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Victoria Falls Stock Exchange listed gold-focused miner Caledonia Mining Corporation Plc’s gross profit decreased by approximately 39.1 per cent during the quarter ended 30 June 2023 compared to the same quarter the previous year due to costs of waste stripping at Bilboes Oxide operation.

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The company’s gross revenue decreased by approximately 0.3 per cent to US$30 million compared to $37.09 million achieved in the second quarter of 2022.

According to Caledonia, the group’s profit was affected by costs of waste stripping at Bilboes oxide operation, the gross profit for the company was $10.9 million during the quarter, a 39 per cent decrease from $17.9 million achieved during the comparable quarter of 2022 with Blanket Mine contributing $13.1 million.

“Gross revenues of $37.0 million compared to $37.09 million achieved in the second quarter of 2022 (“Q2 2022”).

“Gross profit of $10.9 million (Q2 2022: $17.9 million). Whilst Blanket Mine (“Blanket”) contributed $13.1 million, the group’s gross profit was affected by the costs of waste-stripping at the Bilboes oxide operation, notwithstanding a small revenue contribution of $2.2 million in the Quarter. Bilboes will be returned to care and maintenance with effect from October 1, 2023, and, pending the completion of the feasibility study for the sulphide project, the remaining oxides will be mined as part of the larger project.

“EBITDA (excluding asset impairments, depreciation and net foreign exchange gains and losses) of $10.5 million in the Quarter and $11.2 million in the First Half (Q2 2022: $17.8 million; first half of 2022: $31.4 million).

“On-mine cost per ounce[1] for the Quarter of $1,084 included the costs of the Bilboes oxide operation. At Blanket the on-mine cost per ounce was $915 (Q2 2022: $692). This increase was in large part due to the disappointing production performance in the Quarter; the production challenges now appear to have been addressed and July 2023 showed a material improvement in production and costs.

” All-in sustaining cost (“AISC”) of $1,357 per ounce (Q2 2022: $984 per ounce). The AISC per ounce in the Quarter increased due to the factors referenced above which led to the higher on-mine cost per ounce.

“The Company suffered a foreign exchange loss in the Quarter of $3.6 million (Q2 2022: $4.2 million gain) due to the significant devaluation of the RTGS Dollar to USD in June 2023. This affected operating profit and, accordingly, basic IFRS earnings per share (“EPS”) showed a 0.6 cent loss (Q2 2022: 87.7 cent profit). IFRS EPS reflects the movement in IFRS profit attributable to shareholders and the effect of new shares issued. Adjusted EPS of 10.0 cents (Q2 2022: 56.2 cents) is adjusted for realized and unrealized foreign exchange losses, impairments and fair value adjustments,” The Company said.

According to Caledonia, the Company conducted equity raises by way of placings in the previous quarter and this Quarter that targeted institutional investors in the UK, Europe, South Africa and Zimbabwe. The placings raised $16.6 million before expenses and it was encouraging to see demand from new and existing institutional investors whose support will help Caledonia achieve its growth plans in Zimbabwe.

“A dividend of 14 cents per share was paid in April 2023; a further dividend of 14 cents per share was paid in July 2023.

“Group net cash outflows from operating activities of $2.2 million in the Quarter (Q2 2022: $16.7 million inflow) included waste-stripping activities at Bilboes and the payment of legacy creditors at Bilboes. The waste-stripping activities will facilitate access to the sulphide mineralization when the sulphide project is in operation.

“Net cash and cash equivalents at the Quarter end were negative $2.9 million (Q2 2022: positive $10.9 million). However, the improved operating performance after the end of the Quarter led to cash inflow from operations before working capital changes (i.e. revenues less on-mine costs) of $7.7 million in July,” The Company said in part.

According to Caledonia CEO Mr Mark Learmonth after an encouraging start to the Quarter, continued operational challenges at Blanket meant that production was below expectations in May and the first half of June. These challenges have however been addressed and production improved substantially in the second half of June and in July. 7,829 ounces of gold were produced at Blanket in July at an on-mine cost of $715 per ounce: Caledonia, therefore, maintains its production guidance for 2023 of between 75,000 and 80,000 ounces and its on-mine cost guidance of between $770 and $850 per ounce.

“Mining is never without its difficulties, and the first half of this year has certainly not been without its challenges. However, Blanket is now running better than expected and I look forward to achieving production guidance of between 75,000 and 80,000 ounces of gold for 2023.

“Due to the lack of confidence that the Bilboes oxide mine can operate profitably, it will return to care and maintenance with effect from October 1, 2023. In due course, the remaining oxide material will be mined and processed alongside the sulphide ore. This outcome has no bearing on the viability of the much larger sulphide project which was the reason for acquiring Bilboes. The results of the feasibility study on the project will be published before year end after which we will be able to establish the best development approach.

“In May, Caledonia announced the retirement of Leigh Wilson as Director and Non-Executive Chairman of the Company, a role that he had held for 10 years. I thank Leigh for his strong leadership; his strength, skills and experience have proved invaluable over this period. He is succeeded by John Kelly, who is a long-standing Non-Executive Director,” Learmonth said.

Victoria Falls Stock Exchange listed gold-focused miner, Caledonia Mining Corporation Plc will from the 1st of October 2023 place Bilboes oxide operation under care and maintenance due to losses incurred by the costs of waste-stripping at the operations.

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In January, Caledonia added the Bilboes gold project to its Portfolio after concluding the acquisition of Bilboes Gold Limited, which owns the gold asset through its Zimbabwe subsidiary Bilboes Holdings. However, due to a lack of confidence that the project can operate profitably, it will be placed under care and maintenance.

The Bilboes oxide was intended as a small-scale, low-margin, short-term project which was primarily justified by the benefits of pre-stripping in anticipation of the development of a larger sulphide project.

Caledonia group’s gross profit was affected by the costs of waste-stripping at the Bilboes oxide operation, notwithstanding a small revenue contribution of $2.2 million in the quarter ended June 30 2023.

According to Caledonia CEO Mark Learmonth, Bilboes will be returned to care and maintenance with effect from October 1, 2023, and, pending the completion of the feasibility study for the sulphide project, the remaining oxides will be mined as part of the larger project.

“Due to the lack of confidence that the Bilboes oxide mine can operate profitably, it will return to care and maintenance with effect from October 1, 2023. In due course, the remaining oxide material will be mined and processed alongside the sulphide ore. This outcome has no bearing on the viability of the much larger sulphide project which was the reason for acquiring Bilboes. The results of the feasibility study on the project will be published before year-end after which we will be able to establish the best development approach,” Learmonth said.

As the world shifts towards a greener and more sustainable future, the demand for copper is expected to skyrocket. Copper, a crucial component in renewable energy systems and electric vehicles, has become increasingly sought after in recent years. The global transition to clean energy production and transportation has highlighted the importance of this versatile metal, making investing in copper exploration critical. This gives Zimbabwe a wide-open chance to explore its copper potential to benefit from the transition.

The resuscitation of Zimbabwe’s biggest Copper Mine, Mhangura Mine, and further exploration for new copper resources will have a positive effect towards Zimbabwe becoming relevant in the green energy transition since the country is already one of the biggest suppliers of lithium which is one of the most sought after minerals for Electric Vehicles (EVs).

With countries around the globe committing to reducing greenhouse gas emissions and achieving net-zero targets, the demand for copper is only expected to skyrocket. Renewable energy sources, such as wind and solar power, require significant amounts of copper for efficient transmission and storage of electricity. Similarly, the rapid growth of electric vehicles necessitates copper in their batteries, motors, and charging infrastructure.

According to the International Copper Association, the demand for copper is projected to increase by 31% by 2030. This surge in demand will undoubtedly place immense pressure on global copper supplies. To meet this rising demand, increased investment in copper exploration is imperative. This opens up opportunities for Zimbabwe which has verified Copper deposits in Makonde, Kadoma, Mutare, Chirumanzu, Chegutu, Kwekwe, Shurugwi, Beitbridge, Gokwe, Bindura, Chipinge, Bikita, Insiza, Makonde, Harare, Bulawayo, Shamva, Chiredzi, Nkayi, Mudzi, Chegutu, Bindura, Kwekwe, Hurungwe, Bubi, Makonde, Bikita, Gwanda and Masvingo.

Investing in copper exploration not only addresses the upcoming surge in demand but also has the potential to spur much-needed economic growth. Exploration activities create job opportunities and stimulate local economies, particularly in regions rich in copper deposits. Furthermore, as the market value of copper continues to rise, investing in this sector can yield significant returns for investors.

However, the journey from exploration to production in the copper mining industry can be lengthy and complex. It involves conducting detailed geological studies, obtaining necessary permits and approvals, and investing in infrastructure and technology. To facilitate these processes, the Zimbabwean government and industry stakeholders must work together to ensure an efficient, conducive regulatory environment and provide necessary support in terms of infrastructure development and technological advancements.

Additionally, fostering innovation in the copper mining sector is crucial. Advancements in mining technologies and practices can improve efficiency, reduce environmental impact, and minimize extraction costs. This is essential not only for the viability of copper exploration ventures but also for the sustainability of the industry as a whole.

By investing wisely and harnessing the potential of this versatile metal, we can pave the way for a greener and more sustainable future reaping benefits in the process.

Australia Stock Exchange-listed Oil and gas exploration company Invictus Energy Limited, last week completed the acquisition of its CB23 2D seismic survey at the Cabora Bassa project, Northern Zimbabwe.

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Invictus Managing Director Scott MacMillan said the completed survey in EPO 1848 and EPO 1849 in the Cabora Bassa basin in Northern will provide additional coverage of several leads in the east of the basin that were identified on CB21 and legacy Mobil database.

Despite Mobil Oil conducting some geological work prospecting for oil and gas in the country, the company did not proceed further to drill wells to confirm commercial deposits of Oil and Gas.

He said, the survey, which was completed on time and on budget, was acquired on Invictus’ behalf by Polaris Natural Resource Development Ltd (“Polaris”) and is complementary to Invictus’ existing CB21 survey (also acquired by Polaris).

According to MacMillan, a total of 425km of high-quality 2D seismic data were acquired which will provide enhanced coverage of prospects and leads identified in the eastern areas of Invictus’ Cabora Bassa basin acreage.

“The new data will provide additional coverage of several exciting leads in the east of the basin that were identified on our CB21 and legacy Mobil datasets.

“Initial field processing of the seismic data demonstrates structural closure at multiple target intervals across a number of leads in the Central Fairway and Basin Margin play.

“Following the full processing and interpretation of the new data we are aiming to mature those leads and add to our material prospect portfolio as candidates for future exploration drilling.

“We are extremely pleased with the performance of Polaris and the local field crew who have delivered a high-quality project on time and on budget with excellent health and safety performance and no lost time incidents.

“The successful completion of our second survey in the basin marks a significant milestone for Invictusand we are proud of how we have engaged and involved the local communities and stakeholders which provided over 100 jobs in the delivery of the program.

“With our preparations for the drilling of Mukuyu-2 this quarter well underway these are exciting times for the company,” McMillan said.

The program’s HSE performance has been excellent with >77,000 hours of field activities completed with no lost time incidents.

Through the seismic project over 100 people from local communities were employed in various roles to support operations.

The survey was carried out with the support of local stakeholders and interest in the activities was high.

Throughout the project, a team of dedicated community liaison officers(CLOs)completed extensive local stakeholder engagements. The CLOs arranged over 100 meetings with a total of 2,600 people consulted, and a further 38 schools with nearly 5,000 pupils engaged to ensure up-to-date community awareness of the activities and all cultural obligations observed during the program to minimise the impact on the local community.

Field operations will complete over the coming week with the demobilisation of personnel and equipment.