eBusiness Weekly
Enacy Mapakame
Caledonia Mining Corporation Plc says gross profit for the quarter to June 30, 2022 jumped 28,8 percent to US$17,9 million from US$13 million during the same period in the prior year, as its local unit — Blanket Mine achieved record production for the quarter.
Blanket Mine recorded a 20 percent increase in gold production to 20,091 ounces in the quarter, which was a new production record for any quarter.
For the first half of the current financial year, 38,605 ounces were produced representing a 29 percent increase from the same period last year.
For the quarter under review, gross revenues of US$36,99 million were achieved, representing a 23,4 percent increase on the US$29,98 million achieved in the second quarter of 2021.
EBITDA — excluding asset impairments, depreciation and net foreign exchange gains rose 23,8 percent to US$17,8 million.
According to Caledonia, this represents EBITDA (excluding asset impairments, depreciation, and net foreign exchange gains) for the six months ended June 30, 2022 of US$31,5 million from US$23,5 million in the same quarter last year.
On-mine cost of US$692 per ounce was recorded against US$715 per ounce recorded during the comparable quarter. All-in sustaining cost (“AISC”)1 of $925 per ounce was 3 percent above same period last year.
The lower on-mine cost per ounce was offset by higher administrative costs.
Basic earnings per share (EPS) was US87,7 cents from US21,1 cents while adjusted EPS of 56,2 cents from US62,6 cents.
Net cash from operating activities of US$16,7 million, representing 23,9 percent increase on the comparable prior year.
Dividend for the quarter amounted to US14 cents per share in addition to another of US14 cents paid in April.
Commenting on the results, Caledonia chief executive officer Mark Learmonth said the cost containment measures, as well as firm gold prices, helped the group achieve good performance for the quarter and the first half of the year.
“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 percent increase in IFRS earnings per share and a 31 percent increase in net cash from operating activities over the comparable quarter in 2021,” he said in an operations update for the period.
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.
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 percent of Caledonia’s fully diluted equity, and a 1 percent net smelter royalty (“NSR”) on the project’s revenues.
“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 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.
“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,” said Learmonth.
He further highlighted 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.
Meanwhile, the group’s immediate strategic focus continues to be on Blanket and which is on track to meet target production of between 73-80 000 ounces of gold for this year, with first-half production of 38 605 ounces of gold.
Said Learmonth: “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.
“Caledonia will also consider other investment opportunities in the Zimbabwe gold sector within the constraints of its financing and management capacity.”
