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Caledonia Mining hails record quarterly production

Snapshot

  • Caledonia Mining operates the Blanket gold mine in Zimbabwe
  • New central shaft at the mine has been sunk
  • Target is 80,000oz per year by 2022
  • Stake in Blanket now up to 64%
Caledonia Mining Corporation - Caledonia Mining into ramp-up phase as central shaft excavation completes

Quick facts: Caledonia Mining Corporation PLC

Price: 720 GBX

AIM:CMCL
Market: AIM
Market Cap: £82.91 m
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How is it doing

In January 2020, Caledonia completed the acquisition of an additional 15% stake to take its holding in the Blanket mine to 64%.

In the year to 31 December, revenue was US$75.8mln, up from US$68.4mln, as operations at the Blanket mine marked new production records for the year.

Gold production was 55,182 ounces, up from 54,511 ounces, while output in the fourth quarter set a new record of 16,876 ounces.

The company reported a gross profit of US31.1mln with a gross margin of 41%, up from 32%.

Total dividend of 27.5 cents per share.

The current year is expected to see production between 53,000 and 56,000 ounces – excluding contributions from the Central Shaft project, which is due to kick-in during the fourth quarter.

Following the commissioning of the new area, production can begin a ramp-up with 2021 production estimates pitched at 75,000 and 2022’s output forecast at 80,000 ounces.

 

What the boss says: Steve Curtis, chief executive

"I am delighted by Blanket Mine's strong performance which resulted in a record level of production in the [fourth] quarter."

“Increased production, combined with lower on-mine costs per ounce and an improved gold price, resulted in a substantial increase in profit.”

 “The excellent financial and operating performance is particularly pleasing given the difficult start to the Year and is testament to the resilience and tenacity of the management and workforce at Blanket and at Caledonia.”

 

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Inflexion points

  • 45% production growth planned
  • Rising expected cash generation from 2020 expected
  • Strong future cash generation leaves resources available for strategic purposes: target-rich environment
  • All-in Sustaining cost guidance of $810/oz – $850/oz
  • Operating costs to move down as new shaft ramps up: due to increased production volume, economies of scale and better mine efficiencies
  • One of the highest dividend yields in the gold industry

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Caledonia Mining's Steve Curtis talks application to continue Blanket operations

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