Caledonia ups revenue by 31%
Gold producer Caledonia Mining has recorded a revenue of $US30 million, 31% revenue increase compared to the $US22.9 million recorded prior year, due to the higher production and higher gold price.
Shantell Chisango
Caledonia Chief executive officer (CEO) Steve Curtis stated that the company performed exceptionally well in all its productions which has paved the way for them to achieve the guidance of between 61,000-67,000 ounces of the year.
“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.”
In addition, the company managed to increase its gross profit for the second quarter by 51% compared to the second quarter of 2020, which the CEO attributed to higher production, lower costs, and higher cold prices.
“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.”
However, the company was unfortunate to record a negative on the net profit due to the impairment of the Glen Hume project which was turned down by board members because it failed to meet the company’s requirements in terms of grade, size, and grade.
“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.”
Moreover, 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.
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, said Curtis.
“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.
The company reported that Covid19 had no negative effects on the production of gold, since the company managed to produce magnificent results by making sure all covid19 restrictions were followed by all stuff.
“Excellent production was achieved without compromising on safety. During the Quarter Blanket passed the milestone of achieving two million fatality-free shifts.
“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.
Furthermore, Caledonia said 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.
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.
Meanwhile, 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.
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.
Caledonia paid a further increased quarterly dividend of 12 cents per share in April this year, and 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.