Caledonia Mining Corporation Plc: Results for the Second Quarter and First Half of 2017
(firmenpresse) -
Caledonia Mining Corporation Plc: Results for the Second Quarter and First Half of 2017
(NYSE: CMCL, AIM: CMCL, TSX: CAL)
St Helier, 14 August 2017 - Caledonia Mining Corporation Plc (Caledonia or the Company - http://www.commodity-tv.net/c/search_adv/?v=297483) announces its operating and financial results for the second quarter of 2017 (Q2 or the Quarter).
Gold production in the Quarter was little changed when compared to Q2 2016; adjusted earnings for the first half of 2017 were 45.7 cents, six per cent. higher than in the first half of 2016.
Q2 Q2 H1 H1 201Comment
2016 2017 2016 7
Gold produced 12,51012,52123,33225,315Gold production in the Qua
( rter was affected by
oz)
underground logistical
constraints on materials
handling
On-mine cost 629 696 658 677 On-mine costs per ounce
per ounce were
($/
oz) Non-IFRS adversely affected by
measures lower grade
such as On-mi
ne
cost per
ounce,
A
ISC and
average
realised gold
price are
used
throughout
this
announcement.
All-in 930 855 937 856 All-in sustaining costs
Sustaining remain under control and
Cost within guidance year to
($/ date
oz) (AISC)
Average 1,252 1,235 1,211 1,224 Gold prices for the
realised Quarter were stable and
gold price reflect the market gold
($/ prices
oz)
Gross profit G5,936 5,035 9,824 10,861Gross profit in the
ross profit Quarter was adversely
is after affected
deducting
royalties, by higher production costs
production
costs and
depreciation
but before
administrativ
e
expenses
, other
income,
interest and
finance
charges and
taxation.
Net profit 3,607 694 4,150 3,032 The Quarter was adversely
attributable affected
to by share-based payments
shareholders and a higher effective
tax rate;
Q2 2016 benefited from
$2.4
million proceeds from sal
e of treasury bills
Adjusted 30.5 18.9 43.0 45.7 Earnings declined 38 per
basic cent
earnings per . for the Quarter; six mon
share th earnings are
(EPS)
Adjusted EPS 6 per cent. higher than
is a H1
non-IFRS 2016
measure
which aims
to reflect
Caledonias
ordinary
trading
performance.
Per share
data has
been
adjusted to
reflect the
effective
1-for-5
consolidation
which took
place on
June 26,
2017.
(cents)
Net cash and 10,58110,87810,58110,878Cash balances remain
cash adequate and stable
equivalents during the
Quarter
Cash from 7,215 4,701 8,964 6,480 Robust cash generation to
operating support
activities
continued investment
Commenting on the results, Steve Curtis, Chief Executive Officer, said:
Production and financial performance at the Blanket Mine (Blanket) was adversely affected in the Quarter by lower grades and some logistical difficulties in underground material handling. Adjusted EPS of 18.9 cents is 38 per cent. lower than in the corresponding period in 2016; adjusted earnings for the first half of the year were 45.7 cents - six per cent. higher than in the first half of 2016. Notwithstanding the challenges during the Quarter, Caledonia continues to deliver earnings in-line with the previous period and we anticipate being in a position to grow from this base as our investment to increase production bears fruit.
Management have implemented several remedial measures in the Quarter to improve our underground material handling capacity and to address the logistical constraints. The benefit of these actions was evident in July when we saw an improvement in ore tonnages, grade and gold recoveries. I expect that further benefits will be realised in the second half of 2017. We remain confident of achieving our 2017 full year guidance of between 52,000 and 57,000 ounces.
It is important for investors to note that we expect the underground bottlenecks to be fully alleviated with the completion of the new Central Shaft, which is expected to be in production in the fourth quarter of 2018.
Sadly, our safety performance suffered a serious setback with Blanket experiencing two fatal accidents in recent months. I join with my colleagues and fellow directors in expressing our sincere condolences to the families and colleagues of the deceased and assure all our stakeholders at Blanket of our continued and unwavering commitment to safe and sustainable operations.
We experienced a marginally weaker average realised gold price for the Quarter of $1,235.Lower than expected grades contributed to a 10.6 per cent. increase in on-mine costs from $629 per ounce to $696 per ounce.
All-in sustaining costs remain under control at $855 per ounce for the Quarter, a decrease of eight per cent. on the corresponding period in 2016. We remain confident of achieving our full year AISC guidance of between $810 and $850 per ounce.
Operating cash flow in the Quarter of $4.7 million contributed to a strong balance sheet and supports the funding of the Central Shaft project. The Companys gross cash position at the end of the Quarter was $10.9 million, approximately flat on the previous quarter and year. To keep cash balances flat during a quarter in which we invested $4.2 million and paid a quarterly dividend of $0.7 million is testament to the strong cash generation of the mine.
The Central Shaft project continues to progress well with pleasing progress in shaft sinking during the Quarter. The shaft is currently at a depth of 870m below surface. The Central Shaft is expected to enable the mine to produce 80,000 ounces by 2021. We are now in the third year of the project and are excited by the significant potential that the Central Shaft has to improve the efficiency, and extend the life of operations at Blanket. Once complete, it is expected to enhance the operating efficiency through reduced travel times for employees to get to mining areas, shorter tramming distances and reduced time required to hoist ore to surface. The Central Shaft will also allow us to increase the pace of deep level exploration and development, securing the future of the mine for many years to come.
We are also pleased to have executed a successful one-for-five share consolidation during the Quarter which was undertaken in support of the migration of the companys trading from the OTCQX to a listing on the NYSE American. Caledonia hopes that the NYSE American listing will facilitate access to an enlarged pool of potential investors in the United States which it is anticipated will lead to increased liquidity in the Companys shares. We look forward to engaging actively with existing and potential new shareholders in the US market.
Strategy and Outlook
Caledonia remains on track to achieve the production target of 80,000 ounces by 2021 at its Zimbabwean subsidiary, Blanket Mine. The Companys strategic focus continues to be the implementation of the Investment Plan at Blanket, which was announced in November 2014 and is expected to extend the life of mine by providing access to deeper levels for production and further exploration. Implementation of the Investment Plan remains on target in terms of timing and cost. Caledonias board and management believe the successful implementation of the fully funded Investment Plan is in the best interests of all stakeholders because it is expected to result in increased production, reduced operating costs and greater flexibility to undertake further exploration and development, thereby safeguarding and enhancing Blankets long term future. Caledonia continues to evaluate further investment opportunities.
Dividend Policy
In July, 2016 Caledonia announced an increase in its quarterly dividend to 1.375 cents per pre consolidation share, or 5.5 cents per annum, an increase of 22 per cent. Following the Companys one-for-five share consolidation in June 2017 the dividend was increased by an amount commensurate to the consolidation (i.e. fivefold) to 27.5 cents per share post consolidation. The dividend of 27.5 cents per annum, payable quarterly at a rate of 6.875 cents, represents Caledonias current dividend policy. It is envisaged that the dividend of 27.5 cents per annum will be maintained.
Following the implementation of indigenisation in September 2012, Caledonia owns 49 per cent. of the Blanket Mine in Zimbabwe. Caledonia continues to consolidate Blanket and the operational and financial information set out below is on a 100 per cent. basis unless otherwise indicated.
For further information please contact:
Shareholder Conference Call
A presentation of the results for the Quarter and the outlook for Caledonia is available on Caledonias website (www.caledoniamining.com). Management will host a conference call at 1500 UK Time on the 15th August 2017.
Details for the call are as follows:
Date: 15 August 2017
Time: 1500 London, 1600 Johannesburg, 1600 Zurich and Frankfurt, 1000 Toronto and New York
Password: Caledonia
UK Toll free 0808 109 0700
USA Toll free 1 866 966 5335
South Africa Toll free 0 800 980 512
Canada Toll free 1 800 608 0547
Other (standard International +44 (0) 20 3003 2666
access)
Caledonia Mining Corporation Plc
Mark Learmonth
Tel: +44 1534 679 802
Maurice Mason-
Tel: +44 759 078 1139
WH Ireland
Adrian Hadden/Ed Allsopp-
Tel: +44 20 7220 1751
Blytheweigh
Tim Blythe/Camilla Horsfall/Megan Ray
Tel: +44 207 138 3204
Swiss Resource Capital AG
Jochen Staiger -
info(at)resource.capital.ch
www.resource-capital.ch
Note: This announcement includes inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.
Cautionary Note Concerning Forward-Looking Information
Information and statements contained in this news release that are not historical facts are forward-looking information within the meaning of applicable securities legislation that involve risks and uncertainties relating, but not limited to Caledonias current expectations, intentions, plans, and beliefs. Forward-looking information can often be identified by forward-looking words such as anticipate, envisage, believe, expect, goal, plan, target, intend, estimate, could, should, may and will or the negative of these terms or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Examples of forward-looking information in this news release include: production guidance, estimates of future/targeted production rates, and our plans and timing regarding further exploration and drilling and development. This forward-looking information is based, in part, on assumptions and factors that may change or prove to be incorrect, thus causing actual results, performance or achievements to be materially different from those expressed or implied by forward-looking information. Such factors and assumptions include, but are not limited to: failure to establish estimated resources and reserves, the grade and recovery of ore which is mined varying from estimates, success of future exploration and drilling programs, reliability of drilling, sampling and assay data, assumptions regarding the representativeness of mineralization being inaccurate, success of planned metallurgical test-work, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors.
Potential shareholders and prospective investors should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. Such factors include, but are not limited to: risks relating to estimates of mineral reserves and mineral resources proving to be inaccurate, fluctuations in gold price, risks and hazards associated with the business of mineral exploration, development and mining, risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom the Company does business; inadequate insurance, or inability to obtain insurance, to cover these risks and hazards, employee relations; relationships with and claims by local communities and indigenous populations; political risk; availability and increasing costs associated with mining inputs and labour; the speculative nature of mineral exploration and development, including the risks of obtaining or maintaining necessary licenses and permits, diminishing quantities or grades of mineral reserves as mining occurs; global financial condition, the actual results of current exploration activities, changes to conclusions of economic evaluations, and changes in project parameters to deal with unanticipated economic or other factors, risks of increased capital and operating costs, environmental, safety or regulatory risks, expropriation, the Companys title to properties including ownership thereof, increased competition in the mining industry for properties, equipment, qualified personnel and their costs, risks relating to the uncertainty of timing of events including targeted production rate increase and currency fluctuations. Shareholders are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Caledonia undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.
Condensed Unaudited Consolidated Statement of Profit or Loss and
Other Comprehensive
Income
($000s)
3 months ended 6 months ended
June June
30 30
2016 2017 2016 2017
Revenue 15,681 15,484 29,104 31,933
Royalty (785) (776) (1,457)(1,599)
Production costs (8,081)(8,814)(16,123(17,912
) )
Depreciation (879) (859) (1,700)(1,741)
Gross profit 5,936 5,035 9,824 10,861
Other income 17 557 74 1,201
Administrative expenses (1,799)(1,493)(3,236)(2,934)
Foreign exchange gain/(loss) (228) 83 (200) 19
Cash settled share based payment (159) (959) (250) (1,369)
Sale of Blanket Mine treasury 3,203 - 3,203 -
bills
Margin call on gold hedge - - (435) -
Operating profit 6,970 3,223 8,980 7,598
Net finance cost (53) (10) (89) (17)
Profit before tax 6,917 3,213 8,891 7,581
Tax expense (2,381)(2,090)(3,507)(3,550)
Profit for the period 4,536 1,123 5,384 4,031
Other comprehensive income/(loss)
Items that are or may be
reclassified to profit or
loss
Foreign currency translation (131) 60 (27) 133
differences for foreign
operations
Total comprehensive income for 4,405 1,183 5,357 4,164
the
period
Profit attributable to:
Shareholders of the Company 3,607 694 4,150 3,032
Non-controlling interests 929 429 1,234 999
Profit for the period 4,536 1,123 5,384 4,031
Total comprehensive income
attributable
to:
Shareholders of the Company 3,476 754 4,123 3,165
Non-controlling interests 929 429 1,234 999
Total comprehensive income for 4,405 1,183 5,357 4,164
the
period
Earnings per share (cents)
Basic 33.5 6.1 38.3 27.6
Diluted 33.3 6.1 38.1 27.5
Adjusted earnings per share
(cents)
(i)
Basic 30.5 18.9 43 45.7
Condensed Consolidated Statement of Cash Flows (unaudited)
($000s)
3 months ended 6 months ended
June June
30 30
2016 2017 2016 2017
Cash flows from operating
activities
Cash generated from operations 7,902 5,459 9,835 7,874
Net interest paid (54) (4) (90) (5)
Tax paid (633) (754) (781) (1,389)
Net cash from operating activities 7,215 4,701 8,964 6,480
Cash flows from investing
activities
Acquisition of Property, plant and (4,926)(4,223)(8,230)(7,519)
equipment
Proceeds from property, plant and 3 - 59 -
equipment
Net cash used in investing (4,923)(4,223)(8,171)(7,519)
activities
Cash flows from financing
activities
Dividends paid (599) (727) (1,197)(1,452)
Repayment of term loan facility - (375) - (750)
Share repurchase - (146) - (146)
Share issued 47 - 105 -
Net cash used in financing (552) (1,248)(1,092)(2,348)
activities
Net decrease in cash and cash 1,740 (770) (299) (3,387)
equivalents
Effect of exchange rate - (74) - (70)
fluctuations on cash
held
Cash and cash equivalents at 8,841 11,722 10,880 14,335
beginning of the
period
Cash and cash equivalents at end 10,581 10,878 10,581 10,878
of the period
Consolidated Statements of Financial Position
(unaudited)
($000s) As at Dec 31 June 30
2016 2017
Total non-current assets 64,917 71,021
Inventories 7,222 8,064
Prepayments 810 3,611
Trade and other receivables 3,425 4,720
Cash and cash equivalents 14,335 10,878
Total assets 90,709 98,294
Total non-current liabilities 21,560 22,587
Current portion of term loan facility 1,410 1,545
Trade and other payables 8,077 10,141
Income taxes payable 345 1,303
Total liabilities 31,392 35,576
Equity attributable to shareholders 55,609 57,881
Non-controlling interests 3,708 4,837
Total equity and liabilities 90,709 98,294
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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