Zim-focussed Caledonia Mining profits up 24%; says 2022 has been ‘outstanding’

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By Alois Vinga

CALEDONIA Mining Corporation plc has seen a 24% increase in profitability from its Blanket mine in Zimbabwe in the second quarter amid indications that the overall year’s performance will be much higher.

A latest performance report by the top miner shows that the underlying earnings rose to US$17,8 million from US$140 million in the year-earlier quarter as revenue grew 24% year-on-year to US$36,99 million.

Caledonia’s chief executive Mark Learmonth said the output was way above targets coming at an opportune time when gold prices are quite lucrative.

“”This has been a terrific quarter and, indeed, half year with second-quarter production of just over 20,000 ounces which set a record for any quarter. The first half of 2022 exceeded our expectations and we have now achieved our quarterly production target.

“Excellent production, along with a higher gold price and good cost control, has contributed to a 321% increase in IFRS earnings per share and a 31% increase in net cash from operating activities over the comparable quarter in 2021,” he said.

During the period on, mine costs fell to US$692 an ounce, from US$715 an ounce in the second quarter of 2021, although all-in sustaining costs (AISC) climbed 3% to US$925 per ounce due to higher administrative costs.

A recent agreement to buy Bilboes Gold Ltd, the holding company for a large, high-grade, open-pitiable gold resource is also expected to further spur productivity.

“The completion of the transaction is subject to several conditions, but once achieved we can prepare a feasibility study to identify the most judicious way to commercialise the project with regard to the availability of funding on acceptable terms,” said Learmonth.

He said Caledonia also intends to re-start the oxides operation at Bilboes under a tribute arrangement before completion of the transaction with a view to creating a cash-generative operation within approximately six months.

The AIM-traded miner said its immediate focus remains on the Blanket mine and that it is on track to meet its target production of between 73,000-80,000 ounces of gold for this year, with first-half output of 38,605 ounces.