Welcome!

News Feed Item

Caledonia Mining Corporation: Q1 2014 Results

TORONTO, ONTARIO -- (Marketwired) -- 05/14/14 -- Caledonia Mining Corporation (TSX: CAL)(OTCQX: CALVF)(AIM: CMCL) ("Caledonia" or the "Company") announces its operating and financial results for the first quarter of 2014 ("Q1" or the "Quarter"). All results are reported in Canadian dollars unless otherwise indicated. Following the implementation of indigenisation in September 2012, Caledonia owns 49% of the Blanket Mine in Zimbabwe. Caledonia continues to consolidate Blanket and the operational and financial information set out below is on a 100% basis unless indicated otherwise.

Operating and Financial Review

----------------------------------------------------------------------------
                       Q1 2013 Q1 2014 Comment
----------------------------------------------------------------------------
Gold produced (oz)      10,472  10,241 Gold production in Q1 2014 was
                                       adversely affected by lower head
                                       grade and lower tonnage throughput
----------------------------------------------------------------------------
On Mine cash cost          652     651 On-mine costs for gold sold in Q1
 (US$/oz)(1)                           2014 benefitted from work in progress
                                       brought forward from the preceding
                                       quarter with a carrying value of $411
                                       per ounce
----------------------------------------------------------------------------
All-in sustaining cost     924     923 All-in Sustaining costs remain stable
 (US$/oz)(1)
----------------------------------------------------------------------------
Gold Sales (oz)         11,964  12,210 Gold sales in Q1 2014 includes work
                                       in progress brought forward from the
                                       preceding quarter of 1,969 per ounce
----------------------------------------------------------------------------
Average realised gold    1,600   1,288 The lower realised gold price was
 price (US$/oz)(1)                     primarily due to the lower gold price
----------------------------------------------------------------------------
Gross profit ($'m)(2)      9.0     6.0 Lower gross profit was mainly due to
                                       the lower realised gold prices,
                                       ameliorated by the sale of gold work
                                       in progress brought forward
----------------------------------------------------------------------------
Net profit                 4.6     3.5 Lower gross profit was ameliorated by
 attributable to                       increased foreign exchange gain,
 shareholders ($'m)                    reduced effective tax rate and the
                                       sale of work in progress brought
                                       forward from the preceding quarter
----------------------------------------------------------------------------
Adjusted basic            11.9     4.1 Adjusted basic earnings per share
 earnings per share(1)                 excludes foreign exchange profits.
 (cents)
----------------------------------------------------------------------------
Cash and cash             25.2    26.7 Caledonia's cash is held in Canadian,
 equivalents ($'m)                     UK and South African banks.
----------------------------------------------------------------------------
Cash from operating        2.2     6.2 Strong cash generation in Q1 due to
 activities ($'m)                      stable working capital and lower
                                       taxation payments.
----------------------------------------------------------------------------
(1) Measures such as "on-mine cash cost per ounce" "all-in sustaining cost
per ounce", "average realised gold price" and "adjusted earnings per share"
are Non-IFRS measures. Refer to Section 10 of the MD&A for a discussion of
non-IFRS measures.
(2) Gross profit is after deducting royalties, production costs and
depreciation but before administrative expenses.

Growth at the Blanket mine

Blanket continues to implement its growth strategy which will result in production increasing to approximately 48,000 ounces of gold in 2014 and 52,000 ounces of gold in 2015. Further increases in production are expected following the completion of the No. 6 Winze Project, which is intended to provide access to deeper resources below 750 meters.

Blanket: low-cost, highly cash generative

Blanket's results for the Quarter confirm its position as a low-cost producer, despite the planned increased capital investment. These investments to increase production at Blanket are expected to result in continued strong cash generation, notwithstanding any further decreases in the gold price, as Blanket's fixed cost base is spread across more production ounces.

Following the implementation of Indigenisation at Blanket in September 2012, Caledonia receives 49% of Blanket's dividend distributions in addition to receiving the repayments of the facilitation loans of US$30 million.

Caledonia's Dividend Policy

On November 25, 2013 Caledonia announced a revised dividend policy. Caledonia intends to pay a dividend of six Canadian cents per share in 2014, split into four equal quarterly payments of 1.5 Canadian cents per share. The first quarterly dividend was paid on January 31, 2014; the second quarterly dividend was paid on April 30. 2014. The next quarterly dividend is expected to be paid on July 31, 2014.

Caledonia's total 2014 dividend of six cents per share is over eight times covered by Caledonia's cash resources at March 31, 2014 and 2.7 times covered by adjusted earnings attributable to Caledonia shareholders in the Quarter.

Caledonia will continue to maintain its strong financial position so that it can implement its stated growth strategy and retain the flexibility to take advantage of any opportunities that may arise without the need to raise third party finance.

Caledonia's Strategy

Caledonia's primary strategy is to continue the existing investment programme at Blanket with the objective of increasing production. Caledonia's Board believes the continuation of this strategy is in the best interests of shareholders because it is expected to increase cash flows and accelerate the repayment of the outstanding facilitation loans. Subject to an ongoing evaluation of the investment climate in Zimbabwe, Blanket and Caledonia will also consider additional acquisition opportunities in Zimbabwe on the basis of, inter alia, their fit with the existing operations and their capacity to enhance value for both Blanket's indigenous shareholders and Caledonia.

Caledonia will also use its financial and managerial resources which are outside Zimbabwe to consider any new opportunities in sub-Saharan Africa.

Outlook

Despite the lower and volatile gold price from April 2013, development and exploration activity at Blanket has continued unabated. Production is expected to increase to 48,000 ounces in 2014 and 52,000 ounces in 2015.

Exploration at Blanket below 750 meters continues and we are encouraged by the results evaluated so far. Work is in progress to add this resource body to the mine's mineral resource inventory.

Blanket has surplus metallurgical plant capacity and is sufficiently cash generative so that, provided the investment climate is acceptable, Caledonia could invest in projects with a view to further increasing production, thereby helping to maintain downward pressure on the cost per ounce of gold produced.

An increase in unavoidable internal dilution due to low grade lenses within the ore zone is expected to put downward pressure on the mined grade for the coming months. Accordingly, the average mined grade is expected to be between 3.6 grams per tonne ('g/t') and 3.7 g/t of gold as opposed to our targeted grade of 3.83 g/t for the next two quarters. Blanket management continues to pay close attention to minimising grade dilution. The lower average mined grade is expected to be reflected in a lower average feed grade of material into the metallurgical plant.

Commenting on these results, Stefan Hayden, Caledonia's President and Chief Executive Officer said:

"New production areas have and are being developed and I am confident that the 2014 production target of 48,000 ounces will be achieved, with 52,000 ounces expected in 2015.

"Cash generation in the quarter was strong: net cash generated from operating activities in Q1 of 2014 was $6.2m compared to $4.8m in the previous quarter and $2.2 million in the first quarter of 2013. Since the beginning of 2014 Blanket has sold its gold production to Fidelity Printers and Refiners. The new sales arrangements with Fidelity have reduced Blanket's working capital requirement due to the earlier payment terms. Blanket has received all payments due from Fidelity in-full and on-time.

"Blanket's on-mine cash cost decreased in the Quarter from the previous quarter due to the reversal of the adverse effect of high work-in-progress at December 31, 2013. Work-in-progress was brought forward at a carrying value of $411 per ounce, which reduced the average cost per ounce of the gold sold in the quarter.

"Underlying costs at Blanket remain stable: there have been no significant increases in electricity or consumable costs and the 2014 labour negotiations have recently been finalised at an across-the-board increase of approximately 5 per cent. It is expected that Blanket's on-mine cash costs will decrease as production increases."

The full Report & Accounts, including the Management Discussion and Analysis for the quarter ended March 31, 2014 are available from the Company's website www.caledoniamining.com and from SEDAR.

----------------------------------------------------------------------------
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive
 Income (unaudited)
(in thousands of Canadian dollars except per share amounts)
                                                 Three months ended March 31
                                                          2014          2013
                                                             $             $
Revenue                                               17,063         19,218
Royalty                                               (1,195)        (1,349)
Production costs                                      (8,788)        (8,019)
Depreciation                                          (1,058)          (803)
                                                ----------------------------
Gross profit                                           6,022          9,047
Administrative expenses                               (1,847)        (1,175)
Foreign exchange gain/(loss)                           1,311              -
                                                ----------------------------
Results from operating activities                      5,486          7,872
Net finance income/(expense)                             (41)           (64)
                                                ----------------------------
Profit before tax                                      5,445          7,808
Tax expense                                           (1,300)        (2,278)
                                                ----------------------------
Profit for the period                                  4,145          5,530
                                                ----------------------------

Other comprehensive income
Items that are or may be reclassified to profit
 or loss
Foreign currency translation differences for
 foreign operations                                    1,080            827
                                                ----------------------------
Other comprehensive income net of income tax           1,080            827
                                                ----------------------------
Total comprehensive income for the period              5,225          6,357
                                                ----------------------------

Profit attributable to:
Shareholders of the Company                            3,479          4,593
Non-controlling interests                                666            937
                                                ----------------------------
Profit for the period                                  4,145          5,530
                                                ----------------------------

Total comprehensive income attributable to:
Shareholders of the Company                            4,558          5,530
Non-controlling interests                                667            827
                                                ----------------------------
Total comprehensive income for the period              5,225          6,357
                                                ----------------------------

Earnings per share (cents)(iii)
Basic                                                    6.6            9.0
Diluted                                                  6.6            9.0
Adjusted earnings per share (cents) (ii)(iii)
Basic                                                    4.1           11.9
Diluted                                                  4.1           11.9
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Condensed Consolidated Statement of Cash Flows (unaudited)
(in thousands of Canadian dollars)
                                                 Three months ended March 31
                                                          2014          2013
                                                             $             $
Cash flows from operating activities
Cash generated by operating activities                 6,868          5,435
Net interest paid                                        (41)           (64)
Tax paid                                                (600)        (3,163)
                                                ----------------------------
Net cash from operating activities                     6,227          2,208

Cash flows from investing activities
Acquisition of Property, plant and equipment          (2,032)        (1,340)
                                                ----------------------------
Net cash used in investing activities                 (2,032)        (1,340)
                                                ----------------------------

Cash flows from financing activities
Advance dividends paid                                     -           (969)
Dividends paid                                          (907)        (2,834)
Proceeds from the exercise of share options                -            182
                                                ----------------------------
Net cash from (used in) financing activities            (907)        (3,621)
Net increase/(decrease) in cash and cash
 equivalents                                           3,288         (2,753)
Cash and cash equivalents at beginning of the
 year                                                 23,426         27,942
                                                ----------------------------
Cash and cash equivalents at year end                 26,714         25,189
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Condensed Consolidated statements of Financial Position (unaudited)
(In thousands of Canadian dollars)
                                           As at      March 31  December 31,
                                                          2014          2013
                                                             $             $
Total non-current assets                                36,181        33,448
Inventories                                              6,847         6,866
Prepayments                                                179           177
Trade and other receivables                              3,854         3,889
Cash and cash equivalents                               26,714        25,222
                                                ----------------------------
Total assets                                            73,775        69,602
                                                ----------------------------
Non-current liabilities                                 10,622        10,094
Trade and other payables                                 5,027         4,600
Income taxes payable                                     1,834         1,138
Bank overdraft                                               -         1,796
                                                ----------------------------
Total liabilities                                       17,483        17,628
Total equity                                            56,292        51,974
                                                ----------------------------
Total equity and liabilities                            73,775        69,602
----------------------------------------------------------------------------

Contacts:
Caledonia Mining Corporation
Mark Learmonth
+27 11 447 2499
[email protected]
www.caledoniamining.com

Numis
JohnPrior / Jamie Loughborough / James Black
+44 20 7260 1000

Blytheweigh
Tim Blythe / Halimah Hussain / Camilla Horsfall
+44 20 7138 3204

WH Ireland
Adrian Hadden / Nick Field
+44 20 7220 1751

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
DX World EXPO, LLC, a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Conference Guru has been named “Media Sponsor” of the 22nd International Cloud Expo, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. A valuable conference experience generates new contacts, sales leads, potential strategic partners and potential investors; helps gather competitive intelligence and even provides inspiration for new products and services. Conference Guru works with conference organizers to pass great deals to gre...
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and shared the must-have mindsets for removing complexity from the develop...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
The next XaaS is CICDaaS. Why? Because CICD saves developers a huge amount of time. CD is an especially great option for projects that require multiple and frequent contributions to be integrated. But… securing CICD best practices is an emerging, essential, yet little understood practice for DevOps teams and their Cloud Service Providers. The only way to get CICD to work in a highly secure environment takes collaboration, patience and persistence. Building CICD in the cloud requires rigorous ar...
Companies are harnessing data in ways we once associated with science fiction. Analysts have access to a plethora of visualization and reporting tools, but considering the vast amount of data businesses collect and limitations of CPUs, end users are forced to design their structures and systems with limitations. Until now. As the cloud toolkit to analyze data has evolved, GPUs have stepped in to massively parallel SQL, visualization and machine learning.
"Evatronix provides design services to companies that need to integrate the IoT technology in their products but they don't necessarily have the expertise, knowledge and design team to do so," explained Adam Morawiec, VP of Business Development at Evatronix, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
"ZeroStack is a startup in Silicon Valley. We're solving a very interesting problem around bringing public cloud convenience with private cloud control for enterprises and mid-size companies," explained Kamesh Pemmaraju, VP of Product Management at ZeroStack, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Large industrial manufacturing organizations are adopting the agile principles of cloud software companies. The industrial manufacturing development process has not scaled over time. Now that design CAD teams are geographically distributed, centralizing their work is key. With large multi-gigabyte projects, outdated tools have stifled industrial team agility, time-to-market milestones, and impacted P&L stakeholders.
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Enterprises are adopting Kubernetes to accelerate the development and the delivery of cloud-native applications. However, sharing a Kubernetes cluster between members of the same team can be challenging. And, sharing clusters across multiple teams is even harder. Kubernetes offers several constructs to help implement segmentation and isolation. However, these primitives can be complex to understand and apply. As a result, it’s becoming common for enterprises to end up with several clusters. Thi...