Caledonia Mining Corporation Plc (“Caledonia” or “the Company”)
provides the following trading update for the year ended December
31, 2023.
Caledonia reports that Blanket Mine has
continued to perform well since the end of the quarter ended
September 30, 2023 with full year production for 2023 of 75,416
ounces. As a result, the Company expects to report revenue for the
full year in line with market expectations.
However, increased operating costs for 2023 and
several significant one-off, non-operating costs in the final
quarter of the year have resulted in reduced profit for the full
year. The increase in operating costs comprises of higher than
expected overtime payments and power costs at Blanket Mine. In
relation to non-operating costs, general and administrative costs
rose with global inflation and these also included higher than
expected staff termination costs. The Company also encountered
higher financing costs, including hedging, interest, and foreign
exchange losses and a one-off impairment charge in relation to a
VAT refund claim at the Blanket Mine solar project.
As a result of the above, the Company now
expects to report an adjusted profit before tax for the year ended
December 31, 2023 materially below market expectations.
Further information on the increase in costs
will be provided in the operating and financial results for the
quarter ended December, 31 2023.
Reassuringly, a significant proportion of these
cost increases are not expected to be carried through into 2024.
Specifically, costs associated with Bilboes are now reduced to care
and maintenance only and the project was cash neutral in the fourth
quarter of 2023. Production and costs at Blanket in 2024 to-date is
also within expectations of full year guidance, and the Company is
introducing measures aimed at reducing electricity costs over the
medium term.
At December 31, 2023, the Company had cash on
hand of $6.7 million and overdrafts and term loans of $17.7
million.
Notice of ResultsThe Company announces that its
operating and financial results for the quarter ended December 31,
2023 will be published on or before March 28, 2024.
Mark Learmonth, Chief Executive Officer,
commented:
“It is regrettable that, at a group level, we
have been adversely affected by a series of higher-than-expected
costs in the second half of 2023 which have had a negative effect
on the full year profitability. The performance of Blanket Mine
remains strong and, notwithstanding some unforeseen overtime and
power cost issues in the second half, has met guidance and produced
a robust performance for the second half of 2023.
“A number of the other cost items are not
anticipated to be recurring, whereas others have arisen from our
decisions to invest in the business, most notably around personnel
and advancing the Bilboes sulphide project. I am confident that
many of these will not recur in 2024 which has started positively
and I look forward to the future with optimism as we pursue our
goal of becoming a multi-asset production company.”
Caledonia Mining Corporation PlcMark
LearmonthCamilla Horsfall |
Tel: +44 1534 679 802Tel: +44 7817 841793 |
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Cavendish Capital Markets Limited (Nomad and Joint
Broker)Adrian HaddenPearl Kellie |
Tel: +44 207 397 1965Tel: +44 131 220 9775 |
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Liberum Capital Limited (Joint Broker)Scott
Mathieson/ Matt Hogg |
Tel: +44 20 3100 2000 |
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Camarco, Financial PR (UK) |
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Gordon PooleJulia TilleyElfie Kent |
Tel: +44 20 3757 4980 |
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3PPB (Financial PR, North America)Patrick
ChidleyPaul Durham |
Tel: +1 917 991 7701Tel: +1 203 940 2538 |
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Curate Public Relations (Zimbabwe)Debra
Tatenda |
Tel: +263 77802131 |
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IH Securities (Private) Limited (VFEX Sponsor –
Zimbabwe)Lloyd Mlotshwa |
Tel: +263 (242) 745 119/33/39 |
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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 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: our
expectations in respect of future costs and how to control them,
the publication of annual financial results, the performance of our
investments and achieving our production guidance for the year. 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, the assessment of
the existing capital intensity of the Bilboes gold project and
Caledonia’s experience of project development in Zimbabwe 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 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.
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