddenNeil McDonaldPearl Kellie |
Tel: +44 207 397 1965Tel: +44 131
220 9771Tel: +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 ChidleyPaul Durham |
Tel: +1 917 991 7701Tel: +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 InformationInformation 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) |
|
|
|
|
|
|
|
3 months ended |
6 months ended |
($’000’s) |
June 30 |
June 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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