HomeGoldCaledonia posts profit of $13.9 million, 51% increase on Q2,2020

Caledonia posts profit of $13.9 million, 51% increase on Q2,2020

“Over 165,000 tonnes were milled in the Quarter which is a new record for Blanket and reflects the contribution of Central Shaft which is now operational,” comments CEO, Steve Curtis.

“Higher production, lower costs and a higher gold price resulted in a significant increase in the underlying profitability of our business with gross profit increasing by 51 per cent compared to the comparable quarter in 2020. Net profit was adversely affected by the impairment of the Glen Hume exploration asset following the Board’s decision not to proceed further with this project because the property does not meet Caledonia’s strategic requirements in terms of size, grade and width. EBITDA, excluding foreign exchange gains and losses, export incentives and asset impairments, increased over 100 per cent from $6.9 million in Q2 2020 to $14.0 million in the Quarter.

“The increased production meant that cash generated by operations was almost $15.0 million for the Quarter, compared to $2.5 million in the preceding quarter and $5.4 million in the comparable quarter.

“Excellent production was achieved without compromising on safety.  During the Quarter Blanket passed the milestone of achieving two million fatality-free shifts.

“Production in July was slightly less than 6,000 ounces of gold, which demonstrates that Blanket continues to ramp-up production towards the target rate of 6,700 ounces per month that is required to achieve the production target of 80,000 ounces per annum from 2022.  

“Although COVID-19 had no discernible effect on production in the Quarter, management has re-introduced strict access controls to the mine and the mine village to limit the rate of transmission of the virus. Blanket is also in the process of vaccinating its workforce and their families.

“The solar project, which is expected to provide approximately 27 per cent of Blanket’s average daily electricity usage is now in the procurement phase and project completion is expected in April 2022.

“In April, the Company paid a further increased quarterly dividend of 12 cents per share, then in July declared a quarterly dividend of 13 cents per share, paid at the end of July.  This was the sixth increased quarterly dividend and an 89 per cent increase from 6.875 cents paid in October 2019.

“This has been a strong Quarter and these results have left us well placed to achieve our guidance of between 61,000-67,000 ounces for the year. Our immediate strategic focus continues to be to increase production to 80,000 ounces in 2022, while undertaking further exploration and development with the objective of extending the life of mine beyond 2034 thereby safeguarding and enhancing Blanket’s long-term future. Caledonia will also evaluate further investment opportunities in Zimbabwe and elsewhere.”