TIDMCMCL
RNS Number : 8115R
Caledonia Mining Corporation
10 November 2011
Caledonia Mining 2011 Third Quarter Results
Toronto, Ontario - November 10, 2011: Caledonia Mining
Corporation ("Caledonia") (TSX: CAL, OTCQX: CALVF, AIM: CMCL) is
pleased to announce its Third Quarter 2011 (the "Quarter")
operating and financial results, which are reported below in
Canadian dollars unless otherwise indicated.
Operational Highlights
-- Gold produced by the Blanket Mine in Zimbabwe in the Quarter
increased by 18% to 9,743 ounces from the 8,226 ounces produced in
the 2(nd) quarter 2011 (the "preceding quarter") and was 97% higher
than the 4,935 ounces of gold produced in 3(rd) quarter 2010 (the
"comparative quarter"). This is the sixth consecutive quarterly
increase in gold production.
-- Average gold recovery increased to 93.1% from 92.9% in the
preceding quarter and from 91.3% in the comparative quarter
reflecting the benefits from investment in improvements to the
milling and Carbon-in-Leach ("CIL") circuits.
-- Cash operating costs at the Blanket Mine in the Quarter were
US$583 per ounce of gold produced compared to US$585 in the
preceding quarter and US$651 in the comparative quarter.
Financial Highlights
-- Gross Profit (i.e. after depreciation and amortization but
before administrative expenses) was $9,364,000 compared to
$1,607,000 in the comparative quarter. This is almost a six-fold
increase on the comparative quarter and is the seventh consecutive
quarterly increase in gross profit.
-- The average price received per ounce of gold sold during the
Quarter was US$1,737 compared to US$1,241 in the comparative
quarter.
-- Caledonia recorded net profit before tax of $8,442,000
compared to $742,000 in the comparative quarter which represents an
11-fold increase.
-- At September 30, 2011 the Corporation had no debt except
current trade payables (September 30, 2010 $1,680,000) and had cash
and cash equivalents of $6,847,000 (net debt as at September 30,
2010 $226,000).
Other Highlights
-- Blanket made payments in respect of direct and indirect
taxes, royalties, licence fees, levies and other payments to the
Government of Zimbabwe during the Quarter totalling US$3,847,000
(US$3,307,000 - Q2 2011).
-- Blanket Mine's Occupational, Safety and Health policies and
procedures were audited by the National Social Security Authority
(the "NSSA") as a result of which Blanket was awarded the NSSA gold
medal in the Mining and Quarrying sector in Matabeleland and the
bronze medal across all industrial sectors in Zimbabwe.
-- Work on the 4-hole drilling program at the Konkola West area
of the Nama base metals project in Zambia has continued. At the end
of October, 3 holes had been completed and the drill rig had been
moved to the fourth hole. The conclusions from this program will be
provided when Management has received and evaluated all of the
results.
Commenting on these results, Stefan Hayden, President and Chief
Executive Officer said: "Caledonia has had, as forecast, a very
strong performance for the third quarter and profits for the third
quarter of 2011 exceeded profits for the entire first half of
2011.
The increase in profit was primarily achieved due to the 18%
increase in gold production and the 15% increase in the average
price of gold sold compared to the second quarter of 2011.
The Blanket Mine in Zimbabwe achieved its target annualised
production level of 40,000 ounces of gold for the last two months
of the third quarter and this level of production was sustained in
October. The increase in production was achieved following the
completion of work to address the remaining constraints to
underground production and included the commissioning of a new ore
pass at the end of July, which substantially improved the
efficiency of underground operations and reduced ore handling
costs. We expect that Blanket Mine will operate sustainably at this
level of production.
Cash costs at the Blanket Mine fell to US$583/oz. from
US$585/oz. in the preceding quarter. The cost per ounce of labour
and electricity was lower than the previous quarter as these are
largely fixed costs and were amortised over the higher production.
The cost per ounce of consumables increased due to the expected
normalisation in the head grade which was reflected in a 40%
increase in the tonnes of ore processed and an 18% increase in gold
production. Overall, however, the cost per tonne of ore mined and
processed fell due to improved underground operating efficiency and
recent investments in the milling and CIL circuits which have
reduced consumable usage and increased recoveries. Blanket's cash
costs remain highly competitive compared with other gold producers,
not only in Zimbabwe, but also in the rest of Africa.
The Blanket Mine recently won several prestigious Safety Health
and Environment ("SHE") awards. These awards reflect the close
attention given to SHE by both Blanket Mine and Caledonia. These
awards also demonstrate that Blanket Mine does not achieve its low
costs by neglecting its obligations in this very important area. It
is hoped that these awards will help to dispel the commonly-held
misconception in Zimbabwe that mining companies act with little
regard for the well-being of their employees and the
environment.
Caledonia submitted a revised indigenization proposal on 12
October, 2011 and continues constructive dialogue with the Minister
of Indigenization, his officials and advisers.
During the third quarter Blanket made payments of approximately
US$3.8 million to the Government of Zimbabwe in respect of direct
and indirect taxation, royalties, licence fees etc. Blanket Mine
also received Taxpayer Appreciation Awards 2011 from the Zimbabwe
Revenue Authority in respect of Income Tax and PAYE categories. It
is hoped that payments of this magnitude and the fact that Blanket
Mine has received recognition in terms of these awards will further
address the widespread misconception in Zimbabwe that mining
companies do not pay tax.
The 4-hole drilling program on the Konkola West area of the Nama
base metals project in Zambia commenced during March 2011 to
identify whether typical copper-belt type mineralisation, which is
the primary type of mineralisation found in Zambian copper and
cobalt deposits, exists similar to that on the adjacent property to
the east of the Nama Licence Area. At the end of October 2011 3
holes had been completed and work on the fourth hole had commenced.
This drilling program is expected to be completed in the fourth
quarter 2011 and the final assay results received thereafter. The
conclusions arising from this program will be released once
management has received and evaluated all of the results.
The culmination of the investment programs at the Blanket Mine
over the past 30 months has substantially transformed Caledonia's
financial and operating performance as demonstrated by these third
quarter results. The implementation of these programs in a very
difficult environment is a testament to the high engineering
standards and the hard work, determination and creativity of the
management and employees of Caledonia and Blanket Mine.
Financial Highlights
Consolidated Statement of Comprehensive Income (unaudited)
(In thousands of Canadian dollars except per share amounts)
For the 3 months For the 9 months
ended Sept 30 ended Sept 30
2011 2010 2011 2010
$ $ $ $
Revenue 16,517 6,357 39,733 14,970
Royalty 743 223 1,791 515
Production costs 5,763 3,915 15,883 9,669
Amortization 647 612 1,853 1,772
--------- -------- --------- --------
Gross profit 9,364 1,607 20,206 3,014
Administrative expenses 910 527 3,587 1,423
Share-based payment - 354 1,102 354
--------- -------- --------- --------
Results from operating activities 8,454 726 15,517 1,236
Finance income 2 60 3 223
Finance expense 14 44 193 200
--------- -------- --------- --------
Profit before income tax 8,442 742 15,327 1,260
Income tax expense 2,292 - 4,404 3
--------- -------- --------- --------
Profit for the period 6,150 742 10,923 1,257
Profit/(loss) on foreign currency
translation 2,152 - 1,077 1
--------- -------- --------- --------
Total comprehensive income
for the period 8,302 742 12,000 1,258
--------- -------- --------- --------
Earnings per share (cents)
Basic 1.23 0.15 2.18 0.25
Diluted 1.13 0.15 2.01 0.25
Weighted average number of
common shares outstanding (thousand)
Basic 500,549 500,169 500,345 500,169
Diluted 543,089 500,169 542,785 500,169
--------------------------------------- --------- -------- --------- --------
Consolidated Statement of Cash Flows (unaudited)
(In thousands of Canadian dollars)
For the 9 months ended
Sept 30
2011 2010
$ $
Cash flows from operating activities
Profit for the period 10,923 1,257
Adjustments for:
Reconcile net cash from operations 8,288 2,093
Changes in non-cash working capital (1,651) (502)
Income tax paid (3,448) (3)
-------- --------------------------
Net cash from operating activities 14,112 2,845
Cash flows from investing activities
Property, plant and equipment additions (7,511) (4,177)
Sale of investment - 51
-------- --------------------------
Net cash used in investing activities (7,511) (4,126)
-------- --------------------------
Cash flows from financing activities
Bank overdraft increase/(decrease) (747) 1,092
Finance expense (193) (200)
Finance income 3 223
Shares issued 38 -
-------- --------------------------
Net cash from (used in) financing
activities (899) 1,115
-------- --------------------------
Net increase/(decrease) in cash and
cash equivalents 5,702 (166)
Cash and cash equivalents at beginning
of period 1,145 1,623
-------- --------------------------
Cash and cash equivalents at end
of period 6,847 1,457
----------------------------------------- -------- --------------------------
Consolidated statements of Financial Position (unaudited)
(In thousands of Canadian Sept 30, December 31,
dollars) As at
2011 2010
$ $
Total non-current assets 34,566 28,348
Inventories 3,413 2,620
Prepayments 87 93
Trade and other receivables 5,111 2,314
Cash and cash equivalents 6,847 1,145
---------- --------------
Total assets 50,024 34,520
---------- --------------
Total non-current liabilities 8,247 7,070
Trade and other payables 5,816 3,882
Bank overdraft - 747
---------- --------------
Total liabilities 14,063 11,699
Capital and reserves 35,961 22,821
Total equity and liabilities 50,024 34,520
----------------------------------- ---------- --------------
For more information, please contact:
Caledonia Mining Corporation Collins Stewart Europe Limited
Mark Learmonth John Prior / Sebastian Jones
Tel: + 27 11 447 2499 Tel: + 44 20 7523 8350
marklearmonth@caledoniamining.com
Renmark Financial Communications Collins Stewart LLC
Inc
John Boidman or Dustin Buenaventura Dan Mintz
Tel: +1 514 939 3989 or +1 416 644 Tel: +1 212 389 8022 DMintz@collinsstewartllc.com
2020
jboidman@renmarkfinancial.com
dbuenaventura@renmarkfinancial.com
Further information regarding Caledonia's exploration activities
and operations along with its latest financials and Management
Discussion and Analysis may be found at www.caledoniamining.com
This information is provided by RNS
The company news service from the London Stock Exchange
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