Caledonia Mining (CMCL) Q4 2019 earnings summary

Executive summary

• 2019 revenue rose 11% to $75.8m, while attributable profit reached $42.0m; results included a $29.7m foreign-exchange gain from RTGS currency devaluation.

• Operational challenges in H1—grade dilution, safety and unreliable electricity—were addressed through retraining, mining-method changes and power-supply measures.

Financial highlights

• Revenue was $75.826m, up 11% YoY; EBITDA was $29.935m, up 54%, and operating profit was $60.889m, up 179%.

• Profit after tax was $50.401m, up 260%; attributable profit was $42.018m, up 296%; EPS was 382 cents, up 286%.

• Higher realised gold price of $1,382/oz versus $1,245/oz in 2018 was the main revenue driver; improved grade and recovery added $1.4m, partly offset by $0.6m from lower tonnes.

• Operating cash flow was $18.060m; year-end cash was $9.383m. Working-capital absorption reflected reduced supplier credit and higher stocks and prepayments.

Outlook and guidance

• Target production is 80,000 oz/year from 2022, supported by higher throughput, deeper-level ore and Central Shaft hoisting capacity.

• Central Shaft was expected to commission in 2020 and replace the existing production shaft by 2021; capital spending was expected to decline after project completion in 2020.

• Medium-term goals include AISC of $700–$800/oz and production growth to 80,000–100,000 oz/year over 2–4 years.

• Deeper exploration is intended to extend mine life beyond 2034; longer-term plans include evaluating Zimbabwe growth opportunities and deploying surplus cash flow.