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Caledonia Mining continues to build strength in Zimbabwe

Last updated: 10:35 28 Mar 2024 GMT, First published: 06:36 09 Feb 2024 GMT

Snapshot

  • Caledonia Mining keeps dividend flat as sign of confidence in Blanket mine
  • Caledonia Mining reiterating 2024 guidance reassuring, says broker
  • Caledonia Mining tackles 2023 challenges with optimism for 2024 as it maintains dividend
Caledonia Mining Corporation - Caledonia Mining into ramp-up phase as central shaft excavation completes

About the company

Caledonia Mining Corporation PLC is a profitable cash-generative gold producer with a strong growth profile. The company's primary asset is the Blanket Mine in Zimbabwe.

Production in 2023 was in line with guidance at around 75,100 ounces following the completion of a new central shaft at Blanket.

Caledonia has also invested in other projects with a strategy to become a multi-asset gold producer in Zimbabwe.

How it is doing

28 Mar 2024

Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) declared a quarterly dividend of US$0.14 per share as it reported a robust performance of Zimbabwe's Blanket mine in 2023, with cash flows improving in the second half.

The dividend was kept the same level as the prior year even though, as revealed in a trading update at the start of this month, production was in line with expectations but one-off costs took the edge off profits.

Chief executive Mark Learmouth said: “We continue to see Blanket as the solid foundation for growth as we pursue our strategy to become a multi-asset gold producer.”

Following encouraging underground exploration restarted during the year, he said a revised resource statement is planned to be published in the second quarter of 2024 that incorporates an increase in Blanket's life-of-mine.

18 Mar 2024

Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) has appointed Tariro Gadzikwa as a new independent director. At the same time, Steve Curtis, former CEO, will step down from the non-executive role he has held since June 2022.

Chairman John Kelly said: "I am delighted to welcome Tariro to Caledonia's board. She has significant board experience and particular expertise in audit, risk management, corporate finance and finance strategy development. Her skills will be of great value to the board.

04 Mar 2024

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.

What the brokers say

04 Mar 2024

Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL)’s comment that production and costs at the 64%-owned Blanket mine for 2024 to date have been consistent with guidance provides some reassurance in the profit warning, notes house broker Liberum.

Zimbabwe-focused Caledonia has already guided this year to production of 74-78,000oz (100% basis) at US$870-970/oz on-mine cost and US$1,370-1,470/oz AISC.

Caledonia also indicated that most of the causes of the profit downturn were one-offs and will drop out of the 2024 numbers.

What management says

28 Mar 2024

Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) chief executive Mark Learmonth tells Proactive's Stephen Gunnion the company faced a challenging 2023, primarily due to poor production in the first half of the year at its core asset, the Blanket Mine in Zimbabwe, and an underperformance in a small-scale oxide project. However, the latter half of the year saw substantial improvement in Blanket's production.

The company also encountered increased costs, notably in labour and electricity, along with one-off administrative expenses, which have been addressed. To mitigate labour costs, Caledonia initiated more efficient timing systems for workforce management, particularly for their new, larger, and lighter shaft operations. For electricity, the company plans to reduce consumption and has already made strides by substituting diesel usage with a solar project.

Due to improving cash flows, Learmonth said Caledonia maintained its quarterly dividend at 14 cents.

Caledonia Mining tackles 2023 challenges with optimism for 2024 as it...

Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) chief executive Mark Learmonth tells Proactive's Stephen Gunnion the company faced a challenging 2023, primarily due to poor production in the first half of the year at its core asset, the Blanket Mine in Zimbabwe, and an underperformance...

3 hours, 19 minutes ago