Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL, VFEX:CMCL) latest quarterly results have drawn a positive but measured response from Cavendish Capital Markets.
The broker described the figures as “strong”, highlighting record revenue of $71 million and gross profit of $37 million for the three months to September, lifted by higher gold prices and solid output from the Blanket mine in Zimbabwe.
Production dipped to 19,100 ounces after a temporary halt at one orebody following a fatal incident, but Caledonia has reiterated full-year guidance of 75,500 to 79,500 ounces.
To keep output on track, costs have risen, with on-mine costs at $1,203 an ounce and the all-in sustaining cost (AISC) at $1,937. Cavendish expects these to peak in the second half before easing.
Underlying cash generation remained robust, with earnings before interest, tax, depreciation and amortisation of $34 million and net profit of $15 million.
Caledonia ended the quarter with net cash of $26 million and is forecast to close the year with $42 million. A quarterly dividend of 14 US cents a share keeps the yield near 2%.
Cavendish’s note points to the imminent release of the feasibility study for the Bilboes sulphide project as the next key catalyst, describing it as “eagerly awaited” and likely to shape sentiment in the months ahead.
The shares are up 5% at 2,110p, while Cavendish has nudged its target price down to 3,020p from 3,150p, maintaining its upbeat stance with around 50% implied upside.