Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) this week reported a strong financial and operational performance for 2024, supported by higher gold prices and stable production levels.
At the same time, the company told investors that it had opted to enhance the project’s ongoing feasibility study – to improve the project and its economics.
Chief executive Mark Learmonth joined the Proactive studio to discuss the gold miner’s performance and what comes next.
We take a closer look at what was said here.
Proactive: Joining me is Caledonia Mining CEO Mark Learmonth. Mark, very good to speak with you.
Could you talk us through the results, what were the highlights?
Mark Learmonth: Yeah. So, it was a strong end to a reasonably good year.
Production for the quarter was just over 20,000 ounces, and for the year about 78,000 ounces. So it’s within our guidance range, clearly helped by the higher gold price.
For the quarter, it was averaging $2,600; for the year, it was $2,300. That flowed through into a big increase in revenue. Revenue was 25% up for the year and the quarter. Gross profit for the year was $77 million, compared to $41 million last year.
For the quarter, it doubled from $10 million to $20 million. That flows through to earnings per share - adjusted EPS for the quarter was $0.44, compared to $0.03 in Q4 2023.
And for the year, it was nearly $1.30, compared to just under $0.10 for 2023. So a very substantial improvement, both operationally and helped by the gold price.
Proactive: Mark, why were the results delayed?
Mark Learmonth: Purely for technical reasons. Right at the end of the audit process, the auditors identified an error going back to 2019, relating to the calculation of deferred tax. Deferred tax isn't tax - deferred tax is accounting.
So, to be clear, this has no impact on our actual tax liabilities and payments. It just affected the calculation of unrealized foreign exchange gains and losses, which then flows into accounting profit or loss.
There’s no effect on cash flows. It is frustrating - this dates back six years.
We just needed a week or so to understand what happened.
The results we’ve just published include a restatement of the financials for 2022 and 2023. Full detail is set out in Note 40 of the accounts.
Proactive: Mark, you also announced that the timeline for the Bilboes feasibility study has been extended. Why has this been done?
Mark Learmonth: There's quite a lot of new stuff we need to consider, some of which only materialised in the last month or so.
One of those is the potential to export concentrate from Bilboes.
If we can do that, we wouldn't need to spend about $8 million on a BIOX plant.
It might also have implications for the tailings facility, which wouldn’t need to be double-lined.
Another option we're looking at is relocating the tailings facility from flat terrain at Bilboes to the Motapa property, where it could be supported by a wall, reducing capex. This is a big project, and it's important for Caledonia.
We owe it to ourselves and shareholders to evaluate every opportunity to optimise it.
Proactive: Can you give us an update on exploration at Motapa and Blanket?
Mark Learmonth: In 2024, we had a very good outcome from exploration at Blanket, which resulted in a substantial increase in our resource base and reserves, allowing us to extend the life of mine. That was very good news.
We also completed our first exploration phase at Motapa toward the end of the year. We found exciting mineralisation in areas we expected, but also in a new area.
We're doing more exploration in 2025 to evaluate near-term revenue opportunities and also longer-term sulfide potential, which could integrate with Bilboes.
Proactive: And the outlook for the next six months, Mark? Gold comfortably above $3,000 an ounce?
Mark Learmonth: Yeah, gold comfortably at $3,000 an ounce - we must use that to harvest cash.
We must also invest in Blanket for its longer life. It now has a mine life to the mid-2040s, and we’re confident it will extend beyond that.
So we need to invest to improve Blanket’s robustness and resilience.
At the same time, we need to work out the best way to commercialise Bilboes and evaluate near-term revenue opportunities at Blanket, Motapa, and Bilboes, which may substantially enhance cash generation over the next two years.
Proactive: Okay, I hope you'll keep us updated on progress on all of those fronts.