Caledonia lifts revenue by 29%
GROSS revenue at Victoria Falls Stock Exchange-listed Caledonia Mining Corporation increased by 29% to US$72,1 million during the first half of this year on the back of high gold production and firming prices.
In the same period last year, the firm’s gross revenue stood at US$55,7 million.
Caledonia, which is also listed on the New York Stock Exchange and London Stock Exchange, operates Gwanda-based gold producer Blanket Mine.
A total of 38 605 ounces of gold were produced in the six months ended June 30, 2022, up 29% compared to the prior period, the firm said yesterday.
“This has been a terrific quarter and, indeed, half year with second quarter production of just over 20 000 ounces which set a record for any quarter. The first half of 2022 exceeded our expectations and we have now achieved our quarterly production target,” Caledonia chief executive officer Mark Learmonth said in a Press release.
“Excellent production, along with a higher gold price and good cost control, has contributed to a 321% increase in IFRS earnings per share and a 31% increase in net cash from operating activities over the comparable quarter in 2021.”
Profit in the period under review stood at US$20,8 million, up 121% compared to the same period last year while production costs increased by 14% to US$28,9 million.
Last month, Caledonia announced that it had signed an agreement to purchase Bilboes Gold Limited, the holding company for a large, high-grade, open-pittable gold resource, for about US$53,3 million.
“We have followed the progress of the project for several years and believe that Bilboes is the premier gold development project in Zimbabwe, and, indeed, one of the best gold development projects in Africa,” he said.
“The completion of the transaction is subject to several conditions, but once achieved we can prepare a feasibility study to identify the most judicious way to commercialise the project with regard to the availability of funding on acceptable terms.
“Caledonia also intends to restart the oxides operation at Bilboes under a tribute arrangement before completion of the transaction with a view to creating a cash-generative operation within approximately six months.”
Learmonth said the firm’s immediate strategic focus continued to be on Blanket and they were on track to meet target production of between 73 000 and 80 000 ounces of gold for this year, with first half production of 38 605 ounces of gold.
“We will also continue to reduce our operating costs and increase the flexibility to undertake further development and exploration, thereby safeguarding and enhancing Blanket’s long-term future,” he said.
The Caledonia chief said the proposed acquisition of Bilboes also built on the recent acquisition of the Maligreen claims, where the company continued to evaluate the existing geological information and was focused on increasing the confidence of the resource base.
He said the mining company would also consider other investment opportunities in the Zimbabwean gold sector within the constraints of its financing and management capacity.
Learmonth said 2022 had been an outstanding year so far.-newsday
