Caledonia Mining reports 3% increase in gross revenue

LONDON, UK: Caledonia Mining Corporation Plc has released its operating and financial results for the year ended December 31, 2023. The company reported a gross revenue of $146.3 million, a 3% increase from 2022, attributed to a 7.8% rise in the average gold price.

However, gross profit fell to $41.5 million from $61.8 million due to higher production costs, particularly at the Blanket Mine and the Bilboes oxide mine, which ceased operations on October 1, 2023.

Administrative expenses surged by 46% to $17.4 million, driven by higher salaries and advisory service fees. EBITDA dropped to $29.7 million, impacted by the Bilboes mine costs and unexpected expenses in labor, power, and foreign exchange losses. The on-mine cost per ounce increased to $1,047, with all-in sustaining costs up by 64.6% to $1,445 per ounce.

Adjusted EPS plummeted to 17.1 cents from 219.9 cents in 2022. Net cash from operations was $14.8 million, and net cash positions turned negative to $(11.0) million. Despite these challenges, Caledonia maintained its 2023 dividend at 14 cents per share, payable on April 26, 2024, signaling confidence in its operations.

Looking ahead, the company’s performance in early 2024 aligns with expectations, and efforts are underway to improve the economics of the Bilboes project by reducing capital expenditures.

Mark Learmonth, Chief Executive Officer, commented: “The performance of Blanket remains robust; operating cash flows across the second half of the year show a continuation of the improved operating performance compared to the first half of 2023. We continue to see Blanket as the solid foundation for growth as we pursue our strategy to become a multi-asset gold producer.

“I am pleased that the Company also announces today its quarterly dividend of 14 cents which reflects managements confidence in the operations of the business. Future dividend payments will reflect operational performance and an assessment of capital allocation.

“At a consolidated level, group profitability for the Quarter was adversely affected by several unanticipated one-off costs, and by higher than expected labour and power costs. Management has taken steps to address these and is evaluating measures to reduce electricity consumption and improve labour efficiency. Gold sales in the Quarter exclude 3,057 ounces of gold that were held as work-in-progress as at December 31, 2023 and which were sold early in January 2024.

“We are highly encouraged by the results from the underground exploration programme at Blanket which we restarted during the year; in general, the drilling results, which we announced in July 2023 and January 2024, indicated significantly better widths and grades than previously modelled and we expect to publish a revised resource statement in the second quarter of 2024 which should  incorporate an increase in Blanket’s life of mine.

“Caledonia’s vision has evolved over the last couple of years from being a relatively small operator of a single asset towards a strategy focussed on becoming a multi-asset, Zimbabwe focussed gold producer with an ambition to produce over 250,000 ounces of gold per annum.  The acquisition of Bilboes in January 2023 builds on the earlier acquisitions of Motapa and Maligreen to create a portfolio of high-quality exploration and development assets in Zimbabwe.

“I look forward to announcing the results of the updated feasibility study for the Bilboes sulphide project soon and firmly believe that we have the potential to create and deliver greater shareholder value from the future inclusion of this project in our production profile.”