TIDMCMCL
RNS Number : 9759V
Caledonia Mining Corporation PLC
13 August 2020
Caledonia Mining Corporation Plc
Results for the Quarter ended June 30, 2020
(NYSE AMERICAN: CMCL; AIM: CMCL)
August 13, 2020 : Caledonia Mining Corporation Plc ("Caledonia"
or the "Company") announces its operating and financial results for
the quarter and the six months ended June 30, 2020 (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 un-audited financial statements which are available on the
Company's website and which have been filed on SEDAR.
Financial Highlights for the Quarter
-- Gross revenues of $22.9 million, a 39 per cent increase on
the $16.5 million achieved in the second quarter of 2019 ("Q2
2019").
-- Gross profit of $9.2 million, a 30 per cent increase on the
$7.0 million in Q2 2019 at a gross margin of 40 per cent (Q2 2019,
42.5 per cent).
-- EBITDA (excluding net foreign exchange gains) of $9.6
million, a 35 per cent increase on the $7.1 million in Q2 2019 at a
margin of 41.9 per cent (Q2 2019, 43.0 per cent).
-- On-mine cost of $811 per ounce (Q2 2019, $534 per ounce).
-- All-in sustaining cost(3) of $868 per ounce (Q2 2019, $656 per ounce).
-- Basic IFRS earnings per share ("EPS") of 43.1 cents (Q2 2019, 210.9 cents).
-- Adjusted EPS (3) of 36.8 cents (Q2 2019, 24.6 cents).
-- Net cash from operating activities of $4.0 million (Q2 2019, $2.1 million).
-- Net cash and cash equivalents of $11.7 million (December 31, 2019, $8.9 million).
-- Total dividend paid in the Quarter of 7.5 cents per share; a
further dividend at the increased rate of 8.5 cents per share was
paid in July.
Operating Highlights
-- 13,499 ounces of gold produced in the Quarter (Q2 2019,
12,712 ounces); 27,732 ounces produced in the First Half (first
half of 2019, 24,660 ounces).
-- Tonnes mined and milled in the Quarter increased by 5 per
cent compared to Q2 2019; grade and recoveries were also slightly
improved.
-- Improved safety performance due to intensive management intervention.
-- Equipping of Central Shaft continued in the Quarter.
Effect of COVID-19 and Outlook
-- COVID 19 had a negligible effect on production in the
Quarter. Production continued at approximately 93% of target during
the three-week lockdown which started in Zimbabwe on March 30,
2020; production subsequently returned to above-normal levels and
production for the Quarter was only 1.2% below target but was above
target for the First Half of 2020. Production guidance for 2020
remains unchanged at 53,000 to 56,000 ounces.
-- Progress on the Central Shaft continued, but at a slower pace
due to a reduced contractor team. If current travel and transport
restrictions continue, delays in sourcing specialist contractors
and equipment may delay the completion of Central Shaft.
-- Blanket has made substantial contributions of $1,048,000 to
the in-country fight against COVID-19 in addition to incremental
production costs of $509,000 which were directly related to
COVID-19.
-- All-in sustaining costs for the Quarter excluding COVID-19
related production costs were $831 per ounce.
-- On-track to achieve on-mine cost guidance for 2020 of between
$693 to $767 per ounce and all-in sustaining cost guidance of
between $951 to $1,033 per ounce.
-- Caledonia's April dividend of 7.5 cents per share was
deferred and was paid in May 2020 when management had ascertained
the negligible effect of COVID-19 on operations. The July dividend
was increased by 13.3 per cent to 8.5 cents per share following the
continued strong financial and operating performance. Further
dividends will depend upon, inter alia, Blanket maintaining
production, while also considering the balance between delivering
returns to shareholders and pursuing the significant growth
opportunities within Zimbabwe.
Caledonia will be hosting an online presentation and Q&A
session open to all investors on Thursday the 13th of August 2020
at 16:00 UK time (17:00 South Africa/Zimbabwe, 11:00AM ET, 08:00AM
Pacific Time).
Dial in numbers:
New York +1 212 999 6659
South Africa Toll Free 0800 980 512
Standard International Access +44 (0) 20 3003 2666
UK Toll Free 0808 109 0700
USA Toll Free +1 866 966 5335
Call Password Caledonia Mining Results
Steve Curtis, Chief Executive Officer, commented:
"I am delighted by Blanket Mine's continued strong financial and
operating performance in the second quarter of 2020. The management
initiatives which were implemented in 2019 have continued into 2020
and have resulted in a 12.4 per cent increase in gold production in
the first six months of 2020 compared to the same period of 2019.
This continued improvement is despite the challenges we encountered
as a result of the COVID-19 pandemic: production in the initial
3-week lockdown in early April was 7 per cent below target but was
better than planned in the remainder of the Quarter. Therefore,
production for the entire Quarter was only 1.2 per cent below plan;
production for the first six months of 2020 was 2.5 per cent above
plan. This trend has continued into July with July's production
also exceeding expectations. The resilience of Blanket's operations
during this difficult period is testament to the outstanding
commitment of the entire team at Blanket Mine. We therefore remain
on track to achieve our production guidance for 2020 of between
53,000 and 56,000 ounces of gold.
"Cost control in the quarter continued to be excellent, but a
comparison of the costs for the Quarter to costs in the second
quarter of 2019 is complicated by special factors which reduced the
costs in previous quarters and increased the costs in this Quarter.
The on-mine cost per ounce in the Quarter was $811 compared to $534
in Q2 of 2019. However, the costs in Q2 2019 benefitted from the
devaluation of the Zimbabwe dollar which reduced the cost of
electricity in that quarter to an artificially and unsustainably
low level: the electricity cost in Q2 2019 was only $447,000
compared to an average quarterly cost of approximately $2.3 million
in the five preceding quarters. Production costs in the Quarter
were adversely affected by, inter alia, $509,000 relating to the
COVID-19 pandemic and $871,000 relating to increased maintenance
costs of the fleet of trackless mining equipment. 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 $4.0 million in the Quarter compared to $2.1 million in Q2 of
2019. Caledonia ended the Quarter with net cash and cash
equivalents of $11.7 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.
"The improved operating environment, which I have referred to in
previous quarters, has been sustained, although the country
continues to face challenges. The interbank foreign exchange market
was suspended in March 2020 but, by the end of June, an equivalent
mechanism was introduced as a result of which the local currency
has devalued further and allows us to better protect our workers
from the effects of high inflation.
"Interruptions to the supply of electricity from the grid have
continued, but Blanket can manage these using its increased suite
of diesel generators. We have completed an evaluation of a solar
project to provide some of Blanket's power supply and reduce its
dependence on imported power and diesel gensets during daylight
hours. The Company has now resolved to construct a 12MW solar plant
at a cost of approximately $12 million, which is expected to
provide 100% of Blanket's baseload electricity demand during
daylight hours and approximately 27% 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.
Subject to the continuation of travel and transport restrictions
arising from the COVID-19 pandemic, this project could be
operational by mid-2021.
"The coronavirus pandemic had no appreciable effect on Blanket's
production in the Quarter. However, work on Central Shaft has been
slower than planned because several members of the supervisory team
returned to South Africa when the lockdown started in late March.
Due to continued travel restrictions, it has not been possible to
replace these team members. Although the slower rate of work has
not yet delayed the project significantly, the project requires
specialised equipment and contractors to travel to Blanket from
South Africa which under the restrictions is not currently
possible. We are receiving a high level of support from the
Zimbabwe government to address these issues with the relevant
authorities in South Africa. It is not possible to predict when
travel and other restrictions will be lifted so that work can
resume on the project as planned and it is likely the timetable for
commissioning of the Central Shaft will be extended to an
indeterminate extent. This may affect the anticipated build-up in
production which is currently expected to be 75,000 ounces of gold
in 2021 and 80,000 ounces of gold from 2022 onwards(4) but it is
not currently possible to provide revised guidance.
"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 which means the
cumulative increase in the quarterly dividend in 2020 is 23.6 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) . The projected gold production figures in this news release
are explained in the management discussion and analysis
("MD&A") dated March 17, 2020. Refer to technical report dated
13 February 2018 entitled "National Instrument 43-101 Technical
Report on the Blanket Mine, Gwanda Area, Zimbabwe (Updated February
2018), a copy of which was filed by the Company on SEDAR on March
2, 2018 for the key assumptions, parameters, and methods used to
estimate the mineral resources and mineral reserves from which
planned gold production, as set out in this news release, is to be
derived and risks that could materially affect the potential
development of the mineral resources or mineral reserves. Mr Paul
Matthews, the Company's qualified person and Group Mineral Resource
Manager, supervised the preparation of the technical information in
the technical report and supervised the preparation of the
technical information contained in this news release.
For further information please contact:
Caledonia Mining Corporation Plc
Mark Learmonth Tel: +44 1534 679 800
Maurice Mason Tel: +44 759 078 1139
WH Ireland (Nomad & Broker)
Adrian Hadden/ James Sinclair-Ford Tel: +44 20 7220 1751
Blytheweigh
Tim Blythe/Camilla Horsfall/Megan Tel: +44 207 138 3204
Ray
3PPB
Patrick Chidley Tel: +1 917 991 7701
Paul Durham Tel: +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.
C ondensed Consolidated Statement of Profit or Loss (unaudited)
($'000's) 3 months ended 6 months ended
June 30 June 30
2019 2020 2019 2020
Revenue 16,520 22,913 32,440 46,515
Royalty (864) (1,146) (1,683) (2,328)
Production costs (7,571) (11,451) (17,340) (22,138)
Depreciation (1,052) (1,141) (2,100) (2,314)
-------- --------- --------- ---------
Gross profit 7,033 9,175 11,317 19,735
Other income 749 2,791 2,038 4,709
Other expenses (220) (1,314) (309) (1,522)
Administrative expenses (1,309) (1,275) (2,705) (2,822)
Profit on sale of subsidiary - - 5,409 -
Net foreign exchange gain 21,645 1,486 24,925 3,709
Cash-settled share-based payment (9) (762) (370) (946)
Derivative financial assets fair
value loss (194) (113) (324) (148)
Operating profit 27,695 9,988 39,981 22,715
Net finance (cost)/income 28 (129) (20) (267)
-------- --------- --------- ---------
Profit before tax 27,723 9,859 39,961 22,448
Tax expense 223 (3,507) (1,296) (6,417)
-------- --------- --------- ---------
Profit for the period 27,946 6,352 38,665 16,031
-------- --------- --------- ---------
Profit attributable to:
Shareholders of the Company 23,303 5,134 32,621 13,374
Non-controlling interests 4,643 1,218 6,044 2,657
-------- --------- --------- ---------
Profit for the period 27,946 6,352 38,665 16,031
-------- --------- --------- ---------
Earnings per share (cents)
Basic 210.9 43.1 299.4 114.3
Diluted 210.8 43.0 299.3 114.1
Adjusted 24.6 36.8 51.6 93.5
Dividends declared per share
(cents) 6.875 16.0 13.75 23.5
----------------------------------- -------- --------- --------- ---------
Condensed Consolidated Statement of Cash Flows (unaudited)
($'000's)
3 months ended 6 months ended
June 30 June 30
2019 2020 2019 2020
Cash flows from operating activities
Cash generated from operations 2,484 5,413 9,117 16,371
Net interest paid 16 (123) (96) (263)
Tax paid (362) (1,315) (608) (2,034)
-------- -------- -------- --------
Net cash from operating activities 2,138 3,975 8,413 14,074
Cash flows used in investing activities
Acquisition of property, plant and
equipment (4,186) (3,228) (9,326) (7,921)
Purchase of derivative financial
asset - (1,058) - (1,058)
Proceeds from disposal of subsidiary - - 1,000 900
-------- -------- -------- --------
Net cash used in investing activities (4,186) (4,286) (8,326) (8,079)
Cash flows from financing activities
Dividends paid (882) (1,012) (1,620) (1,981)
Payment of lease liabilities - (32) - (57)
Proceeds from share option exercises - 30 - 30
Net cash used in financing activities (882) (1,014) (1,620) (2,008)
Net decrease in cash and cash equivalents (2,930) (1,325) (1,533) 3,987
Effect of exchange rate fluctuations
on cash held 1,063 (861) (1,779) (1,241)
Net cash and cash equivalents at
beginning of the period 9,742 13,825 11,187 8,893
Net cash and cash equivalents at
end of the period 7,875 11,639 7,875 11,639
--------------------------------------------- -------- -------- -------- --------
Summarised Consolidated Statements of Financial Position (unaudited)
($'000's) As at June 30 Dec 31
2020 2019
Total non-current assets 119,506 113,714
Inventories 12,010 11,092
Prepayments 2,915 2,350
Trade and other receivables 7,170 6,912
Cash and cash equivalents 11,639 9,383
Derivative financial assets 1,112 102
Total assets 154,352 143,553
----------
Total non-current liabilities 6,488 8,762
Short-term portion of term loan
facility 458 529
Trade and other payables 8,111 8,697
Income tax payable 1,267 163
Cash-settled share-based payments
- short term portion 73 195
Bank overdraft - 490
Total liabilities 16,397 18,836
----------
Total equity 137,955 124,717
---------- ---------
Total equity and liabilities 154,352 143,553
-------------------------------------------- -------------- ---------- ---------
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 or visit www.rns.com.
END
IR FLFFRTAIFLII
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