Caledonia Mining Corporation: Results for the Second Quarter and First Half Year of 2014
(firmenpresse) - Caledonia Mining Corporation (TSX: CAL, OTCQX: CALVF, AIM: CMCL)
Results for the Second Quarter and First Half Year of 2014
August 12, 2014: Caledonia Mining Corporation (Caledonia or the Company - http://bit.ly/1hI8NBz -) announces its operating and financial results for the second quarter (Q2 or the Quarter) and first half year (H1 or Half Year) of 2014. All results are reported in Canadian dollars unless otherwise indicated. Following the implementation of indigenisation in September 2012, Caledonia owns 49% of the Blanket Mine in Zimbabwe. Caledonia continues to consolidate Blanket and the operational and financial information set out below is on a 100% basis unless indicated otherwise.
Operating and Financial Review
Q2 Q2ReH1 H1 Comment
2013sults 2013 2014
for
the
six
mont
hs
to
June
30
2014
inco
rpora
te
the
re-s
tated
earn
ings
for
Q1
2014
.
Cor
recte
d
fina
ncial
stat
ement
and
MD&A
for
Q1
2014
will
be
re-f
iled
2014
Gold 11,5811,2222,0621,46Gold production
produced 8 3 0 4 in Q2 2014 was
( adversely
oz) affected by
lower head grade
and lower
tonnage
throughput
On Mine 587 624 620 638 On-mine costs rema
cash cost in low
(US$/
oz) Non-IF
RS
measures
such as
on-mine
cash cost
per
ounce
all-in
sustaining
cost per
ounce
and
average
realised
gold
price
are used
throughout
this
document.
Refer to
Section
10 of
th
e MD&A for
a
discussion
of
non-IFRS
measures
.
All-in 959 881 942 903 All-in sustaining
sustaining cost benefitted
cost from reduced
(US$/ capital
oz)1 investment
Gold Sales 11,5811,2223,5523,43Gold sales in H1
( 8 3 2 3 2014 include
oz) work in progress
from the
preceding
quarter of 1,969
oz
.
Average 1,3731,2711,4881,269The lower
realised realised gold
gold price in
price Q
(US$/ 1 and H1 compared
oz)1 to
the comparable
periods reflects
the
lower gold price.
Gross 8.6 5.6 17.7 11.7 Lower gross
profit profit was
($m) mainly due to
Gross the lower
profit is realised gold
after prices,
deducting ameliorated by
royalties, the sale in
production
costs and H1 2014 of gold
depreciati work in
on but progress
before .
administra
tive
expenses.
Net profit 3.1 1.8 7.6 4.3 Lower net profit
attributab in Q2
le to
sharehold and H1 was
ers primarily due to
($m) lower gold
sales
, lower realised
gold price and
the
higher effective
tax
rate.
Adjusted 9.1 3.7 21.0 7.8 Adjusted basic
basic earnings per
earnings share
per excludes foreign
share exchange profits
Adjusted and
earnings losses.
per share
(EPS)
is a
non-IFRS
measure
which
aims to
reflect
Caledonia
s ordinary
trading
performanc
e. Refer
to
Section
10 of
th
e MD&A for
a
discussion
of
non-IFRS
measures
(cents)
Cash and 22.5 25.8 22.5 25.8 Caledonias cash
cash is held
equivalent
s mainly in
($m) Canadian, UK and
South African
banks.
Cash from 3.4 1.7 4.6 7.9 Strong cash
operating generation in H1
activities due to
sa
($m) le of work in
progress
in January.
Payments 6.7 3.6 12.3 6.6 Blanket continues
to the to make a
community substantial
and contribution to
Zimbabwe the Zimbabwean
government government in
($m) the form of
taxes, royalties
and other fees
and charges.
Payments in
2014 include the
1.5% of the
value of the
gold processed
by Fidelity.
Blanket: low-cost, highly cash generative
Blankets results for the Quarter and the Half Year reinforce its position as a low-cost producer. Blankets on-mine cost fell from US$651 per ounce in the previous quarter to US$624 per ounce. Blankets all-in sustaining cost fell from US$924 per ounce in the previous quarter to US$881 per ounce. Cost reductions were achieved as a result of improved cost controls, greater operating efficiency and reduced sustaining capital expenditure. Despite the lower gold price Blanket continues to generate sufficient cash so that it can continue to invest for future production growth.
Following the implementation of Indigenisation at Blanket in September 2012, Caledonia receives 49% of Blankets dividend distributions, in addition to receiving the repayments of the facilitation loans of US$30 million.
Exploration Highlights
Exploration continued at the Blanket Mine focussed on the potential to extend the Blanket mineralisation below the 750 meter level and at the Mascot and GG satellite properties. A compilation of recent diamond drill intersections is presented in Section 5.1 of the MD&A. Based on this data, additional inferred resources amounting to approximately 500,000 tonnes at 3.9 g/t was added to the Blanket mine mineral resources as disclosed in the 2014 Annual Information Form.
Exploration development and diamond drilling at the GG and Mascot satellite projects have established the existence of multiple mineralized zones with potentially economic gold grades. Further work is being done to define the extent and viability of these mineralized zones and their metallurgical amenability to processing.
Caledonias Dividend Policy
On November 25, 2013 Caledonia announced its revised dividend policy in terms of which it intends to pay a dividend of 6 Canadian cents per share in 2014, split into 4 equal quarterly payments of 1.5 Canadian cents per share. The first quarterly dividend was paid on January 31, 2014 and subsequent quarterly dividends were paid at the end of April and July 2014. It is currently envisaged that the existing dividend policy of 6 cents per annum, paid in equal quarterly instalments will be maintained in 2015. Caledonia will continue to maintain its strong financial position so that it can implement its stated growth strategy and retain the flexibility to take advantage of any suitable opportunities that may arise without the need to raise third party finance.
Caledonias Strategy
Caledonias primary strategy is to continue to invest at Blanket with the objective of increasing production. Caledonia believes that the continuation of this strategy is in the best interests of shareholders as it is expected to increase cash flows and accelerate the repayment of the outstanding facilitation loans. In Q1 2013, Blanket Mine embarked on a strategy to increase gold production over the next 4 years by accelerating the access to resources below 22 Level. The strategy was based on being able to add to existing production sources by accessing new resource blocks in the Blanket section below 22 Level.
Since this plan was initiated, the gold price has fallen from approximately US$1,700 per ounce to the current level of approximately US$1,300 per ounce, and projections for future gold prices have also been significantly reduced. Gold production at Blanket has been lower than anticipated and taxes and regulatory fees in Zimbabwe have increased. Blanket mine remains cash generative however, the combined effect of these factors means that the rate of cash generation at Blanket is lower than anticipated. Accordingly, management at Blanket and Caledonia is currently reviewing the medium term capital investment programme at Blanket. The revised programme is expected to be finalised in Q4 of 2014 and may result in revisions to the rate of increase in Blankets production.
Subject to an ongoing evaluation of the investment climate in Zimbabwe, Blanket and Caledonia will also consider additional acquisition opportunities in Zimbabwe on the basis of, inter alia, their fit with the existing operations and their capacity to enhance value for both Blankets indigenous shareholders and Caledonia.
Caledonia may also consider using its financial and managerial resources which are outside Zimbabwe to consider any suitable opportunities elsewhere in sub-Saharan Africa.
Outlook
Production for 2014 is expected to be approximately 45,000 ounces of gold. Guidance for 2015 and beyond will be provided towards the end of 2014, once the review of Blankets medium term capital investment programme has been completed.
On-mine costs at Blanket are low and better than expected, notwithstanding the lower head grade, primarily due to the improved metallurgical recovery and reduced cyanide consumption as a result of being able to re-introduce oxygen sparging into the CIL circuit.
Blankets strong cash generation and Caledonias robust balance sheet mean that Caledonia and Blanket have the financial capacity to continue to invest with a view to realising Blankets growth potential.
Commenting on these results, Stefan Hayden, Caledonias President and Chief Executive Officer said:
The Quarter and first half year of 2014 presented significant challenges as a result of the continued low grades which adversely affected gold production. New production areas have and are being developed to replace those areas where production has been suspended due to the lower grade. I am confident that the 2014 production target of 45,000 ounces will be achieved.
Management interventions to improve grade control resulted in some improvement in Q2 from the previous quarter, but it is likely that the achieved grade in future quarters will continue to be at or slightly lower than the level that was achieved in Q2.
This year Blanket has sold its gold to Fidelity Printers and Refiners. The new sales arrangements with Fidelity have reduced Blankets working capital requirement due to the earlier payment terms. Blanket has received all payments due from Fidelity in-full and on-time.
It is pleasing that we are now beginning to see the fruits of ongoing exploration activity. Based on recent drilling, a further 500,000 tonnes at 3.9 grammes per tonne has been identified which, as expected, appears to be a continuation of the Blanket Ore bodies and is the area that is being addressed by the No. 6 Winze Project.
The nature of the ore bodies at Blanket and the satellites dictates that exploration is best done from underground drill cubbys rather than surface drilling. It takes a significant amount of time to complete the underground development and cross-cuts out to the required drilling points. This work has been in progress for several quarters and I expect that it will result in further increases in resources.
In light of the lower gold price, slightly lower than anticipated production and the increased taxation burden in Zimbabwe, Blanket and Caledonia are reviewing Blankets medium term investment programme with a view to optimising Blankets future profitability and cash generation. I expect that this process will be completed in the fourth quarter of 2014.
The full Report & Accounts, including the Management Discussion and Analysis for the quarter ended March 31, 2014 are available from the Company's website www.caledoniamining.com and from SEDAR.
Caledonia Mining Corporation
Mark Learmonth
Tel: +27 11 447 2499
marklearmonth(at)caledoniamining.com
Numis
John Prior/Jamie Loughborough/
James Black
Tel: +44 20 7260 1000
BlytheWeigh
Tim Blythe/Halimah Hussain/
Camilla Horsfall
Tel: +44 20 7138 3204
WH Ireland
Adrian Hadden/Nick Field
Tel: +44 20 7220 1751
Caledonia Mining Corporation
Suite 4009 1 King Street West Toronto
Ontario Canada M5H 1A1
Tel: +1(416) 369-9835
Fax: +1(416) 369-0449
www.caledoniamining.com
Condensed Consolidated Statement of Comprehensive Income
(unaudited)
(In thousands of Canadian dollars except per share amounts)
For the 3 For the 6
months ended months ended
June June
30 30
(i)
2013 2014 2013 2014
$ $ $ $
Revenue 17,190 15,555 36,408 32,618
Royalty (1,137)(1,090)(2,486)(2,285)
Production costs (6,602)(7,768)(14,621(16,556
) )
Depreciation (820) (1,025)(1,623)(2,083)
Gross profit 8,631 5,672 17,678 11,694
Administrative expenses (3,377)(1,760)(4,552)(3,607)
Foreign exchange - (129) - 128
(loss)/gain.
Gain on sale of property - 5 - 5
plant and
equipment
Results from operating 5,254 3,788 13,126 8,220
activities
Finance (expense)/income (134) (29) (198) (70)
Profit before income tax 5,120 3,759 12,928 8,150
Income tax expense (1,375)(1,237)(3,653)(2,537)
Profit for the period 3,745 2,522 9,275 5,613
Profit/(loss) on foreign 1,720 (2,288)2,547 (154)
currency translation
Total comprehensive income 5,465 234 11,822 5,459
for the
period
Earnings per share (cents)
Basic 5.8 3.5 14.7 8.2
Diluted 5.8 3.4 14.6 8.0
Adjusted earnings per
share (cents)
(ii)
Basic 9.1 3.7 21.0 7.8
(i) Results for the six months to June 30 2014 incorporate the re-stated earnings for Q1 2014. Corrected financial statement and MD&A for Q1 2014 have been re-filed
(ii) Adjusted earnings per share (EPS) is a non-IFRS measure which aims to reflect Caledonias ordinary trading performance. Refer to Section 10 of the Management Discussion and Analysis for a discussion of non-IFRS measures
Condensed Consolidated Statement of Cash Flows (unaudited)
(In thousands of Canadian dollars)
For the 3 For the 6
months ended months ended
June June
30 30
2014 2013 2014 2013
Cash flows from operating
activities
Cash generated by operating 3,528 5,784 10,396 11,219
activities
Advance payment - (1, 018)- (1,987)
Net Interest paid (29) (13(70) (198)
4
Tax paid (1,841) (1,250) (2,441) (4,413)
Cash from operating activities 1,658 3, 382 7,885 4,621
Cash flows from investing
activities
Property, plant and equipment (1,550) (3, 768)(3,582) (5,108)
additions
Net cash used in investing (1,550) (3, 768)(3,582) (5,108)
activities
Cash flows from financing
activities
Dividend paid (980) (2,616) (1,887) (5,450)
Proceeds from shares issued - 288 - 470
Net cash used in financing (980) (2,328) (1,887) (4,980
activities )
Net increase/(decrease) in (872) (2,714) 2,416 (5,467)
cash and cash
equivalents
Cash and cash equivalents at 26, 714 25,189 23,426 27, 942
beginning
period
Cash and cash equivalents at 25,842 22,475 25,842 22,475
end of
period
Condensed Consolidated statements of Financial Position
(unaudited)
(In thousands of Canadian dollars)
As at June 30December 31,
2014 2013
$ $
Total non-current assets 35,344 33,448
Inventories 6,840 6,866
Prepayments 258 177
Trade and other receivables 3,210 3,889
Cash and cash equivalents 25,852 25,222
Total assets 71,494 69,602
Non-current liabilities 10,525 10,094
Trade and other payables 4,254 4,600
Income taxes payable 1,169 1,138
Bank overdraft - 1,796
Total liabilities 15,948 17,628
Total equity 55,546 51,974
Total equity and liabilities 71,494 69,602
Leseranfragen:
Caledonia ist ein Bergbau-, Explorations- und Entwicklungsunternehmen mit Schwerpunkt auf das südliche Afrika. Nach Umsetzung des Indigenisierungs-Gesetzes in Simbabwe ist Caledonias hauptsächliches Asset ein 49-%-Anteil an einer laufenden Goldmine in Simbabwe („Blanket“).
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Datum: 13.08.2014 - 07:52 Uhr
Sprache: Deutsch
News-ID 335074
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