Caledonia Mining (CMCL) Q4 2020 earnings summary

Executive summary

• Record 2020 production of 57,899 oz; revenue rose 32% to $100.0m, gross profit 50% to $46.7m and adjusted EPS 41% to 204 cents.

• Operations continued through COVID-19 with minimal production impact; the 2021–22 outlook centers on Central Shaft commissioning and higher annual output.

Financial highlights

• 2020 revenue was $100.0m, up 32%; gross profit was $46.7m, up 50%, and adjusted profit attributable to shareholders was $23.8m, up 55%.

• Profit for the period was $25.2m vs. $50.4m in 2019; attributable profit was $20.7m vs. $42.0m, reflecting lower FX gains and other non-recurring effects.

• Operating cash flow was $31.0m vs. $18.1m, while year-end cash and equivalents rose to $19.1m from $9.4m.

• Average gold price rose 27% to $1,749/oz; production increased 5% to 57,899 oz.

Outlook and guidance

• 2021 production target: 61,000–67,000 oz; 2022 target: 80,000 oz, supported by Central Shaft commissioning.

• Shaft commissioning was expected in Q1 2021; the completed shaft provides access below 750m and is intended to support mine life to 2034.

• From 2022, higher production, lower unit costs and reduced capex are expected to lift free cash flow; deep-level exploration aims to extend mine life beyond 2034.

• Dividend policy targets sustainable growth consistent with rising free cash flow; the January 2021 quarterly dividend increased 10% to $0.11/share.