Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) warned that one-off costs will mean a reduction in profits this year even with a strong production performance from its Blanket gold mine in Zimbabwe.
Production for 2023 was 75,416 ounces of gold with revenues in line with expectations, but increased costs and several significant one-off charges in the final quarter of the year have resulted in lower profits, said the statement.
Overtime payments and power costs at Blanket both rose, the gold miner added, alongside staff termination payments.
Financing bills also increased while there was a one-off impairment charge for a VAT refund claim at the Blanket Mine solar project.
As a result of the above, adjusted profit before tax in 2023 will be materially below market expectations, said the miner.
Mark Learmonth, chief executive, said: "It is regrettable that, at a group level, we have been adversely affected by a series of higher-than-expected costs in the second half of 2023 which affected full-year profitability.
"The performance of Blanket Mine remains strong and, notwithstanding some unforeseen overtime and power cost issues in the second half, has met guidance and produced a robust performance for the second half of 2023."
Many of these costs will not recur, addedCaledonia, especially those related to the Bilboes development, which is now on care and maintenance.
Production and costs at Blanket in 2024 to date are also within guidance. said the statement. with new measures brought in to reduce electricity costs.
"A number of the other cost items are not anticipated to be recurring, whereas others have arisen from our decisions to invest in the business, most notably around personnel and advancing the Bilboes sulphide project,” commented Learmonth.
At the end of 2023, Caledonia had cash on hand of US$6.7 million and overdrafts and term loans of US$17.7 million.