(Alliance News) - Caledonia Mining Corp PLC on Monday said it will miss its annual profit expectations after facing higher operating expenses.
Shares in Caledonia Mining dropped 15% to 670.00 pence each in London on Monday morning.
The Zimbabwe-focused gold producer said its 2023 production was 75,416 ounces, a 6.6% decrease from 80,775 a year ago, but affirmed that its 2023 revenue will still fall in line with market expectations.
Nevertheless, the company said its adjusted pretax profit for the year will be "materially below market expectations," due to increased operating costs in 2023 as well as several significant one-off, non-operating costs in the final quarter of the year. This will be a reduction from a pretax profit of USD39.6 million in 2022.
The increase in operating costs comprises of higher than expected overtime payments and power costs at Blanket Mine, Caledonia Mining explained.
Looking ahead, the company affirmed that "a significant proportion of these cost increases are not expected to be carried through into 2024."
Chief Executive Officer Mark Learmonth said: "It is regrettable that, at a group level, we have been adversely affected by a series of higher-than-expected costs in the second half of 2023 which have had a negative effect on the full year profitability. The performance of Blanket Mine remains strong and, notwithstanding some unforeseen overtime and power cost issues in the second half, has met guidance and produced a robust performance for the second half of 2023.
"A number of the other cost items are not anticipated to be recurring, whereas others have arisen from our decisions to invest in the business, most notably around personnel and advancing the Bilboes sulphide project. I am confident that many of these will not recur in 2024 which has started positively and I look forward to the future with optimism as we pursue our goal of becoming a multi-asset production company."
By Sabrina Penty, Alliance News reporter
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Caledonia Min (CMCL)