Caledonia Mining Corporation (LON:CMCL) Q2 & H115 results
Market Cap: £26.6m; Current Price: 41.5p
Rising costs and lower gold price squeezes profits
- Gold produced in Q215 was down to 10,401oz compared to 11,223oz in Q214. Gold production for H115 was also down to 20,361oz compared to 21,464oz in H114.
- All-in sustaining costs (AISC) rose to US$1,030/oz Au in Q215 compared to US$878/oz Au in Q214. H115 AISC was also up to US$984/oz Au compared to US$890/oz Au in H114.
- Gold sold in Q215 was down to 10,401oz compared to 11,223oz in Q214. Gold sold for H115 was also down to 21,174oz compared to 23,433oz in H114.
- Average realised gold price during Q215 of US$1,174/oz Au down from US$1,265/oz Au in Q214. H115 realised gold price was also down to US$1,187/oz Au from US$1,267/oz Au in H114.
- Net profit to shareholders decreased to $0.3m in Q215 from US$1.8m in Q214. Net profit for H115 was also down to US$1.9m from US$4.3m in H114.
- Net cash at H115 was down to US$1.3m from US$8.1m in 2014.
NORTHLAND CAPITAL PARTNERS VIEW: H115 has been a difficult start to the year for Caledonia Mining Corporation with rising costs, lower gold production levels and lower realised gold prices squeezing margins. Caledonia is currently sinking, deepening or equipping four shafts at its Blanket Mine located in Zimbabwe as it looks to increase production levels in 2016. With the gold price at its current level of c. US$1,119oz Au, Q315 is likely to continue to be difficult for Caledonia. On a positive note, the expansion in 2016 is not only likely to increase production levels but also decrease all-in sustaining costs increasing the Company’s profitability and allowing it to better weather a lower gold price environment.
Action Hotels (LON:AHCG): OPENING
Market Cap: £84m; Current Price: 57p
First Premier Inn hotel
- Premier Inn Sharjah, which is a 168 room freehold hotel located in the centre of Sharjah, opened fully yesterday following some delay. It’s good news for the group where a good relationship exists with Premier Inn, amongst other well-known branded hotel groups.
- It is the first internationally branded economy hotel in the Emirate and is well located for business and leisure travellers and management expect Premier Inn Sharjah to break even within its first three months operations.
NORTHLAND CAPITAL PARTNERS VIEW: This is positive news for AHCG and it helps to further underpin forecasts for the current year where consensus is looking for c. US$15m of EBITDA for FY15. Not much change in the share price over the past two quarters despite the stock trading at a c. 49% discount to Adj. NAV per share of 84p and offering investors a dividend yield over 3%. Today’s news is positive and puts the group on track in building towards a portfolio of 16 hotels and 2,820 rooms by the end of 2017.