TIDMCMCL
RNS Number : 9630F
Caledonia Mining Corporation PLC
10 November 2022
Caledonia Mining Corporation Plc
Results for the quarter and nine months ended September 30,
2022
(NYSE AMERICAN: CMCL; AIM: CMCL; VFEX: CMCL)
November 10, 2022: Caledonia Mining Corporation Plc ("Caledonia"
or the "Company") announces its operating and financial results for
the quarter and the nine months ended September 30, 2022 (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 which have been filed on SEDAR.
Financial Highlights
-- Gross revenues in the Nine Months of $107.9 million, a 21.0
per cent increase on the $89.2 million achieved in the first nine
months of 2021.
-- Gross profit in the Nine Months of $50.5 million, a 26.1 per
cent increase on the $40.0 million achieved in the first nine
months of 2021.
-- EBITDA in the Quarter (excluding asset impairments,
depreciation, and net foreign exchange gains) of $16.9 million, an
11.8 per cent increase on the $15.1 million in the third quarter of
2021 ("Q3 2021"). This represents EBITDA (excluding asset
impairments, depreciation, and net foreign exchange gains) for the
Nine Months of $52.9 million (nine months to September 30, 2021:
$35.0 million).
-- On-mine cost per ounce for the Quarter of $734 (Q3 2021: $695 per ounce).
-- All-in sustaining cost ("AISC") per ounce for the Quarter of
$944 (Q3 2021: $870 per ounce). The 8.5 per cent increase compared
to Q3 2021 is due to higher on-mine cost per ounce and higher
administrative costs.
-- Basic IFRS earnings per share ("EPS") for the Quarter of 66.2 cents (Q3 2021: 57.1 cents).
-- Adjusted EPS for the Quarter of 60.7 cents (Q3 2021: 68.9 cents).
-- Net cash from operating activities in the Quarter of $8.9 million (Q3 2021: $7.1 million).
-- Net cash and cash equivalents at the end of the Quarter of
$6.2 million (Q3 2021: $13.0 million).
-- Total dividend paid in the Quarter of 14 cents per share paid
in July 2022; a further dividend at the same rate of 14 cents per
share was paid in October 2022.
Operating Highlights
-- 21,120 ounces of gold were produced in the Quarter, 11.4 per
cent higher than the 18,965 ounces produced in Q3 2021 and a new
quarterly production record.
-- 59,726 ounces were produced in the Nine Months, 22.2 per cent
higher than the 48,872 ounces produced in the first nine months of
2021.
Other highlights
Transaction to acquire the Bilboes gold project
-- On July 21, 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 g old
project in Zimbabwe ("Bilboes" or the "Project"). Subject to
satisfaction of the conditions to completion and to customary
adjustments to the purchase price to account for any extraordinary
liabilities incurred before 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.
-- The Project has NI43-101 compliant measured and indicated
mineral resources of 2.56 million ounces of gold at a grade of 2.26
g/t and inferred mineral resources of 576,672 ounces of gold at a
grade of 1.89 g/t[1]. This includes proven and probable mineral
reserves of 1.96 million ounces of gold at a grade of 2.29 g/t.
-- 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).
-- Caledonia is making progress towards satisfying the
outstanding conditions to complete the transaction: it has received
certain approvals from the Reserve Bank of Zimbabwe, and continues
to engage with the Competition and Tariff Commission, the Ministry
of Finance, the Ministry of Energy and Fidelity Printers and
Refiners (Private) Limited regarding further outstanding
approvals.
Acquisition of the Motapa gold exploration project in
Zimbabwe
-- On November 2, 2022, Caledonia announced that it has
purchased Motapa Mining Company UK Limited, the parent company of a
Zimbabwe subsidiary which holds a registered mining lease over the
Motapa gold exploration property in Southern Zimbabwe ("Motapa").
The Company made the purchase from Bulawayo Mining Company Limited,
a privately owned UK company.
Updated Mineral Resources and Technical Report for Maligreen
-- On November 7, 2022, Caledonia announced an update to the NI
43-101 compliant Mineral Resources statement at the Company's 100%
owned Maligreen project in the Zimbabwe Midlands ("Maligreen") and
the publishing of an updated technical report with an effective
date of September 30, 2022 (the "2022 Technical Report")[2]. The
2022 Technical Report replaces the previous technical report filed
on SEDAR in November 2021 as the current technical report for the
Maligreen project. Since Caledonia acquired the Maligreen claims in
November 2021 it has been focused on reviewing the geological work
conducted at the property with a view to upgrading the Mineral
Resources in 2022. In summary, the 2022 Technical Report states
Measured and Indicated Mineral Resources of 442 thousand ounces of
gold in 8.03 million tonnes at a grade of 1.71 g/t and Inferred
Mineral Resources of 420 thousand ounces of gold in 6.17 million
tonnes at a grade of 2.12 g/t.
Outlook
-- Increase production at Blanket Mine ("Blanket") to the target
of 80,000 ounces of gold per year [3] , 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 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 of the re-commencement of
activities.
-- Commission the 12MWac solar plant, which is expected to
provide 27 per cent of Blanket's total electricity demand.
Commenting on the announcement, Mark Learmonth, Chief Executive
Officer, said:
"This has been another terrific quarter: production of just over
21,000 ounces set a new quarterly production record. In both of the
last two quarters we have exceeded our quarterly production target
of 20,000 ounces and we are on-track to achieve the top end of our
annual production target of between 73,000 and 80,000 ounces of
gold.
"The benefit of higher production was diluted by a lower gold
price and a modest increase in costs as, in common with other
mining companies, we experience inflation on consumables and
diesel. Costs were also adversely affected by the increased use of
diesel generators due to a further deterioration in the grid
supply. However, we are now within a few weeks of seeing the
benefit of the new solar plant which is currently being
commissioned. This, along with other initiatives to reduce our
diesel consumption, should curb the inflationary pressure on our
costs.
"We have made good progress on implementing our strategy to
acquire a portfolio of high-quality exploration and development
assets in the Zimbabwe gold sector.
"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-pitable gold resource. Completion of the
transaction is subject to several conditions, and we are making
progress towards satisfying them. Once the transaction has
completed, we intend to prepare a feasibility study to identify the
most judicious way to commercialise the Project with regards 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 of the commencement of activity.
"The proposed acquisition of Bilboes also builds on the
acquisition of the Maligreen claims in November 2021. We have
evaluated the existing geological information which allowed us to
improve the geological confidence of approximately half the Mineral
Resources from Inferred to Measured and Indicated Mineral
Resources. This supports our confidence in the project and its
geological continuity.
"Last week we also announced the acquisition of Motapa, a large
exploration property which is contiguous to the Bilboes gold
project. Motapa was formerly owned and explored by Anglo American
Zimbabwe prior to its exit from the Zimbabwean gold sector in the
late 1990s. The project has a mining lease covering approximately
2,200 hectares. Motapa has been mined throughout most of the second
half of the 20th century. Caledonia understands that during this
period the region produced as much as 300,000 ounces of gold.
"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 11 November at 14.00 London Time
The zoom details are set out below
When: Nov 11, 2022 14.00 London Time
Topic: Q3 2022 Results Shareholder Call
Register in advance for this webinar:
https://caledoniamining.zoom.us/webinar/register/WN_odZTjNcNRyme5BI1HGiW7w
After registering, you will receive a confirmation email
containing information about joining the webinar.
Caledonia Mining Corporation Plc
Mark Learmonth Tel: +44 1534 679 802
Camilla Horsfall Tel: +44 7817 841793
Cenkos Securities plc (Nomad and Joint
Broker) Tel: +44 207 397 1965
Adrian Hadden Tel: +44 131 220 9771
Neil McDonald Tel: +44 131 220 9775
Pearl Kellie
Liberum Capital Limited (Joint Broker)
Scott Mathieson/Kane Collings Tel: +44 20 3100 2000
BlytheRay Financial PR
Tim Blythe/Megan Ray Tel: +44 207 138 3204
3PPB
Patrick Chidley Tel: +1 917 991 7701
Paul Durham Tel: +1 203 940 2538
Curate Public Relations (Zimbabwe)
Debra Tatenda Tel: +263 77802131
IH Securities (Private) Limited (VFEX
Sponsor - Zimbabwe)
Dzika Dhana Tel: +263 (242) 745 119/33/39
Lloyd Mlotshwa
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 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", "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, the satisfaction of all conditions precedent in
connection with the acquisition of Bilboes, the completion of the
acquisition and the issuance of the acquisition consideration, our
plans regarding a new feasibility study for Bilboes, the restarting
of the Bilboes oxides operation, our plans and timing regarding
further exploration and development and the commissioning of the
solar plant. 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 and Caledonia's
experience of project development in Zimbabwe and other
factors.
To the extent any forward-looking information herein constitutes
a financial outlook or future oriented financial information,
any such statement is made as of the date hereof and included
herein to provide prospective investors with an understanding of
the Company's plans and assumptions. 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 the completion of the acquisition of Bilboes, 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.
National Instrument 43-101 - Standards of Disclosure for Mineral
Projects ("NI 43-101") is a rule of the Canadian Securities
Administrators which establishes standards for all public
disclosure an issuer makes of scientific and technical information
concerning mineral projects. Unless otherwise indicated, all
reserves and resource estimates contained in this press release
have been prepared in accordance with NI 43-101 and the Canadian
Institute of Mining, Metallurgy and Petroleum Classification
System. These standards differ from the requirements of the U.S.
Securities and Exchange Commission (the "SEC"), and reserve and
resource information contained in this press release may not be
comparable to similar information disclosed by U.S. companies. The
requirements of NI 43-101 for identification of reserves and
resources are also not the same as those of the SEC, and any
reserves or resources reported in compliance with NI 43-101 may not
qualify as "reserves" or "resources" under SEC standards.
Accordingly, the mineral reserve and resource information set forth
herein may not be comparable to information made public by
companies that report in accordance with United States
standards.
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 Statements of Profit or Loss and Other Comprehensive
Income (unaudited)
($'000's) 3 months ended 9 months ended
September 30 September 30
2021 2022 2021 2022
Revenue 33,496 35,840 89,193 107,904
Royalty (1,679) (1,796) (4,471) (5,408)
Production costs (13,729) (15,802) (38,948) (44,663)
Depreciation (2,351) (2,670) (5,743) (7,372)
----------- ----------- ---------- ----------
Gross profit 15,737 15,572 40,031 50,461
Other income 12 14 42 17
Other expenses (1,254) (552) (5,395) (1,835)
Administrative expenses (1,906) (2,789) (5,261) (8,068)
Net foreign exchange gain 413 1,559 341 6,640
Cash-settled share-based
expense (243) (25) (426) (335)
Equity-settled share-based
expense - (94) - (176)
Derivative financial instrument
gains/(expenses) - 537 (107) (1,160)
----------- ----------- ---------- ----------
Operating profit 12,759 14,222 29,225 45,544
Net finance costs (13) (9) (354) (300)
----------- ----------- ---------- ----------
Profit before tax 12,746 14,213 28,871 45,244
Tax expense (4,423) (4,018) (11,318) (14,051)
----------- ----------- ---------- ----------
Profit for the period 8,323 10,195 17,553 31,193
----------- ----------- ---------- ----------
Other comprehensive income
Items that are or may
be reclassified to profit
or loss
Exchange differences on
translation of foreign
operations (330) (699) (149) (858)
Total comprehensive income
for the period 7,993 9,496 17,404 30,335
----------- ----------- ---------- ----------
Profit attributable to:
Owners of the Company 6,939 8,614 14,183 25,932
Non-controlling interests 1,384 1,581 3,370 5,261
----------- ----------- ---------- ----------
Profit for the period 8,323 10,195 17,553 31,193
----------- ----------- ---------- ----------
Total comprehensive income
attributable to:
Owners of the Company 6,609 7,915 14,034 25,074
Non-controlling interests 1,384 1,581 3,370 5,261
----------- ----------- ---------- ----------
Total comprehensive income
for the period 7,993 9,496 17,404 30,335
----------- ----------- ---------- ----------
Earnings per share (cents)
Basic IFRS 56.8 66.2 115.3 197.7
Diluted IFRS 56.7 64.4 115.1 197.7
Adjusted earnings per
share (cents) 68.9 60.7 183.2 178.8
Dividends declared per
share (cents) 13.0 14.0 36.0 42.0
------------------------------------ ----------- ----------- ---------- ----------
Condensed Consolidated Statements of Cash Flows (unaudited)
($'000's) 3 months ended 9 months ended
September 30 September 30
2021 2022 2021 2022
Cash flows from operating activities
Cash generated from operations 9,338 11,717 26,875 41,901
Interest paid (50) (27) (297) (116)
Tax paid (2,176) (2,767) (4,774) (5,993)
--------- ---------- ---------- ----------
Net cash from operating activities 7,112 8,923 21,804 35,792
Cash flows used in investing activities
Acquisition of property, plant and
equipment (8,564) (10,840) (22,332) (33,585)
Acquisition of exploration and evaluation
assets (449) (311) (1,423) (947)
Realisation of gold ETF - - 1,082 -
Proceeds on disposal of assets held
for sale 500 - 500 -
Proceeds from disposal of subsidiary - - 340 -
--------- ---------- ---------- ----------
Net cash used in investing activities (8,513) (11,151) (21,833) (34,532)
Cash flows from financing activities
Dividends paid (2,108) (2,709) (5,614) (7,197)
Repayment of gold loan - - - (3,698)
Proceeds from call options - 415 - 239
Term loan repayments (100) - (306) -
Payment of lease liabilities (31) (36) (96) (115)
--------- ---------- ---------- ----------
Net cash used in financing activities (2,239) (2,330) (6,016) (10,771)
Net decrease in cash and cash equivalents (3,640) (4,558) (6,045) (9,511)
Effect of exchange rate fluctuations
on cash and cash equivalents (19) (137) (37) (588)
Net cash and cash equivalents at
beginning of the period 16,669 10,862 19,092 16,265
Net cash and cash equivalents at
end of the period 13,010 6,167 13,010 6,167
-------------------------------------------- --------- ---------- ---------- ----------
Summarised Consolidated Statements of Financial Position (unaudited)
($'000's) As at December September
31 30
2021 2022
Total non-current assets 157,944 187,980
Inventories 20,812 19,675
Prepayments 6,930 3,885
Trade and other receivables 7,938 8,815
Income tax receivable 101 38
Cash and cash equivalents 17,152 8,256
Total assets 210,877 228,649
---------
Total non-current liabilities 12,633 6,725
Lease liabilities - short term
portion 134 127
Trade and other payables 9,957 12,340
Derivative financial liabilities 3,095 -
Income tax payable 1,562 1,867
Overdraft 887 2,089
Cash-settled share-based payments - short term
portion 2,053 827
--------- ----------
Total liabilities 30,321 23,975
--------- ----------
Total equity 180,556 204,674
--------- ----------
Total equity and liabilities 210,877 228,649
-------------------------------------------- --------- --------- ----------
(3) Refer to the technical report entitled "BILBOES GOLD PROJECT
FEASIBILITY STUDY" with effective date 15 December 2021 prepared by
DRA Projects (Pty) Ltd filed by the Company on SEDAR
(www.sedar.com) on 21 July 2022.
[2] Refer to technical report entitled " Caledonia Mining
Corporation Plc Updated NI 43-101 Mineral Resource Report on the
Maligreen Gold Project, Zimbabwe dated November 3, 2022 prepared by
Minxcon (Pty) Ltd and filed on SEDAR on November 7, 2022.
[3] 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.
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