Caledonia Mining records profits rise 24% in gold production



“This has been a terrific quarter and, indeed, half year”.

Business Reporter

Mining giant Caledonia Mining Corporation has posted a 24% rise in profit for the second quarter on record gold production from its Blanket mine in Gwanda saying the year had been “outstanding” so far.

Underlying earnings (EBITDA) rose to US$17.8mln from US14.0mln in the year-earlier quarter as revenue grew 24% year-on-year to US$36.99 million .

“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,” said chief executive Mark Learmonth. “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,” said Mark Learmonth company CEO.

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.

In July, Caledonia announced an agreement to buy Bilboes Gold Ltd, the holding company for a large, high-grade, open-pittable gold resource.

“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.

“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.

“2022 has been an outstanding year so far,” added Learmonth.

The company said it will continue to evaluate other investment opportunities in the Zimbabwe gold sector and elsewhere.

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