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Caledonia Mining Corporation Plc Results for the quarter ended September 30, 2021

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November 11, 2021: Caledonia Mining Corporation Plc ("Caledonia" or the "Company" - https://www.commodity-tv.com/ondemand/companies/profil/caledonia-mining-corporation-plc/) announces its operating and financial results for the quarter and the nine months ended September 30, 2021 (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 $33.5 million, a 31.9 per cent increase on the $25.4 million achieved in the third quarter of 2020 ("Q3 2020").
  • Gross profit of $15.7 million, a 25.6 per cent increase on the $12.5 million in Q3 2020, due to higher production and lower cost per ounce offset in the Quarter by a lower gold price.
  • EBITDA of $15.1 million, a 30 per cent increase on the $11.7 million in Q3 2020 at a margin of 45 per cent (Q3 2020: 46 per cent). 
  • The on-mine cost per ounce[1] decreased 8% from $758 in Q3 2020 to $695 due to higher production which spread fixed costs over more production ounces.
  • The all-in sustaining cost per ounce decreased 19% from $1,119 in Q3 2020 to $909. This reflects the decrease in on-mine cost per ounce and reduced sustaining capex.
  • Basic IFRS earnings per share ("EPS") increased by 56 per cent from 36.6 cents in Q3 2020 to 57.1 cents.
  • Adjusted EPS increased by 102 per cent from 34.1 cents in Q3 2020 to 68.9 cents.
  • Net cash from operating activities of $7.1 million (Q3 2020: $5.3 million) due to higher operating profit offset by higher working capital.
  • Net cash and cash equivalents of $13.0 million (Q3 2020: $21.6 million).
  • In October 2021, the Company declared and paid a quarterly dividend of 14 cents per share. This was the seventh increase in the quarterly dividend since October 2019 and more than double the 6.875 cents declared only two years ago in October 2019

Operating Highlights

  • 18,965 ounces of gold produced in the Quarter (Q3 2020: 15,155 ounces) which is a new quarterly production record for Blanket and reflects the contribution of Central Shaft.
  • 48,872 ounces produced in the Nine Months, a 14 per cent increase on the 42,887 ounces produced in the first nine months of 2020.

Outlook

  • Production guidance for the year to December 31, 2021 has been narrowed at the top end of previous guidance at 65,000 to 67,000 ounces.
  • Due to, inter alia, historic delays in the completion of the Central Shaft arising from COVID-19, the need to remediate the poor electricity supply from the Zimbabwe Electricity Supply Authority, and an upgrade to the workers’ village to accommodate a larger workforce, capital expenditure at Blanket in 2022 is now expected to be $27million.
  • Caledonia has completed the purchase of the mining claims at Maligreen in the Zimbabwe midlands.
  • Caledonia continues to evaluate Connemara North, in respect of which it has an option to purchase.
  • The Company will consider further investment opportunities in Zimbabwe and elsewhere.

Steve Curtis, Chief Executive Officer, commented:

“This has been another excellent quarter: record quarterly production of almost 19,000 ounces signifies the contribution that Central Shaft is already making. The commissioning and subsequent ramp-up of activity at Central Shaft met our best expectations and we have therefore been able to narrow our production guidance to the top end of our previous range. We remain on track to hit our 80,000 ounce target from 2022 onwards[2].

“Revenue in the Quarter was 32 per cent higher than in Q3 2020 due to a 42 per cent increase in the quantity of gold produced and sold offset by a 7 per cent decrease in the average realised gold price. Net cash generated by operations in the Quarter was $7.1 million, compared to $5.3 million in Q3 2020. The increase was due to higher gross profit (due to increased production and lower costs per ounce), offset by increased working capital.

 

“The completion of Central Shaft and the resultant increase in production means that Caledonia can execute other areas of its growth strategy, such as the agreement to acquire Maligreen which was announced during the quarter, which has an estimated inferred resource of 940,000 ounces of gold in 15.6 million tonnesat a grade of 1.88 grammes per tonne[3]. This transaction was completed after the end of the Quarter .

“In October 2021, the Company declared and paid an increased dividend of 14 cents per share. This was the seventh increase in the quarterly dividend since October 2019 and an increase of 104 per cent from 6.875 cents in October 2019. These dividend increases reflect the strong financial and operating performance of the business. The board will continue to review Caledonia's future dividend distributions as appropriate. 

 

“In October, the advance dividend loan account due from the Gwanda Community Share Ownership Trust (“GCSOT”), a 10 per cent shareholder in Blanket, was repaid. Henceforth GCSOT will receive its full entitlement to 10 per cent of dividends paid by Blanket. Investment in our local communities and employees (who also hold a 10 per cent shareholding in the mine through an employee trust) is key to a successful business and I am therefore delighted that the loan to the GCSOT is now fully repaid and that the community will start to receive its full dividend amount.

 

“Caledonia’s immediate strategic focus following the commissioning of the Central Shaft project earlier this year is to increase production, reduce operating costs and increase the flexibility to undertake further development and exploration, thereby safeguarding and enhancing Blanket’s long-term future.”

For further information please contact:

Caledonia Mining Corporation Plc

Mark Learmonth

Camilla Horsfall

Tel: +44 1534 679 802

Tel: +44 7817 841793

WH Ireland

Adrian Hadden/ Andrew De Andrade

Tel: +44 20 7220 1751

Blytheweigh Financial PR

Tim Blythe/Megan Ray

Tel: +44 207 138 3204

3PPB

Patrick Chidley

Paul Durham

Tel: +1 917 991 7701

Tel: +1 203 940 2538

Curate Public Relations (Zimbabwe)

Debra Tatenda

Swiss Resource Capital AG

Jochen Staiger

Tel: +263 77802131

www.resource-capital.ch

[email protected]

 

Note: This announcement contains inside information which is disclosed in accordance with 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, 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.

 

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 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.

 

Condensed consolidated statements of profit or loss and other comprehensive income

(in thousands of United States Dollars, unless indicated otherwise)

 

 

 

 

Unaudited

 

 

 

 

 

 

 

For the

 

Three months ended

 

Nine months ended

 

 

 

September 30,

 

September 30,

 

 

 

2021

2020

 

2021

2020

 

 

 

 

  

 

  

Revenue

 

33,496

25,359

 

89,193

71,874

 

Less: Royalty

 

(1,679)

(1,271)

 

(4,471)

(3,599)

 

Production costs

 

(13,729)

(10,399)

 

(38,948)

(32,537)

 

Depreciation

 

(2,351)

(1,143)

 

(5,743)

(3,457)

 

Gross profit

 

15,737

12,546

 

40,031

32,281

 

Other income

 

12

27

 

42

4,736

 

Other expenses

 

(1,254)

(305)

 

(5,395)

(1,827)

 

Administrative expenses

 

(1,906)

(2,539)

 

(5,261)

(5,361)

 

Cash-settled share-based expense

 

(243)

(231)

 

(426)

(1,177)

 

Net foreign exchange gain

 

413

985

 

341

4,694

 

Fair value gains (losses) on derivative assets

 

27

 

(107)

(121)

 

Operating profit

 

12,759

10,510

 

29,225

33,225

 

Finance income

 

4

4

 

11

36

 

Finance cost

 

(17)

(91)

 

(365)

(390)

 

Profit before tax

 

12,746

10,423

 

28,871

32,871

 

Tax expense

 

(4,423)

(4,993)

 

(11,318)

(11,410)

 

Profit for the period

 

8,323

5,430

 

17,553

21,461

 
 

 

 

  

 

  

Other comprehensive income

 

 

  

 

  

Items that are or may be reclassified to profit or loss

 

 

  

 

  

Exchange differences on translation of foreign operations

 

(330)

(88)

 

(149)

(1,146)

 

Total comprehensive income for the period

 

7,993

5,342

 

17,404

20,315

 
  

 

  

 

  

Profit attributable to:

 

 

  

 

  

Owners of the Company

 

6,939

4,433

 

14,183

17,807

 

Non-controlling interests

 

1,384

997

 

3,370

3,654

 

Profit for the period

 

8,323

5,430

 

17,553

21,461

 
  

 

  

 

  

Total comprehensive income attributable to:

 

 

  

 

  

Owners of the Company

 

6,609

4,345

 

14,034

16,661

 

Non-controlling interests

 

1,384

997

 

3,370

3,654

 

Total comprehensive income for the period

 

7,993

5,342

 

17,404

20,315

 

 

 

 

  

 

  

Earnings per share

 

 

  

 

  

Basic earnings per share ($)

 

0.57

0.37

 

1.15

1.50

 

Diluted earnings per share ($)

 

0.57

0.37

 

1.15

1.50

 

Condensed consolidated statements of financial position

(Unaudited) (in thousands of United States Dollars, unless indicated otherwise)

 

As at

 

September 30,

December 31,

 

 

 

2021

2020

 

 

 

 

  

Assets

 

 

 

 

Property, plant and equipment

 

142,965

126,479

 

Exploration and evaluation asset

 

4,354

6,768

 

Deferred tax asset

 

102

87

 

Total non-current assets

 

147,421

133,334

 
 

 

 

  

Inventories

 

18,134

16,798

 

Prepayments

 

7,110

1,974

 

Trade and other receivables

 

11,828

4,962

 

Income tax receivable

 

27

76

 

Derivative financial assets

 

1,184

 

Cash and cash equivalents

 

13,213

19,092

 

Assets held for sale

 

500

 

Total current assets

 

50,312

44,586

 

Total assets

 

197,733

177,920

 
 

 

 

  

Equity and liabilities

 

 

  

Share capital

 

74,696

74,696

 

Reserves

 

138,161

138,310

 

Retained loss

 

(61,673)

(71,487)

 

Equity attributable to shareholders

 

151,184

141,519

 

Non-controlling interests

 

18,649

16,524

 

Total equity

 

169,833

158,043

 
 

 

 

  

Liabilities

 

 

  

Provisions

 

3,427

3,567

 

Deferred tax liabilities

 

8,699

4,234

 

Cash-settled share-based payment - long term portion

 

931

1,934

 

Lease liabilities - long term portion

 

260

178

 

Total non-current liabilities

 

13,317

9,913

 
 

 

 

  

Loans and borrowings

 

70

408

 

Cash-settled share-based payment - short term portion

 

1,768

336

 

Lease liabilities - short term portion

 

103

61

 

Income taxes payable

 

1,919

495

 

Trade and other payables

 

10,520

8,664

 

Overdraft

 

203

 

Total current liabilities

 

14,583

9,964

 

Total liabilities

 

27,900

19,877

 

Total equity and liabilities

 

197,733

177,920

 

Condensed consolidated statements of cash flows

(in thousands of United States Dollars, unless indicated otherwise)

 

Unaudited

 

 

 

 

 

 

  

For the

 

Three months ended

 

Nine months ended

  

 

 

September 30,

 

September 30,

  

 

 

2021

2020

 

2021

2020

  

 

 

 

  

 

   

Cash generated from operations

 

9,338

7,393

 

26,875

23,764

  

Interest received

 

4

 

7

36

  

Interest paid

 

(50)

(78)

 

(304)

(373)

  

Tax paid

 

(2,176)

(2,048)

 

(4,774)

(4,082)

  

Net cash from operating activities

 

7,112

5,271

 

21,804

19,345

  
  

 

  

 

   

Cash flows used in investing activities

 

 

  

 

   

Acquisition of property, plant and equipment

 

(8,564)

(8,007)

 

(22,332)

(15,928)

  

Acquisition and expenditure on exploration and evaluation assets

 

(449)

 

(1,423)

  

Proceeds on disposal of assets held for sale

 

500

 

500

  

Realisation (purchase) of derivative financial asset

 

 

1,082

(1,058)

  

Proceeds from disposal of subsidiary

 

 

340

900

  

Net cash used in investing activities

 

(8,513)

(8,007)

 

(21,833)

(16,086)

  
  

 

  

 

   

Cash flows from financing activities

 

 

  

 

   

Dividends paid

 

(2,108)

(1,129)

 

(5,614)

(3,110)

  

Term loan repayments

 

(100)

 

(306)

  

Payment of lease liabilities

 

(31)

(30)

 

(96)

(87)

  

Shares issued - equity raise (net of transaction cost)

 

12,538

 

12,538

  

Share options exercised

 

 

30

  

Net cash (used in) from financing activities

 

(2,239)

11,379

 

(6,016)

9,371

  
  

 

  

 

   

Net (decrease) / increase in cash and cash equivalents

 

(3,640)

8,643

 

(6,045)

12,630

  

Effect of exchange rate fluctuations on cash held

 

(19)

1,280

 

(37)

39

  

Net cash and cash equivalents at the beginning of the period

 

16,669

11,639

 

19,092

8,893

  

Net cash and cash equivalents at the end of the period

 

13,010

21,562

 

13,010

21,562

  
         

 

[1] Non-IFRS measures such as “on-mine cost per ounce”, “all-in sustaining cost per ounce” and “adjusted EPS” are used throughout this announcement. Refer to section 10 of the MD&A for a discussion of non-IFRS measures.

[2]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 (www.sedar.com) on May 26, 2021. 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.

[3]Refer to technical report entitled “Caledonia Mining Corporation Plc NI 43-101 Mineral Resource Report on the Maligreen Gold Project, Zimbabwe” by Minxcon (Pty) Ltd dated November 2, 2021 and filed on SEDAR on November 5, 2021.

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