CMCL.VX | Caledonia Mining Corporation FY23 Earnings Update; Firmer prices buttress the topline

    The year ended 31 December 2023 saw gold production at Blanket Mine register a 7.1% decrease y/y to 75,416 ounces. Tonnes milled saw a 2.4% increase to 770,440tn, however, this was offset by a lower average grade and gold recovery rate. The fourth quarter of 2022 saw the commencement of work at Caledonia’s second asset, Bilboes, with operations centred on mining and processing oxides. The oxides project yielded 3,050oz of gold at an average grade of 1.13g/t in the period under review.  However, operations were hindered by an unforeseen need of extensive waste stripping in the relevant areas and inaccurate mineralisation maps resulting in the project not meeting its expected output of between 12,500/oz and 17,000/oz. As a result, Caledonia’s aggregate gold production for FY23 registered at 78,466/oz, down 2.94% from the 80,775/oz in FY22. Caledonia saw a revenue of US$146mn, up 3% y/y with US$5.70mn attributable to the Bilboes Oxides project. International gold prices firmed up within the year resulting in an average realised price of US$1,910/oz versus the US$1,772/oz registered in the same period last year. Production costs however outpaced growth of the topline, increasing 31% y/y to US$82.71mn. Blanket Mine production costs grew 10.5% on account of electricity costs escalating 40% to US$13.50mn. Whilst the solar plant at Blanket Mine saw savings of US$38/oz, the benefit of reduced use of diesel generators was outweighed by higher electricity consumption and maximum demand use charges. The Bilboes operation incurred production costs of US$13.12mn before being put under care and maintenance in September 2023. As a result, on-mine costs at the group level increased 22% to US$1,047/oz whilst All-in-Sustaining-Costs (AISC) surged 80% y/y from US$878/oz to US$1,445/oz on higher on-mine costs and a higher allocation to capital expenditure. EBITDA margin decreased from 40.1% in FY22 to 24.63% in FY23 with the group subsequently posting a loss of US$0.62mn for the year. Caledonia utilised US$28.56mn in the year towards capex needs and closed the year on a net cash position of -US$11.03mn. Caledonia paid out a cumulative dividend of USc56 representing a dividend yield of 3.50% at current levels.


    Download (634.95 KB)