Caledonia Mining reports rise in first quarter revenue

(Sharecast News) - Caledonia Mining reported a rise in first-quarter revenue and profit on Monday as higher gold prices offset lower production at its Blanket mine in Zimbabwe.

The AIM-traded company said revenue for the three months ended 31 March rose 18.3% to $66.4m from $56.2m a year earlier, driven by a 66.3% increase in the average realised gold price to $4,816 an ounce.

EBITDA increased 50.2% to $33.9m, while profit after tax rose 69.4% to $18.9m.

Basic earnings per share increased 77.8% to 80 cents, and free cash flow rose to $12.3m from $4.9m.

Blanket produced 14,767 ounces of gold during the quarter, down 20.9% from 18,671 ounces a year earlier, while consolidated gold sales, including the Bilboes oxide operation, fell to 13,784 ounces from 19,388 ounces.

Caledonia said production had been hit by constrained access to higher-grade areas.

Although tonnes milled were slightly higher than in the prior year, head grade fell to 2.5 grams per tonne from 3.1 grams, while recovery declined to 91.9% from 93.6%.

The lower sales volumes pushed consolidated on-mine costs up to $1,740 per ounce sold from $1,202, while all-in sustaining costs rose to $2,765 per ounce from $1,797.

Chief executive officer Mark Learmonth said the company had already implemented measures to improve grades, with month-on-month improvement during the quarter continuing into April.

"As previously advised, we expect production to be weighted towards the second half of the year and we reiterate our full-year production guidance at Blanket of 72,000 to 76,500 ounces," he said.

Learmonth added that encouraging deep-level drilling results at Blanket continued to demonstrate the continuity and quality of the orebodies at depth, supporting confidence in the long-term future of the mine.

Caledonia said progress also continued on advancing financing for the Bilboes gold project, following the publication of a feasibility study in November and the completion of a $150m convertible senior notes offering in January.

The board approved a quarterly dividend of 14 cents per share, payable on 5 June.

"We continue to trade in line with market expectations and with a strong gold price environment, improving operational performance at Blanket and continued progress towards developing Bilboes, we remain confident in our strategy and our ability to deliver long-term value for shareholders," Learmonth said.

At 1211 BST, shares in Caledonia Mining Corporation were up 3.41% at 1,820p.

Reporting by Josh White for Sharecast.com.

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