Caledonia ramps up gold production

GROSS revenues at Victoria Falls Stock Exchange-listed Caledonia Mining Corporation grew by 17,4% to US$142 million last year compared to the same period in 2021, on the strength of increased gold output.

The business generated gross sales of US$121 million in 2021.

The mining company's operating and financial results for the year ending December 31, 2022 showed that gross profit was US$61,8 million, up 14% from the prior year, and that earnings before interest, taxes, depreciation and amortisation (EBITDA) was US$50,4 million.

Gold production in the period under review grew by 20% to 80 775 ounces (oz), which is a result of a record annual production from its Blanket Mine.

"Operationally, the last 12 months have marked a turning point for the business, and I am delighted that we hit our long-term target of just over 80 000 oz," Caledonia chief executive officer Mark Learmonth, said.
Caledonia chief executive officer Mark Learmonth

"The last couple of years have seen a tremendous amount of change in the company as we pivot the direction of the business towards becoming a multi-asset gold producer in Zimbabwe. We have always seen huge geological potential in the country and are very excited about the portfolio of attractive new assets that we have acquired."

The company, which is also listed in New York and London, acquired Motapa in November; this asset is seen as having great potential and being crucial to the company's strategic goals.

Following the fulfilment of requisite conditions, Caledonia completed the acquisition of the Bilboes Gold Project in January 2023. According to a feasibility assessment performed by the vendors, an open-pit gold mine could have a 10-year life and produce an average of 168 000oz of gold annually.

"Caledonia has commissioned its own feasibility study to identify the most judicious way to commercialise the project to optimise shareholder returns. One approach that will be considered is a phased development which would minimise the initial capital investment and reduce the need for third party funding," Learmonth said.

According to the CEO, the company has also resumed oxide production at Bilboes, generating immediate cash flow and forecasting between 12 500 and 17 000oz for 2023.

 The Caledonia chief said in November 2022, the company's 12,2 megawatt solar plant was connected to the Blanket grid and the mine has since been receiving 27% of its energy from solar.

He said the solar power would displace power from the grid and from the diesel generators and is expected to reduce Caledonia's consolidated cost per ounce of gold produced by approximately US$37.

"This completion happily coincides with an improvement in the supply of power from the Zimbabwe grid which has substantially reduced the amount of diesel consumed.

"We are confident that we will continue to see an ongoing meaningful reduction to our diesel usage month-on-month, fully justifying our investment in solar power and delivering on our Environmental Social Governance strategy," he said.

Learmonth said the quarterly dividend continued to be an important part of the company's strategy and during the year, they paid a quarterly dividend of US$0,14 cents a share, providing a healthy yield to their shareholders.

"We believe the dividend coupled with our growth strategy makes us an attractive investment and sets us apart from our industry peers," he said.