Revenue up but earnings per share slip for Caledonia Mining

Caledonia Mining reported gross revenue of $142m for 2022 in its full-year results on Friday, up from the $121m it recorded in 2021.

The AIM-traded company said its gross profit climbed to $61.8m from $54.1m year-on-year, and EBITDA improved to $50.4m, from $46.4m.

Its on-mine cost per ounce was reported at $735, which was slightly lower than the $742 in 2021, while its all-in sustaining cost (AISC) per ounce was $878, up from $856.

The firm’s adjusted earnings per share for the year totalled 219.9 US cents, a slight decrease from the 225.9 cents reported for 2021.

Caledonia Mining said net cash from operating activities totalled $42.6m for the year, up from $30.9m 12 months earlier.

However, its net cash and cash equivalents decreased significantly to $1.5m at year-end on 31 December, from $16.3 million year-on-year.

The board paid a dividend of 56 cents per share for the year, up from its 50 cent-per-share distribution for 2021.

“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 ounces,” said chief executive officer Mark Learmonth.

“The last couple of years has 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.”

Learmonth noted that in November, Caledonia purchased Motapa - an asset it considered highly prospective and strategically important in its growth ambitions as a large exploration property contiguous to the Bilboes gold project.

“In January 2023, following the satisfaction of conditions precedent, we closed the acquisition of the Bilboes Gold Project.

“A feasibility study prepared by the vendors indicates the potential for an open-pit gold mine producing an average of 168,000 ounces per year over a 10-year life of mine.

“Caledonia has commissioned its own feasibility study to identify the most judicious way to commercialise the project to optimise shareholder returns.”

One approach to be considered, Mark Learmonth explained, would be a phased development in a bid to minimise initial capital investment and reduce the need for third-party funding.

“The company has also restarted the oxide operations at Bilboes, providing immediate cash flow, and has given guidance of between 12,500 and 17,000 ounces for 2023.

“In November, the company's 12.2MW AC solar plant was connected to the Blanket grid, and the mine has since been receiving 27% of its energy from solar.

“The solar power will 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 $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.”

Caledonia’s board was “confident” that the firm would continue to see an ongoing meaningful reduction to its diesel usage month-on-month, Learmonth added, justifying its investment in solar power and delivering on its environmental, social and governance strategy.

“The quarterly dividend continues to be an important part of the company's strategy, and during the year we paid a quarterly dividend of 14 cents per share, providing a healthy yield to our shareholders.

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

At 1533 GMT, shares in Caledonia Mining Corporation were down 11.36% at 1,139p.

Reporting by Josh White for Sharecast.com.