Caledonia Mining Corporation Plc (NYSE AMERICAN: CMCL; AIM:
CMCL) (“Caledonia” or the “Company”) announces its operating
and financial results for the quarter and the nine months ended
September 30, 2020 (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 have been filed on
SEDAR.
Financial
Highlights for the Quarter
-
Gross revenues of $25.4 million, a 27 per cent increase on the
$20.0 million achieved in the third quarter of 2019 (“Q3
2019”).
-
Gross profit1 of $12.5 million, a 47 per cent increase on the $8.5
million in Q3 2019 at a gross margin of 49 per cent (Q3 2019, 43
per cent).
-
EBITDA2 (excluding net foreign exchange gains and share based
payments) of $11.2 million, a 34 per cent increase on the $8.3
million in Q3 2019 at a margin of 44 per cent (Q3 2019, 42 per
cent).
-
The on-mine cost per ounce3 increased from $686 in Q3 2019 to $758
due to costs associated with COVID-19, a share-based payment
expense and increased use of the diesel generators.
-
The all-in sustaining cost per ounce3 increased from $872 in Q3
2019 to $1,119 due to a higher insurance premium and an increased
share-based payment expense.
-
Basic IFRS earnings per share (“EPS”) of 36.6 cents (Q3 2019, 63.4
cents). IFRS earnings for the Quarter were adversely affected by a
lower foreign exchange gain and higher taxation.
-
Adjusted EPS3 of 34.1 cents (Q3 2019, 15.8 cents).
-
Net cash from operating activities of $5.3 million (Q3 2019, $4.9
million).
-
Net cash and cash equivalents of $21.6 million (December 31, 2019,
$8.9 million).
-
Total dividend paid in the Quarter of 8.5 cents per share; a
further dividend at the increased rate of 10 cents per share was
paid in October.
Operating Highlights
-
15,155 ounces of gold produced in the Quarter (Q3 2019, 13,646
ounces); 42,887 ounces produced in the Nine Months (first nine
months of 2019, 38,306 ounces).
-
Tonnes mined and milled in the Quarter increased by 10 per cent
compared to Q3 2019; recoveries were also slightly improved.
-
Equipping of Central Shaft continued in the Quarter at an increased
rate as operations returned to normal following the relaxation of
measures to prevent the spread of COVID-19.
Effect of COVID-19
and Outlook
- COVID-19 had no effect on
production in the Quarter which was above target for the Nine
Months.
- Production guidance for 2020
increased from 53,000 to 56,000 ounces to 55,000 to 58,000
ounces.
- Progress on the Central Shaft
returned to the planned rate as travel and transport restrictions
were lifted. Central Shaft is expected to be fully equipped by the
end of 2020 and to be commissioned in the first quarter of 2021 –
approximately three months later than expected due to the delays
arising from COVID-19. Production guidance for 2021 is 61,000 to
67,000 ounces; guidance for 2022 is approximately 80,000
ounces.
- Voltalia, an international
renewable energy provider, has been appointed as the contractor for
the 12MW solar project which is expected to be commissioned before
the end of 2021 and is expected to provide approximately 27 per
cent of Blanket’s average daily electricity requirements.
Dividend
-
The July dividend was increased by 13.3 per cent to 8.5 cents per
share and the October dividend was further increased to 10 cents
per share following the continued strong financial and operating
performance.
-
The cumulative increase in the dividend per share since January
2020 is 45 per cent.
-
Further dividend increases will depend on the balance between
delivering returns to shareholders and pursuing the significant
growth opportunities within Zimbabwe.
Steve Curtis, Chief Executive
Officer,
commented:
“I am delighted by Blanket Mine’s continued
strong operating performance in the Quarter. Despite the disruption
caused by the COVID-19 pandemic, the management initiatives which
were implemented in 2019 have continued into 2020 and have resulted
in a 12 per cent increase in gold production in the first nine
months of 2020 compared to the same period of 2019. The resilience
of Blanket’s operations during this difficult period is testament
to the outstanding commitment of the entire team at Blanket Mine.
Production for the first nine months of 2020 exceeded expectations
and this trend continued into October. We have therefore increased
our gold production guidance for 2020 from a range of 53,000 to
56,000 ounces to a range of 55,000 to 58,000 ounces.
“Cost control in the Quarter continued to be
excellent, but a comparison of the costs for the Quarter to costs
in the third quarter of 2019 is complicated by factors which
somewhat increased the costs in this Quarter. The on-mine cost per
ounce in the Quarter was $758 compared to $686 in Q3 2019. However,
the costs in Q3 2020 include approximately $73 per ounce of costs
relating to COVID-19, a non-cash charge in respect of share-based
payments and the cost of increased usage of the diesel generators.
After adjusting for these items, the on-mine cost per ounce of the
Quarter was $685 per ounce – virtually unchanged from Q3 2019 and
lower than budget.
“The all-in sustaining cost per ounce for the
Quarter was $1,119 per ounce – an increase of 28 per cent compared
to Q3 2019. This increase was due to a higher royalty charge, which
reflects the increased gold price, increased administrative
expenses, which is largely due to higher insurance premiums and an
increased charge for share-based payments, which reflects the
increased share price.
“Notwithstanding these and other factors, we
remain on track to achieve our cost guidance for 2020 of between
$693 and $767 per ounce for on-mine costs and between $951 and
$1,033 per ounce for all-in sustaining costs.
“The excellent performance was also reflected in
continued strong cash generation: net cash flow from operating
activities (i.e. before interest, taxation payments and capital
expenditure) was $7.4 million in the Quarter compared to $4.9
million in Q3 2019. Net cash flow from operating activities for the
Quarter was after an increase in working capital of $1.5 million as
we replenished our inventories to increase our business resilience
to guard against any resurgence of the COVID-19 pandemic which
could affect Blanket’s supply chain.
“During the Quarter we raised $13 million
(before expenses) from the issue of equity, and the proceeds will
be used to construct the 12 MW solar plant.
“Caledonia ended the Quarter with net cash and
cash equivalents of $21.6 million (excluding $1 million of a gold
ETF which we purchased in the Quarter to protect cash in South
Africa against devaluation of the South African Rand).
“The continued strong performance was achieved
without compromising on safety performance. The Total Injury
Frequency Rate has been substantially reduced from the levels in
2019 after a concerted effort by management over the last 18 months
to improve and enforce safety standards. I am also very pleased to
report that in the Quarter we achieved one million manhours at the
Central Shaft project without incurring any serious injury.
“Interruptions to the supply of electricity from
the grid have continued, but Blanket manages these using its
increased suite of diesel generators. In the previous quarter we
resolved to construct a 12MW solar plant at a cost of approximately
$12 million, which is expected to provide 100 per cent of Blanket’s
baseload electricity demand during daylight hours and approximately
27 per cent of Blanket’s total daily electricity demand. Whilst
expected to deliver an acceptable financial return, this investment
is primarily intended to protect Blanket from a further
deterioration in its electricity supply as well as to reduce
Blanket’s environmental footprint. We have raised the funds to
construct this project and have appointed Voltalia as the
contractor for the project which could be operational by the end of
2021.
“The coronavirus pandemic had no appreciable
effect on Blanket’s production in the Quarter and a minor effect on
costs. However, work on Central Shaft has been slower than planned
because travel restrictions imposed to control the spread of
COVID-19 affected the movement of specialised equipment and
contractors between South Africa and Blanket. The project is
approximately 12 weeks behind schedule: it is currently expected
that the shaft will be equipped before the end of 2020 and will be
commissioned during the first quarter of 2021. As a result of this
delay, the build-up in production will also be affected: gold
production in 2021 is now expected to be in the range of 61,000 to
67,000 ounces; there is no change to the production target of
approximately 80,000 ounces of gold from 2022 onwards4.
“In light of the improved performance and the
brighter outlook for 2020 and beyond, Caledonia increased its
quarterly dividend from 6.875 cents per share to 7.5 cents per
share in January 2020. At the end of June, in light of Blanket’s
strong performance, the higher gold price and the return to normal
levels of production including renewed access to supply chains,
Caledonia increased its quarterly dividend further to 8.5 cents per
share. In October, due to the continued strong operational
performance, the dividend was further increased to 10 cents per
share. This means the cumulative increase in the quarterly dividend
in 2020 is 45 per cent. The board will review Caledonia’s future
dividend distributions as appropriate while considering the balance
between delivering returns to shareholders and pursuing the
significant growth opportunities within Zimbabwe and in line with a
prudent approach to financial management.”
___________________1 Gross profit is after
deducting royalties, production costs and depreciation but before
administrative expenses, other income, interest and finance charges
and taxation.2 EBITDA is after deducting royalties, production
costs and administrative expenses, but is before depreciation, net
other income, profit on sale of a subsidiary, net foreign exchange
gains, cash-settled share-based payments, hedging expenses, finance
charges and taxation. 3 Non-IFRS measures such as “on-mine cost per
ounce”, “all-in sustaining cost” and “adjusted EPS” are used
throughout this announcement. Refer to section 10 of the MD&A
for a discussion of non-IFRS measures.4 Mr Dana Roets (B Eng
(Min.), MBA, Pr.Eng., FSAIMM, AMMSA), Chief Operating Officer, is
the Company's qualified person as defined by Canada's National
Instrument 43-101 and has approved any scientific or technical
information contained in this news release.
For further information please contact:
Caledonia Mining Corporation PlcMark
LearmonthCamilla Horsfall |
Tel: +44 1534 679 800Tel: +44 7817841 793 |
|
|
WH Ireland
(Nomad & Broker)Adrian Hadden/James
Sinclair-Ford |
Tel: +44 20 7220 1751 |
|
|
BlytheweighTim
Blythe/Megan Ray |
Tel: +44 207 138 3204 |
|
|
3PPBPatrick
ChidleyPaul Durham |
Tel: +1 917 991 7701Tel: +1 203
940 2538 |
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
consolidated statements of profit and loss and other comprehensive
income(in thousands of United States dollars, unless
indicated otherwise) |
|
Three
months ended |
|
|
Nine
months ended |
Unaudited |
September
30, |
|
|
September
30, |
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
Revenue |
25,359 |
|
|
19,953 |
|
|
|
71,874 |
|
|
52,393 |
|
Less: Royalty |
(1,271 |
) |
|
(999 |
) |
|
|
(3,599 |
) |
|
(2,682 |
) |
Production costs |
(10,399 |
) |
|
(9,410 |
) |
|
|
(32,537 |
) |
|
(26,750 |
) |
Depreciation |
(1,143 |
) |
|
(1,059 |
) |
|
|
(3,457 |
) |
|
(3,159 |
) |
Gross
profit |
12,546 |
|
|
8,485 |
|
|
|
32,281 |
|
|
19,802 |
|
Other income |
27 |
|
|
5 |
|
|
|
4,736 |
|
|
2,043 |
|
Other expenses |
(305 |
) |
|
(173 |
) |
|
|
(1,827 |
) |
|
(482 |
) |
Administrative expenses |
(2,539 |
) |
|
(1,246 |
) |
|
|
(5,361 |
) |
|
(3,951 |
) |
Cash-settled share-based
payment |
(231 |
) |
|
(36 |
) |
|
|
(1,177 |
) |
|
(406 |
) |
Net foreign exchange gain |
985 |
|
|
3,345 |
|
|
|
4,694 |
|
|
28,270 |
|
Profit on sale of
subsidiary |
– |
|
|
– |
|
|
|
– |
|
|
5,409 |
|
Fair value gain/ (loss) on
derivative assets |
27 |
|
|
– |
|
|
|
(121 |
) |
|
(324 |
) |
Operating
profit |
10,510 |
|
|
10,380 |
|
|
|
33,225 |
|
|
50,361 |
|
Finance income |
4 |
|
|
30 |
|
|
|
36 |
|
|
80 |
|
Finance cost |
(91 |
) |
|
(46 |
) |
|
|
(390 |
) |
|
(116 |
) |
Profit before
tax |
10,423 |
|
|
10,364 |
|
|
|
32,871 |
|
|
50,325 |
|
Tax expense |
(4,993 |
) |
|
(1,858 |
) |
|
|
(11,410 |
) |
|
(3,154 |
) |
Profit for the
period |
5,430 |
|
|
8,506 |
|
|
|
21,461 |
|
|
47,171 |
|
|
|
|
|
|
|
|
Other comprehensive
income |
|
|
|
|
|
|
Items that are or may
be reclassified to profit or loss |
|
|
|
|
|
|
Exchange differences on
translation of foreign operations |
(88 |
) |
|
(353 |
) |
|
|
(1,146 |
) |
|
(353 |
) |
Reclassification of
accumulated exchange differences on the sale of subsidiary |
– |
|
|
– |
|
|
|
– |
|
|
(2,109 |
) |
Total comprehensive
income for the period |
5,342 |
|
|
8,153 |
|
|
|
20,315 |
|
|
44,709 |
|
|
|
|
|
|
|
|
Profit attributable
to: |
|
|
|
|
|
|
Owners of the Company |
4,433 |
|
|
7,007 |
|
|
|
17,807 |
|
|
39,628 |
|
Non-controlling interests |
997 |
|
|
1,499 |
|
|
|
3,654 |
|
|
7,543 |
|
Profit for the
period |
5,430 |
|
|
8,506 |
|
|
|
21,461 |
|
|
47,171 |
|
|
|
|
|
|
|
|
Total comprehensive
income attributable to: |
|
|
|
|
|
|
Owners of the Company |
4,345 |
|
|
6,654 |
|
|
|
16,661 |
|
|
37,166 |
|
Non-controlling interests |
997 |
|
|
1,499 |
|
|
|
3,654 |
|
|
7,543 |
|
Total comprehensive
income for the period |
5,342 |
|
|
8,153 |
|
|
|
20,315 |
|
|
44,709 |
|
|
|
|
|
|
|
|
Earnings per
share |
|
|
|
|
|
|
Basic earnings per share
($) |
0.37 |
|
|
0.63 |
|
|
|
1.50 |
|
|
3.60 |
|
Diluted earnings per share
($) |
0.37 |
|
|
0.63 |
|
|
|
1.50 |
|
|
3.60 |
|
Condensed
consolidated statements of financial
position(in thousands of United States dollars, unless
indicated otherwise) |
Unaudited |
|
September 30, |
|
December 31, |
|
As at |
|
2020 |
|
2019 |
|
|
|
|
|
Assets |
|
|
|
Property, plant and
equipment |
|
123,923 |
|
113,651 |
|
Deferred tax asset |
|
105 |
|
63 |
|
Total non-current
assets |
|
124,028 |
|
113,714 |
|
|
|
|
|
Inventories |
|
14,280 |
|
11,092 |
|
Prepayments |
|
4,254 |
|
2,350 |
|
Trade and other
receivables |
|
6,839 |
|
6,912 |
|
Derivative financial
assets |
|
1,160 |
|
102 |
|
Cash and cash equivalents |
|
21,562 |
|
9,383 |
|
Total current
assets |
|
48,095 |
|
29,839 |
|
Total
assets |
|
172,123 |
|
143,553 |
|
|
|
|
|
Equity and
liabilities |
|
|
|
Share capital |
|
74,696 |
|
56,065 |
|
Reserves |
|
137,337 |
|
140,730 |
|
Retained loss |
|
(73,240 |
) |
(88,380 |
) |
Equity attributable to
shareholders |
|
138,793 |
|
108,415 |
|
Non-controlling interests |
|
15,913 |
|
16,302 |
|
Total
equity |
|
154,706 |
|
124,717 |
|
|
|
|
|
Provisions |
|
3,404 |
|
3,346 |
|
Deferred tax liabilities |
|
1,724 |
|
3,129 |
|
Term loan facility - long term
portion |
|
193 |
|
1,942 |
|
Cash-settled share-based
payment - long term portion |
|
1,692 |
|
540 |
|
Total non-current
liabilities |
|
7,013 |
|
8,957 |
|
|
|
|
|
Term loan facility - short
term portion |
|
322 |
|
529 |
|
Cash-settled share-based
payment - short term portion |
|
285 |
|
– |
|
Income taxes payable |
|
1,902 |
|
163 |
|
Trade and other payables |
|
7,895 |
|
8,697 |
|
Overdraft |
|
– |
|
490 |
|
Total current
liabilities |
|
10,404 |
|
9,879 |
|
Total
liabilities |
|
17,417 |
|
18,836 |
|
Total equity and
liabilities |
|
172,123 |
|
143,553 |
|
|
|
|
|
Condensed
consolidated statements of cash flows(in
thousands of United States dollars, unless indicated
otherwise) |
|
|
|
|
Unaudited |
Three months ended |
|
Nine months ended |
|
September 30, |
|
September 30, |
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
|
|
|
|
|
|
Cash generated from
operations |
7,393 |
|
4,886 |
|
|
23,764 |
|
14,003 |
|
Net interest paid |
(74 |
) |
(33 |
) |
|
(337 |
) |
(129 |
) |
Tax paid |
(2,048 |
) |
– |
|
|
(4,082 |
) |
(608 |
) |
Net cash from
operating activities |
5,271 |
|
4,853 |
|
|
19,345 |
|
13,266 |
|
|
|
|
|
|
|
Cash flows used in
investing activities |
|
|
|
|
|
Acquisition of property, plant
and equipment |
(8,007 |
) |
(5,583 |
) |
|
(15,928 |
) |
(14,909 |
) |
Purchase of derivative
financial asset |
– |
|
– |
|
|
(1,058 |
) |
– |
|
Proceeds from disposal of
subsidiary |
– |
|
– |
|
|
900 |
|
1,000 |
|
Net cash used in
investing activities |
(8,007 |
) |
(5,583 |
) |
|
(16,086 |
) |
(13,909 |
) |
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
Dividends paid |
(1,129 |
) |
(883 |
) |
|
(3,110 |
) |
(2,503 |
) |
Payment of lease
liabilities |
(30 |
) |
– |
|
|
(87 |
) |
– |
|
Shares issued - equity
raise |
12,538 |
|
– |
|
|
12,538 |
|
– |
|
Share options exercised |
– |
|
– |
|
|
30 |
|
– |
|
Net cash used in
financing activities |
11,379 |
|
(883 |
) |
|
9,371 |
|
(2,503 |
) |
|
|
|
|
|
|
Net increase/
(decrease) in cash and cash equivalents |
8,643 |
|
(1,613 |
) |
|
12,630 |
|
(3,146 |
) |
Effect of exchange rate
fluctuations on cash held |
1,280 |
|
1,063 |
|
|
39 |
|
(15 |
) |
Net cash and cash equivalents
at the beginning of the period |
11,639 |
|
9,742 |
|
|
8,893 |
|
11,187 |
|
Net cash and cash
equivalents at the end of the period |
21,562 |
|
9,192 |
|
|
21,562 |
|
8,026 |
|
|
|
|
|
|
|
Caledonia Mining (AMEX:CMCL)
Historical Stock Chart
From Feb 2024 to Mar 2024
Caledonia Mining (AMEX:CMCL)
Historical Stock Chart
From Mar 2023 to Mar 2024