# Caledonia Mining Corporation Over 165,000 tonnes milled in Quarter is new record for Blanket

- Link: https://www.directorstalkinterviews.com/caledonia-mining-corporation-over-165000-tonnes-milled-in-quarter-is-new-record-for-blanket/4121016492
- Published: 2021-08-12T07:39:32+01:00
- Author: Giles

**Caledonia Mining Corporation Plc** ([LON:CMCL](https://www.directorstalkinterviews.com/company/caledonia-mining-corporation/cmcl.l))
announced its operating and financial results for the quarter and the six months
ended June 30, 2021.  Further information on the financial and operating results
for the Quarter and First Half can be found in the management discussion and analysis(“
MD&A”) and the un-audited financial statements which are available on the Company’s
website, and which have been filed on SEDAR.   

**Financial Highlights for the Quarter**

·    Gross revenues of $30.0 million, a 31 per cent increase on the $22.9 million
achieved in the second quarter of 2020 (“Q2 2020”).

·    Gross profit of $13.9 million, a 51 per cent increase on the $9.2 million in
Q2 2020.

·    EBITDA (excluding asset impairments, net foreign exchange gains and losses 
and export incentives) of $14.0 million, a 103 per cent increase on the $6.9 million
in Q2 2020.

·    On-mine cost of $715 per ounce (Q2 2020, $811 per ounce).

·    All-in sustaining cost (“AISC”)^(1) excluding export incentives of $933 per
ounce (Q2 2020, $1,075 per ounce).

·    Basic IFRS earnings per share (“EPS”) of 21.1 cents (Q2 2020, 43.1 cents).

·    Adjusted EPS of 62.6 cents (Q2 2020, 36.8 cents).

·    Net cash from operating activities of $12.7 million (Q2 2020, $4.0 million).

·    Net cash and cash equivalents of $16.7 million (Q2 2020, $11.6 million).

·    Total dividend paid in the Quarter of 12 cents per share in April; a further
dividend at the increased rate of 13 cents per share was paid in July. 

 **Operating Highlights**

·    16,710 ounces of gold produced in the Quarter, 24 per cent higher than the 
13,499 ounces produced in Q2 2020 and a new production record for a second quarter.

·    29,907 ounces produced in the First Half, eight per cent higher than the 27,732
ounces produced in the first half of 2020.

·    Over 165,000 tonnes of ore were mined and milled in the Quarter which is a 
new production record for any quarter and reflects the contribution of the Central
Shaft which was commissioned at the end of March 2021 and the build-up towards the
target of 80,000 ounces per annum from 2022 onwards^(2).

**Outlook**

·    Production in July was 5,995 ounces, which is a further increase in average
monthly production and demonstrates that Blanket is on-track to achieve its production
guidance of 61,000 – 67,000 ounces for 2021.   

·    On-mine cost guidance for 2021 is in the range of $740 to $815 per ounce; guidance
for AISC is $985 to $1,080 per ounce. 

·    Further to the Company’s announcement on 11 December 2020 that it had acquired
an option over the Glen Hume property, Caledonia has decided not to exercise this
option over the Glen Hume property due to disappointing exploration results.  Caledonia
will conduct exploration at Connemara North, the other optioned property in Zimbabwe
as announced on 17 December 2020. Caledonia will consider further investment opportunities
in Zimbabwe and elsewhere.

> **Commenting on the announcement, Steve Curtis, Caledonia Mining Chief Executive
> Officer, said:**
> “Over 165,000 tonnes were milled in the Quarter which is a new record for Blanket
> and reflects the contribution of Central Shaft which is now operational.
> “Higher production, lower costs and a higher gold price resulted in a significant
> increase in the underlying profitability of our business with gross profit increasing
> by 51 per cent compared to the comparable quarter in 2020. Net profit was adversely
> affected by the impairment of the Glen Hume exploration asset following the Board’s
> decision not to proceed further with this project because the property does not
> meet Caledonia’s strategic requirements in terms of size, grade and width. EBITDA,
> excluding foreign exchange gains and losses, export incentives and asset impairments,
> increased over 100 per cent from $6.9 million in Q2 2020 to $14.0 million in the
> Quarter.
> “The increased production meant that cash generated by operations was almost $
> 15.0 million for the Quarter, compared to $2.5 million in the preceding quarter
> and $5.4 million in the comparable quarter.
> “Excellent production was achieved without compromising on safety.  During the
> Quarter Blanket passed the milestone of achieving two million fatality-free shifts.
> _“Production in July was slightly less than 6,000 ounces of gold, which demonstrates
> that Blanket continues to ramp-up production towards the target rate of 6,700 
> ounces per month that is required to achieve the production target of 80,000 ounces
> per annum from 2022_._  _
> “Although COVID-19 had no discernible effect on production in the Quarter, management
> has re-introduced strict access controls to the mine and the mine village to limit
> the rate of transmission of the virus. Blanket is also in the process of vaccinating
> its workforce and their families.
> _“The solar project, which is expected to provide approximately 27 per cent of
> Blanket’s average daily electricity usage is now in the procurement phase and 
> project completion is expected in April 2022_.
> “In April, the Company paid a further increased quarterly dividend of 12 cents
> per share, then in July declared a quarterly dividend of 13 cents per share, paid
> at the end of July.  This was the sixth increased quarterly dividend and an 89
> per cent increase from 6.875 cents paid in October 2019.
> “This has been a strong Quarter and these results have left us well placed to 
> achieve our guidance of between 61,000-67,000 ounces for the year. Our immediate
> strategic focus continues to be to increase production to 80,000 ounces in 2022,
> while undertaking further exploration and development with the objective of extending
> the life of mine beyond 2034 thereby safeguarding and enhancing Blanket’s long-
> term future. Caledonia will also evaluate further investment opportunities in 
> Zimbabwe and elsewhere.”

^(1) _Non-IFRS measures such as “On-mine cost per ounce”, “All-in sustaining cost
per ounce” and “adjusted EPS” are used throughout this document.  Refer to section
10 of the MD&A for a discussion of non-IFRS measures._

^(2) _Refer to the technical report entitled “Caledonia Mining Corporation Plc NI
43-101 Technical Report on the Blanket Gold Mine, Zimbabwe” dated May 17, 2021 prepared
by Minxcon (Pty) Ltd and filed by the Company on SEDAR on May 26, 2021. Mr Dana 
Roets (B Eng (Min.), MBA, Pr.Eng., FSAIMM, AMMSA), Chief Operating Officer, is the
Company’s qualified person as defined by Canada’s National Instrument 43-101 and
has approved any scientific or technical information contained in this news release._

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