Caledonia Mining Corporation Plc (CMCL) on Q1 2022 Results - Earnings Call Transcript

Camilla Horsfall: Welcome to our Q1 results Caledonia. You've got Steve Curtis our CEO, Mark Learmonth our CFO, Dana Roets our COO, Maurice Mason our Vice President of Corporate Development, and then myself, Camilla Horsfall, I'm the Vice President of Investor Relations. If you have any questions, please can you either just write them in the Q&A or raise your hand and we will unmute you at the end of the presentation. So I'm now going to pass you over to Steve and Mark and they're going to talk through the results. Steve Curtis: Thanks, Camilla. Yeah. Good afternoon, everybody. We are going to go through a presentation that's being prepared for the one results, and Camilla will share the screen as presentation is obviously available on our website. And if we go through it quickly, you've always got an opportunity to go back and have a look later. So thank you once again for joining us. Obviously, the disclaimer as usual and you'll be very familiar with that. So we've got a mixture here of sort of a summary results in financial results, I'm obviously going to ask Mark to do the financial results. You will have seen these results before because we announced production numbers as a particular time and we put out the MD&A and the Q1 results. So all of this should be familiar to you, but just to reemphasize the quality of the quarter. Production ounces 40% up on the previous quarter, on the comparable quarter, 2021, my apologies, average gold price, nothing in our control there, but we will beneficiaries of a higher gold price, which resulted in revenues 37% up. Pleasingly, gross profit 63% up. An EBITDA, 49% up on the comparable quarter. Also Blanket's is well known for all-in sustaining costs, show a reduction of 7%, management they continued to do a very good job in controlling costs even as we ramp up production. And then profit attributable to shareholders up 30%, and adjusted earnings per share, and Mark will talk a little bit more about the adjustments to arrive at that number, 62.5 since -- for the quarter, remembering we pay $0.14 a quarter in terms of dividend. And therefore, you can see that the business is very cash-generative, very profitable, and we are returning some of that too to shareholders. Moving onto the next slide, our safety performance. We have had an excellent track record of safety but as we reported previously, we unfortunately had a fatality in February, and as ever we send our condolences to the family and the colleagues of the deceased. This was a very unfortunate accident and all the necessary follow up our procedures have taken place. But the statistics of lost-time injury frequency rates nicely down, and we continue to be a 100% focused on safety, especially as we get more and more people on the mine. And the higher level of activity, meaning that there are more blocks, there are more open areas, there are more -- is more timing going on. So safety gets the requisite amounts of time and attention. And now that COVID has subsided and we are able to be in customer proximity to each other, the Nyanzvi training program and education program that Dana runs at the mine, that is back and it's operational. And that's very, very important to reinforce safety, the disciplines the culture. So it's important for you to know that Nyanzvi is back in and running and we are working very hard in our safety performances. This is just a summary of many of the things that you probably are also familiar with. I've already spoken about the answers. But importantly, the higher production is due to the increased tons, and that is critical for us to achieve 80,000 ounces and an improved grade which was over and above the average mine grade. But we are very happy that we are sticking to the mining plan, that you get some pleasant surprises and you get some unpleasant surprises in our business, and we are at the moment benefiting from higher grade and, we're very happy with that. The same-store troughed continues to contribute. Although hoisting waste that just frees up all the capacity as the number four shaft. And the reason why it's wasting waste mainly is because there is a lot of developments and connecting work between the various levels to the Central Shaft. And it is as fast as efficient, we can move the way seem to that area, and we can then focus on the mining that can be brought with all can be brought up the number four shaft. And at the moment to achieve the tonnages that we need to get 80,000 ounces, we have pretty much got the capacity to achieve the 80,000 ounce just using four shaft. And as you can see, we've built up a significant stockpile because we're actually mining more than we are milling and crushing. And that is because we are in a phase of bringing a new what we call , which is a new into production process. So at the moment, we are not relaxing on the mining side and we're building up the stockpile. So at any point in time, if we have a bad day in some aspects, we've got capacity on surface. We continue to reiterate our guidance for 2022, 73,000 to 80,000 ounces. And the run rates that we have reported in the MD&A for April of 86,800 ounces. If you extrapolate that out, that is just about 81,000 ounces. So we are very proud of a good first quarter and we are seeing it continue as we go into the second quarter. So hats off to our production team, they are really delivering and making the asset work that they've spent four, five years, actually putting into operation. Okay, so we're getting into the financial numbers. This is an appropriate time to hand over to Mark. So Mark over to you. Thank you. Mark Learmonth: Thank you, Steve. So very briefly, revenue was up 36%, was driven largely by 28% increase in gold sales. Now Steve already mentioned a 6% higher go price. Royalties’ stays fixed up 5% of revenues. Production cost got a little bit more detail in the next slide. So although the dollar value went up, there was actually a 17% reduction in online cost per ounce and depreciation in terms of substantial, because don't forget now that we've commissioned the Central Shaft, unfortunately, we got depreciated. So that's going up a bit. So hence gross profit up by 63% from $10.5 million to just under $17 million. G&A up by $1.6 million to $2.4 million, that's driven by the considerably increase in the quarterly charge for insurance. I got some more information on how the G&A is made up. higher advisory expenses in the quarter. Net foreign exchange gain was just under million dollars. That reflects a considerable step-up in the rates of devaluation of the RTGS $ against the U.S. dollar in the quarter. Then other $3 million. That includes $1.7 million of the mark-to - market costs on the various hedges, half a million dollars in exploration and evaluation, asset impairment, and that primarily relates to the decision to walk away from the Connemara North asset and about $4,000 of LTIP costs. .: The more on production, which largely comprises wages and salaries, consumables, electricity. wages and salaries increased quite substantially from $4.4 million to $5.9 million, but don't forget we had nearly a 24% increase in headcount at the mine; the mine employs about 2,000 people now as we've increased personnel levels to cater for the increased rates of production. But also don't forget that the comparable quarter, quarter 1 of 2021 was a very poor quarter. I mean, 13,000 ounces so there was no production bonus attributable to that quarter. Whereas clearly, in the first quarter 2022, it being a good quarter, there was a 12% production bonus. So hence the increase in wages and salaries. Late last year, Very late last year, we took the decision to pay online work because entirely in U.S. dollars which has come through a sort of an inflationary effect, which arises from the fact that although the local currency rates of inflation in Zimbabwe is extremely high, for about a 100%, that's not reflected in the rate of devaluation of the local currency. And so, happens is if you're paying your workers in local currency and accepting the local inflation rate. Once that higher-value has been translated back into U.S. dollars, it shows a very substantial increase in the dollar denominated costs. So we'll cut through that by now paying our workers entirely in U.S. dollars and with this we're seeing no appreciable inflation arising from that. Consumables up from $4.2 million to $5.1, that's 21% increase. Part of that reflects the increase in terms of , but it is fair to say that during the quarter, we did see price increases in most of the major imports being explosives, drill steels, and cyanide. And it's fair to say that after the end of the quarter, we seen further price rises. I think along with all other producers, I think we must prepare ourselves throughout the higher input price environment. Although as I hope, you'll see from this discussion that even if we are seeing inflation consumables that is for a relatively small components of our overall online cost base. It's the way we didn't expect to see any significant inflation. And also electricity, we believe we've got the electricity costs one under control. Moving onto electricity then. Notwithstanding the higher production, electricity increased from $2.1 million to $2.3 million and that's because late last year we spend some money to install some more auto tap changes at Number 4 Shaft, which means the in quarter 1 of this year, we substantially reduced the amount of diesel that we used. Over the course of 2021, the amounts of diesel we used increased from 400,000 liters in the first quarter to about 1.1 million liters in the fourth quarter. And in this quarter dropped back by 83,000 liters of the offset Biovance and increased in the price of diesel having seen that success, we are now intending to. And I'm not seeing a further deterioration in the quality of the grid power. We are now intending to invest about 3 million more dollars to further protect ourselves from the grid to improve the quality of the grid supply, we get and therefore substantially reduce the cost the amount of diesel that we use, and therefore reduce our overall electricity costs. So we feel like going forward, we're going to very good handle on the electricity cost. Work in progress just reflects the movements in golden work in progress. I think also in this quarter reflects the buildup of the old stockpile. I don't really think there was much more to explain in terms of production costs other than to say rather the bottom of the table for I'm pleased to see the online cost per ounce fall from $836 to $698 an ounce. Here, we see the G&A. I think we should all recognize that as the world stumbles out of COVID, we are now going to see an increase in Investor Relations costs and travel costs as the activity levels return to normal. So that explains the increase in Investor Relations and travel. Advisory services, that increased quite significantly and that relates to legal fees and also executive search fees related to replacements of several senior executives. And wages and salaries increased from just over $1 million to about $1.1 million. Again, that reflects increased head count mainly in Johannesburg. As the mine has got bigger and more complex, we are now having to increase the compliments of technical stuff in Johannesburg. So people like rock engineers to rock engineers to make sure the roofs stays up and people to improve the quality of our mine planning. Should we on? So that just pulls together the, as I mentioned, the online costs also make 36 to 698. And then all in sustaining costs falls from just over $1,000 an ounce to $968 an ounce. Taxation that the ability to for external viewers to see through the tax charge for the group in terms of underlying profitability, it's very, very difficult because the main elements of tax beings involved with income tax is involved with deferred tax. The calculation, the basis of local currency denominated accounts, whereas we report obviously in the U.S. dollar accounts. It's safe to say that the main components of tax comprised of income tax in Zimbabwe, about 2.9 million, and also deferred tax, just under 1.5 million. If you express that, income tax plus deferred tax as a proportion of the overall PBT arising in Zimbabwe, it comes out at about 32% of Zimbabwean tax, and in a corresponding quarters is about 34%. So there is underlying stability in terms of the -- if the tax charge in respect of the underlying profitability. And then on top of that, we incur what I'd called tax leakage being tax arising in South Africa on intercompany profits. And then also withholding tax arising on the movement from Zimbabwe to South Africa and from Zimbabwe to the UK. So that explains how the overall tax charge arises at what it is. Cash flow is very strong. Cash flow before working capital increased 9.7 million to 13.5 million. Working capital continued to increase somewhat in the quarter, clearly not as dramatically as in the first quarter 2021, which was adversely affected by anomalies in the payment system. We are working hard to reduce the overall level of working capital in particularly inventory levels and that's going to be a continued area of focus for management. So net cash from operating activities, was just $10 million compared to over the very anemic $2 million in the first quarter of 2021. Net investing continues to be high, we spent $10 million in the quarter in Central Shaft and on the solar projects and we do expect to have very high rate of net investment in quarter 2 and into quarter 3 before it begins to taper off. The cash position remains strong. I think we've got some more information on cash on the next page, don't we. maps inflation, the balance sheet, very strong. Obviously, noncurrent assets increased driven by the rates of capital investments. Current assets, $35 million cash and cash equivalents of 15.3. The non-controlling interest of $21 million that reflects the 36% minority interest in Blanket Mine. And the noncurrent liabilities of 11.6, that's mainly deferred tax and closure provisions; current liabilities that's mainly trade and tax payables, which includes $4 million of derivative liabilities. The show is where the cash is, so here we show for the last sort of few quarters or so, the cash split between Zimbabwe, South Africa, the U.K. And you can see that the end of the quarter, the end of March 2022, we apparently have $5.8 million in Zimbabwe, being a combination of U.S. dollars and RTGS. Actually of $5.8 million, about $2.3 million was RTGS currency which is ring fenced against a 90-day lateral -- a 90-day lateral credit. So what happens is that other $5.82 million, $2.3 million in RTGS will be taken out of our bank account in Zimbabwe and a corresponding value in U.S. -- sorry, in South Africa Rands will appear in Caledonia Mining South Africa in June. So that's a new mechanism that we put in place in the course of the year to enhance our ability to move RTGS into a hard currency being Rands, which we then use to procure assets and stuff for the mine. So in Zimbabwe, actually, we were modestly overdrawn in the end of the quarter in RTGS. So we're not building up a pile of local currency, which is either unusable or unremittable, and we work very hard to maintain our position. Steve, do you want talk about the solar projects? Or Dana do you want to talk about the solar projects? You are on mute. Camilla Horsfall: Should l go straight to the video? Mark Learmonth: Yeah. Your speakers are mute. Steve Curtis: Sorry, let's get Dana to talk about the solar farm. Dana Roets: The solar farm is progressing quite well. And we should see during July that we sought commissioning and connecting to the mine. And we hope to be up and running fully by the end of July within August. You will see as the video as shown progress that the areas that we were going to -- that you can see the preparation for the solar panels in the beginning and then kind of to view almost complete all the solar panels being installed and . Mark Learmonth: That Video is a few weeks old left directors that dollar has moved on quite a bit since then. Dana Roets: You could, you can see the photograph in the rocketed top corner almost completed the installation on the solar panels and go within the next couple of months, we will start using solar panel, which we will help us quarter lock. Just want to remind everybody that these panels will be following the fund. Mark Learmonth: Yeah, so that they tilt, so that they follow the sun, to improve their efficiency. Just a word on the dividend, we paid dividend of $0.14 quarter, we've increased the dividend quite substantially over the last few years, but now we decided to hold it up $0.14 a share, given the high level of CapEx this year. And also as we begin to position the company to, say invest in new projects, of which Molly Green is probably the front runner. So the company's transitioning a little bit away from being a one-trick pony, focused on Blanket, to actually now beginning to look at investing in new projects, and hence is a pretty productive overtime to begin to accumulate some more cash so we can bring those projects forwards. Steve, I'm finished. Steve Curtis: Short and sweet, very nice to talk to a great results. So thank you, Mark. There are a couple of questions that have been typed into the Q&A session. I'll ask the team just to have a look at those. And if anybody else wants to ask a question, please raise your hand and then Camilla will drive the system accordingly. A - Mark Learmonth : Shall I do it cash increased dividends of pursue exploration. It's fair to say that over the last seven years or so, we've probably not done Blanket the justice deserves in terms of exploration expenditures. Exploration activities that historically been focused, just going deeper, deeper, and deeper. And in the last few years, we just not have the flexibility underground to do that. So we do intend to resume that deep-level exploration with the view to improve the confidence level that there's existing inferred resources that depth but also finding more material. This year, for memory, l think it's the back end of the year, we're proposing to do 15,000 meters of drilling, next year, 25,000 meters of drilling. But in addition to that, we also believe there's potential for drilling in the shallower areas of Blanket which have been historically, people are just going deeper. And we think there are scenarios there that merit further attention. In addition, we feel that those potential for exploration are immediately outside the existing mining area. So that's to the North and to the South. That also we'd like to begin to look at something called the stone formation, which is about 800 meters to a kilometer to the east of the current mining area. So there is actually quite a lot of exploration potential or are Blanket itself, which I thought could cost probably $2, $3 million a year. In addition to that we are looking at Maligreen. At the moment we're reevaluating all drill call with a view to improving the confidence level of the existing resource base, which is about 940,000 ounces at 1.9 grams a ton. We do intends to spend more money on exploration and it's going to be a balancing act between how much money we choose to retain in the business to fund those projects, and how much we choose to divert back to shareholders. When I say divert, that implies on use the money clearly, there's a use of money. So it's a balancing act. At this stage, we sort of pausing to let the fact pattern catch up with where we are. Not the only answer I can give to that question now. Steve Curtis : Thank you, Mark. Yes. How the increase in the DNO costs that's not just too particular to us. It seems to be reflective from the beginning of the COVID in pandemic looking across at the American listed companies, but the whole market has gone nuts. And it is a huge cost. We used to pay $80,000 a year in premium, we now paying just over a million. So that is very expensive. Joseph, the workforce, as Mark mentioned, is now being paid a 100% in U.S. dollars. So they are in the best situation to fund themselves against rising costs in the rising inflation in Zimbabwe. There's nothing more we can do to make their lives easier. They already paid above the unionized market rates and we pay a 100% in U.S. dollars. So they are they are in a good space from Zimbabwe perspective, but all of us are being affected by these rising fuel costs, and we'll just have to watch this space. Mark Learmonth : But it is fair to say that the complexity of the exchange rate environment in Zimbabwe must have beyond underestimated. The service dollar earners, our workers presumably benefit from the informal exchange rate which runs at a massive, massive premium, we have a way on looking at it to the official exchange rate. So that buying power in local currency is increasing very, very quickly indeed, which is probably on the more than our weighing the effect of genuine food price inflation. Dana Roets: Mark, if l can just add that currently, there is no compliance from the mindset. The fact that we are paying 100% compared to previously only paying 60. They work for us really in a good position. They're not complaining, they're happy, and even with some increases we see, they're in a much better position than last year. Mark Learmonth : I think Dana should talk about Maligreen? Steve Curtis : Yes, please. Dana Roets: The Maligreen, what we found is that a there is a in fact resource, and we've got enough information that are re-logging and having a look at a core that's all available, that we can upgrade that into improved resource. What's the word I'm looking for? Mark Learmonth : Improving the confidence of Dana Roets: Indicated resource. And we're busy with that work. It's about 80% compete, and then we will compile a new resource and report back to the market. But we are confident that we can actually upgrade the resource in refer to communicate. Mark Learmonth : I guess the idea then would be with increased confidence level, we would then proceed as quickly as we could to the feasibility study with the feed to make it making some money out of mine. The only other thing I can add to that, it may be that offsets could be able to taken by another asset which may be more attractive and therefore pushes modeling green down the pecking order. We do continue to look at other . Steve Curtis : Thanks, Mark. I think we've answered the next question in terms of the stages and new mining projects. Our projects, new projects are brown fields. They are not mining projects at the moment. So I think Dana has also that one already. Allan, you ask if exploration reveals increased resource? Can plant increased capacity relatively easily? You're obviously talking about at Blanket. And Blanket does have some spare capacity both in hoisting and in the CIL. But we are -- we will manage that situation because in the ramp-up process, we've got to get tons up to about 2,300 tons a day. We've got milling capacity at that rate once the new mill that is being installed is in operation, and we will have to then look at the cost of any incremental plant capacity. But that is not the big money. So I'm sure if the -- if additional resources are found that our economic to get out of the ground, then the right to engineering decisions can be made. Otherwise the other projects are not contiguous to Blankets, that'll be standalone. Mark Learmonth : I forget how much should be in turn ins. It's about -- I thought it's about $80,000, wasn't it? Dana Roets: $1.5 million. Mark Learmonth : Okay. But it's not big, is not a large amount of money and it's relatively quick, a newer environment to get these things. Dana Roets: I just want to add that, if we need to add another mold, it will not be as much as -- as the more boomers concerns the -- we've got three grand molds and then we curtailed one more, and the reground mold that we added now is actually -- added quite a lot of capacity. And we will -- in future if we look at expanding, we will add our , which is the Roth , add more big . The we added was not similar the $50,000, so it won't be as much as the , and it's modular. If you want to add another mold, guess you're talking about $80,000, if you want to do that. And then if you want to add -- given to the share Altex, that's roughly we just what the currently, we're adding an extra bank and that's about $200,000. So if we need to increase, you're looking at extra ten, maybe an extra broadly . Mark Learmonth : To the poodle or that in the context, the fact's this mine is making approximately $1 million a week of operating cash flow. Steve Curtis : Yeah. We'll ask a question about consensus about increasing consumable custom possible supply chain issues. Yes, well, we have to be cognizant of that at the moment. We're not experiencing any supply chain issues that we are experiencing certain consumable cost increases and explosives affected by the international changing pricing. So we are managing our working capital to the best of our ability. We are buying as intelligently as we can. But I think this is effective life, and we're just something that our procurement people have to watch very closely. We have the ability to shake with anybody is trying to take an opportunistic approach to these rising prices and trying to profit here. And we will keep a very close eye on that, but yes, we're seeing diesel prices going up already quite significantly. And as already spoken, we do use quite a lot of diesel without the gensets. The solar farm is very, very important to us. I just want to add work. You also see is that still has come across as probably capital projects. And then some of because of what we're testing, we see some deloads, not kind of work divisor better month or so that we see that that we all have all delayed because of the effect of the war. But we haven't seen severe increases yet, , diesel and steel and then some explosives. Mark Learmonth : On the question about supply chain, I don't know if we'll intended this, but we were some more concerned about the extent to ensure supply chain reliant on bringing goods up from South Africa through by bridge. And we were pleasantly surprised all of the virtually everything for the solar projects came through from the east, came through from the eastern border placed through Mozambique, and that actually worked very well. And also we're beginning to explore whether we can bring in projects from the west through Walvis Bay. So we're trying to create more flexibility to protect ourselves in the event at the South Africa border suffers in the same sort of disruption has happened last year when there was the insurrection in South Africa. Well, it's fair to say, most of our stuff does still come through by bridge. Steve Curtis : Mark, maybe you want to just look at Joseph Parish's question on cash flows and new money assets. Mark Learmonth : Joseph. Steve Curtis : Just below Wills. Mark Learmonth : With all that recent approved, these operation cash flows efficient acquisition for the sale of -- no, anything of any -- you mean Maligreen, a million ounces could possibly support a mine of say 50,000 ounces a year. That's going to cost about $60 million, $70 million. There's no way we could do that from our own internal cash resources. Even if you stop the dividend, that's not going to cover enough. When we make any investments evaluation, we take into account the -- obviously, the money that we expect to come from the project, many shares that we'd have to issue to fund the project. And at the moment, we believe if we didn't do anything, if we just ran Blanket for cash, we'd be able to distribute -- Maurice, what's the number today? It's about $2.75 a share? Maurice Mason: No, that would be leaving nothing in the till. Mark Learmonth : Yeah, just run it. If we just ran this business for cash, we could distribute $2.75. When we evaluate new projects such as Maligreen, we need to be comfortable that taking everything into account, both the shares would need to issue to fund the capital program. We need to be confident that the amount of cash we could distribute per share, fully diluted, must be appreciably more than say $2.75. Otherwise, it's not worthwhile. It's just not worthwhile. So we do take that into account. Dana Roets: Mark if l can take the question these new projects we got into production, l would say that within the next two years, hopefully we will start building a new mine and then if it's two years start to build a mine then it will take about 1.5 years that you will start breaking even and start making money. So I would say, within the next 3.5 year, four years, we will start seeing a new one looking after itself. But adding to production, I would say within next few years because the contribution from new project adding to the answers. Mark Learmonth : Building on what Dana just said, that just following on for what I said, that doesn't mean we would need to raise all the money for new project by issuance of equity. Clearly, we'd expect to build to raise some debt. And let's not forget, any new project this for any new project will be that we can export the gold ourselves and therefore that means that that project will be capable of debt funding. And then also we do expect to make some contribution to the costs through our own retained cash. It's not as though we'd have to go to the equity markets for all of the required funding. And let's face it if for whatever reason the equity markets are closed, whatever reason, we just do the project more slowly, just defer it and do it as we did for Central Shaft, just do it by phasing it so we reinvest the cash that we're generating ourselves. Steve Curtis : So thank you. Thank you to the team. Mark Learmonth : One more thing, I didn't see some comments somewhere to the management should put out some guidance about a recent announcement from Zimbabwe government relating to trying to clamp down on foreign exchange controls. So there was a -- I think Bloomberg reported a speech given by Mnangagwa. It is fair to say that Mnangagwa who makes the speeches and announces big picture policy changes. The detail invariably doesn't become clear for days if not weeks after that when speech has been then converted into practice guidance notes, issued by the Arbizet (ph) and all the relevance attached to instruments. So in respect to that particular change in policy, all we believe it means is that our existing overdraft facilities out the mine, probably being canceled, the $3 million of existing overdraft facilities are probably being canceled. Although, we know currently in overdraft right now. But we're confident but that's just a timing issue and we will get those overdrafts reinstated, not that we actually need them particularly. But just understanding that it's very difficult for us to respond quickly to those Bloomberg reports because the underlying facts take quite some time to establish. Steve Curtis : Mark and to support that even now we are hearing that the gold sector will be exempt from those new announcements made by the president. But until we see it in the statute instrument, which is the legal standing, we just have to keep talking to the relevant authorities. But as Mark says, it only becomes fact once the strategy instrument is published and then we adjust accordingly. But we've got our finger on the pulse, but Mark says, we're in a position where we can paddle our own boat which is very comfortable. Mark Learmonth : And then again, having said that, is January -- is fair to say that the various mechanisms that we use for moving money around the place, have stabilized and the system, although it's complex, works better that it has done for many years. So we're finding it, won't say easy, but we're certainly finding it very manageable to work in this environment, and I think that reflects the fact that , just much more in the way foreign exchange available in Zimbabwe. Steve Curtis : The last question coming from Anthony Mitchell. Maurice Mason: Total operating costs. I think -- Dana, if you have seen that, you can -- Dana Roets: January outcome cost operations were much cheaper than underground because first of all, your work forces looks smaller you talking about 300 people compared to the way we are employing over 2,000 now. And so that's why you can operate outcome cost mines can make money at one gram or tonnes to And I don't know if that answer your question, but normally, additionally, outcome cost mine can operate half a cost a Mark Learmonth : We've got quite a lot of information from our technical consultants regarding a sort of ballpark capital costs and ballpark operating costs for open cast and underground operations of particular type. But clearly before we make any investment decision, even if we all going to fund the thing through internal cash flow than for equity -- internal equity, we would do a feasibility study to get better for the clarity on that. Dana Roets: Okay. Good. The biggest of the surface operation is that you can get it up and running very, very quickly. Normally you can get it up and running and paying for itself within two years, while with the underground mines in and all, 10 years if you're lucky and then you start production, a lot less risky. Mark Learmonth : The only problem with open , everyone can see mistakes, whereas on the ground they're hidden. Dana Roets: Yeah. Mark Learmonth : Are you finished? Steve Curtis : Yeah. So that has answered all the questions, and I see no more coming in. So thank you to all the participants. Thank you to the team for answering. And we look forward to talking to you again and we're very pleased to being able to present the results of a very good quarter, and giving you an indication that the same short investment is beginning to pay off. And that therefore, we're confident to reiterate our guidance between 73,000 and 80,000 ounces. But as you see, April is already indicating that the mine is performing extremely well. So thank you. Thank you for participating, and we look forward to talking to you all again. Mark Learmonth : On our last note. This is going to be sad. This is Steve's final quarter, reporting quarter as Chief Executive. He'll be stepping down at the end of June. And on behalf of his colleagues, we'd like to thank him for all the work he's done since sort of like 2014 is we've rehabilitated the company. We've made some great progress and I'm very pleased handing it over in reasonable shapes. Thank you very much and well done. Steve Curtis : Thank you, Mark. And I know the team is going to be successful going forward. And it's very, very pleasing that the succession work we have done is paying off. The faces are going to be familiar to all of you, so you're in good hands. And I wish the team all the very, very best. Thank you all. Thank you, Mils. Camilla Horsfall: Great. Thank you.
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Caledonia Mining Corporation PLC (AMEX:CMCL) Sees New Price Target Amid Anticipated Growth

  • Caledonia Mining Corporation PLC (AMEX:CMCL) receives a new price target from Maxim Group, suggesting a potential increase of about 49.31%.
  • The feasibility study for the Bilboes project could significantly reduce upfront capital costs and enhance returns, potentially reshaping Caledonia's future outlook.
  • Despite a recent decrease in stock price to $13.80, solid performance in the first quarter sets the stage for a potential rerating in the second half of the year.

Caledonia Mining Corporation PLC (AMEX:CMCL) is a gold mining company primarily focused on operations in Zimbabwe. The company is known for its Blanket Gold Mine, which has been a significant contributor to its production. Caledonia competes with other gold mining companies, but its focus on Zimbabwe gives it a unique position in the market.

On May 14, 2025, Tate Sullivan from Maxim Group set a new price target for CMCL at $21, while the stock was trading at $14.07. This target suggests a potential increase of about 49.31%. The anticipated release of a feasibility study for the Bilboes project could be a major catalyst for this potential growth.

The feasibility study is expected to reshape Caledonia's future outlook. According to Panmure Liberum, a positive outcome could reduce upfront capital costs and enhance returns. A scaled-back development strategy focusing on concentrate production could minimize execution risks and eliminate the need for costly processing techniques.

The update on the Bilboes project could unlock substantial shareholder value. With strong global demand for precious metals concentrate, the trade-offs, such as slightly lower payability and increased transport costs, might be justified. This strategic shift could significantly impact CMCL's stock performance.

In the interim, Caledonia has reported solid performance in the first quarter, setting the stage for a potential rerating in the second half of the year. Currently, CMCL's stock price is $13.80, reflecting a decrease of approximately 3.33% or $0.48. The company's market capitalization is around $266.17 million, with a trading volume of 40,925 shares on the AMEX exchange.

Caledonia Mining Corporation PLC's Impressive Financial Performance

  • Earnings per share of $0.443, surpassing estimates.
  • Record annual results with operating cash flow increasing to $42 million.
  • Gross profit surged by 86% to reach $77 million.

Caledonia Mining Corporation PLC (AMEX:CMCL), listed on the NYSE American, is a gold mining company with a focus on Zimbabwe. The company has made significant strides in its financial and operational performance, as evidenced by its recent earnings report. CMCL's competitors include other gold mining companies, but its strategic focus on Zimbabwe sets it apart.

On March 31, 2025, CMCL reported earnings per share of $0.443, surpassing the estimated $0.16. This strong performance is part of a broader trend for the company, which has seen substantial financial progress. In 2024, CMCL reported record annual results, with operating cash flow increasing to $42 million from $14.8 million, driven by the production of 76,656 ounces of gold.

The company's revenue reached $47.5 million, exceeding the anticipated $44.2 million. This growth is consistent with CMCL's overall financial performance, as gross revenue rose to $183 million in 2024, up from $146.3 million in 2023. Gross profit also surged by 86% to reach $77 million, highlighting the company's ability to capitalize on favorable market conditions.

CMCL's financial turnaround is further evidenced by a net attributable profit of $17.9 million in 2024, compared to a net loss of $7.9 million the previous year. On a per-share basis, adjusted earnings were reported at 125.2 cents. The company has rewarded shareholders with a 14 cents per share dividend, reflecting its improved financial health.

The company's financial metrics provide additional insights into its performance. With a price-to-earnings (P/E) ratio of approximately 22.69, the market values CMCL's earnings favorably. The price-to-sales ratio of about 1.33 and enterprise value to sales ratio of approximately 1.38 indicate a reasonable valuation relative to revenue. The enterprise value to operating cash flow ratio of around 7.33 shows a strong cash flow position. Additionally, a low debt-to-equity ratio of about 0.064 and a current ratio of approximately 1.44 suggest financial stability and the ability to cover short-term liabilities.

Caledonia Mining Corporation PLC's Impressive Financial Performance

  • Earnings per share of $0.443, surpassing estimates.
  • Record annual results with operating cash flow increasing to $42 million.
  • Gross profit surged by 86% to reach $77 million.

Caledonia Mining Corporation PLC (AMEX:CMCL), listed on the NYSE American, is a gold mining company with a focus on Zimbabwe. The company has made significant strides in its financial and operational performance, as evidenced by its recent earnings report. CMCL's competitors include other gold mining companies, but its strategic focus on Zimbabwe sets it apart.

On March 31, 2025, CMCL reported earnings per share of $0.443, surpassing the estimated $0.16. This strong performance is part of a broader trend for the company, which has seen substantial financial progress. In 2024, CMCL reported record annual results, with operating cash flow increasing to $42 million from $14.8 million, driven by the production of 76,656 ounces of gold.

The company's revenue reached $47.5 million, exceeding the anticipated $44.2 million. This growth is consistent with CMCL's overall financial performance, as gross revenue rose to $183 million in 2024, up from $146.3 million in 2023. Gross profit also surged by 86% to reach $77 million, highlighting the company's ability to capitalize on favorable market conditions.

CMCL's financial turnaround is further evidenced by a net attributable profit of $17.9 million in 2024, compared to a net loss of $7.9 million the previous year. On a per-share basis, adjusted earnings were reported at 125.2 cents. The company has rewarded shareholders with a 14 cents per share dividend, reflecting its improved financial health.

The company's financial metrics provide additional insights into its performance. With a price-to-earnings (P/E) ratio of approximately 22.69, the market values CMCL's earnings favorably. The price-to-sales ratio of about 1.33 and enterprise value to sales ratio of approximately 1.38 indicate a reasonable valuation relative to revenue. The enterprise value to operating cash flow ratio of around 7.33 shows a strong cash flow position. Additionally, a low debt-to-equity ratio of about 0.064 and a current ratio of approximately 1.44 suggest financial stability and the ability to cover short-term liabilities.