Caledonia Min Regulatory News (CMCL)

12 Aug 2005 14:23

Caledonia Mining Corporation12 August 2005 Caledonia Mining Corporation Second Quarter Results 2005 Toronto, Ontario - August 12, 2005: Caledonia Mining Corporation ("Caledonia")(TSX: CAL, NASDAQ-OTCBB: CALVF, AIM: CMCL) is pleased to announce its keyfinancial and operating results for the second quarter ended June 30, 2005. Thefinancial results are reported in Canadian dollars except where otherwisestated. Operational Highlights Barbrook Gold Mine - Gold production increased by 85% to 1,712 ounces of gold, (Q1: 925 ozs) following continued metallurgical plant improvements. - Doubling the treatment capacity of the metallurgical plant to 15,000 tonnes per month is currently being designed. Construction is scheduled to start prior to September 30 and expected to take 3 to 4 months. - Decision on the construction of a Biox(R) plant deferred until this plant expansion is completed and has been assessed. - Economic gold grades have been intersected in the Taylors ore body between 10 and 7 levels in an area previously considered to be barren of gold mineralization. - Senior management changes including the appointment of Patrick Smith as the Mine Manager. Exploration - Drilling commenced on the Grasvally platinum property in May and 3,192 meters drilled during the quarter. - The planned drilling programs on the Rooipoort platinum property have been completed with 1,227 meters drilled during the quarter. - Reconnaissance mapping commenced at the Eersteling Gold Project in June to follow-up results from the recent geophysical survey. - Testing by Mintek of the Nama "A" anomaly ore largely completed. Test work to further optimize the overall cobalt recoveries and concentrate grades will be completed during the third quarter. - Approval obtained from the Environmental Council of Zambia for an amendment to the existing Environmental Brief to allow pilot plant operations at the Nama Cobalt Project. Corporate - In June Caledonia listed on the London Stock Exchange's AIM Market, ticker symbol "CMCL", and placed a small float of shares into the AIM market in conjunction with a financing. - The financing on AIM raised £1.57 million (Cdn$3.54 million) before expenses. - A Letter of Intent was signed with a cobalt refinery for the long-term supply of cobalt concentrate from the Nama Project, on condition that the testwork and commercial process is satisfactory. For the quarter ended June 30, 2005 Caledonia recorded an operating loss of $1.4million ($0.005 per share) compared with an operating loss of $1.4 million($0.005 per share) in the same quarter of 2004. The net loss after all expenses, a change in the application of the accountingpolicy regarding amortization, ongoing exploration and assay costs, Nama testwork costs, and exchange losses was $3.3 million ($0.011 per share) for thequarter ended June 30, 2005. Previously reported results, which excludedamortization, were a net loss of $1.4 million ($0.005 per share) during the sameperiod in 2004. Reviewing the quarter, Stefan Hayden, President and CEO, said, "I'm pleased toreport the performance trend at Barbrook has continued, with gold production upby 85% to 1,712 ounces, despite the mining of a lower grade section. This wasnecessary due to the geometry of the ore zone and the mining sequence, and themining of a higher grade area will recommence in August. The doubling of themetallurgical plant capacity to treat 15,000 tonnes per month is currently beingdesigned. The recent completed access of a mineralized zone that was previouslyconsidered to be barren should enable Barbrook to effectively double monthlygold production sooner than originally planned. Construction of the plantexpansion will start late in the third quarter and is expected to take 3 to 4months. The cost estimate of the plant expansion will be released once thedesign has been finalized. At Grasvally, immediately upon receiving the New Order Prospecting Right wemobilized drill rigs to commence a drilling program. To date, 3,192 meters havebeen drilled and we anticipate reporting drill results to shareholders duringthe third quarter. At Nama, the testing of "A" anomaly ore sample was largely completed with Mintekcarrying out additional work to optimize the overall cobalt recoveries andconcentrate grades. We have also taken the first step towards developing theproject with the signing of a Letter of Intent with a large cobalt refinery. Thediscussions with the refinery are ongoing regarding the next phase of theirmetallurgical testwork, which is expected to be completed during the thirdquarter. Provided that a commercial process is satisfactory, the details of thelong-term offtake agreement will then be finalised and a pilot plant will bebuilt as soon as practical at Nama with technical assistance from the refinery.In anticipation of this, Caledonia has received approval from the EnvironmentalCouncil of Zambia for an amendment to the existing Environmental Brief to allowfor mining operations to feed the pilot plant. Discussions with a growing numberof large end-users continue. Turning to our exploration projects, a number of programs commenced during thequarter at Grasvally, Kirkerk, Nama and Eersteling, which will be completedduring the third quarter, the results of which will be reported to shareholdersbefore the year-end. In short, I believe Caledonia has made a good start in the first half of 2005 aswe have already achieved a number of our stated 2005 objectives. The second halfof the year is expected to be exciting and rewarding for Caledonia. I anticipatea further increase in gold production from Barbrook which should be favourablyimpacted by the plant expansion. Ongoing development of the Nama Cobalt Project,the Rooipoort Platinum Project, and the Mulonga Plains Diamonds Joint Venturedrilling which will commence during the third quarter, should contribute toCaledonia's further growth and success". Caledonia Management's Discussion and Analysis was published on August 12, 2005and is available on the company's website: www.caledoniamining.com. For more information, please contact:Stefan Hayden Alex Buck / Nick BiasPresident and CEO, Caledonia Mining buck-biasTel: +27 11 447 2499 Tel: +44 7932 740 452 Further information regarding Caledonia's operations, exploration activities,press releases and financials may be found at www.caledoniamining.com. Certain statements included herein are "forward-looking statements". Managementcautions that forward- looking statements are not guarantees, and that actualresults could differ materially from those expressed or implied in theforward-looking statements. Important factors that could cause the actualresults of operations, exploration or development programmes, or the financialcondition of the Corporation, to differ include, but are not necessarily limitedto, the risks and uncertainties discussed in documents filed by the Corporationwith the various regulatory authorities having jurisdiction. Caledonia Mining CorporationConsolidated Balance Sheets(in thousands of Canadian dollars) June 30, June 30, December 31,(Unaudited) 2005 2004 2004 AssetsCurrentCash and short term deposits 2,482 12,644 6,470Accounts receivable 599 325 316Inventories 839 29 508Prepaid expenses 3 4 187 ____________ ____________ ____________ 3,923 13,002 7,481 Investment at cost 79 79 79Capital assets 7,141 9,411 7,158Mineral properties 10,859 7,891 8,948 ____________ ____________ ____________ 22,002 30,383 23,666 ____________ ____________ ____________ Liabilities and Shareholders'EquityCurrentAccounts payable 1,252 597 1,062 Provision for site restoration 397 904 423 ____________ ____________ ____________ 1,649 1,501 1,485 ____________ ____________ ____________ Shareholders' EquityShare capital 176,470 173,318 173,304Contributed surplus 548 437 480Compensation warrants 321 307 321Deficit (156,986) (145,180) (151,924) ____________ ____________ ___________ 20,353 28,882 22,181 ____________ ____________ ___________ 22,002 30,383 23,666 Caledonia Mining CorporationConsolidated Statements of Deficit(in thousands of Canadian dollars) Three month period ended June 30, Six month period ended June 30,(Unaudited) 2005 2004 2003 2005 2004 2003Deficit,beginning (153,710) (143,670) (127,657) (151,924) (141,945) (127,449)Net (loss)for the period (3,276) (1,435) (1,406) (5,062) (3,160) (1,614) __________ __________ ________ _________ ________ __________Deficit, endof period (156,986) (145,105) (129,063) (156,986) (145,105) (129,063) Consolidated Statements of Operations(in thousands of Canadian dollars except per share amounts) Three month period ended June 30, Six month period ended June 30, (Unaudited) 2005 2004 2003 2005 2004 2003Revenue andoperatingcosts Revenue fromsales 965 30 - 1,446 170 53Operatingcosts 2,393 1,396 1,232 4,141 2,711 1,304 ________ ________ _______ ________ ________ ________Operatingprofit (loss) (1,428) (1,366) (1,232) (2,695) (2,541) (1,251) ________ ________ _______ ________ ________ ________ Costs andexpenses General andadministrative 728 660 258 1,224 959 628Interest 5 88 44 5 135 64Other expense(income) 1,115 (679) (128) 1,138 (462) (329) ________ ________ _______ ________ ________ ________ 1,848 69 174 2,367 632 363 ________ ________ _______ ________ ________ ________ (Loss) beforenon-controlling interest (3,276) (1,435) (1,406) (5,062) (3,173) (1,614)Non-controllinginterest - - - - (13) - ________ ________ _______ ________ ________ ________Net (loss) forthe period (3,276) (1,435) (1,406) (5,062) (3,160) (1,614) Operating(loss) pershare (Note 2) Basic andfully diluted ($0.005) ($0.005) ($0.006) ($0.009) ($0.009) ($0.006) Net (loss) pershare (Note 2) Basic andfully diluted ($0.011) ($0.005) ($0.006) ($0.017) ($0.011) ($0.007) Caledonia Mining CorporationConsolidated Statements of Cash Flows(in thousands of Canadian dollars) Three month period ended June 30, Six month period ended June 30,(Unaudited) 2005 2004 2003 2005 2004 2003Cash provided by(used in) Operatingactivities Operating(loss) for theperiod (1,428) (1,366) (1,232) (2,695) (2,541) (1,251) Other costsand expensesandnon-controlling interests (1,848) (69) (174) (2,367) (619) (363) Adjustments toreconcile netcash from operations 326 (682) 0 518 (592) 18 Changes innon-cashworkingcapital Balances (99) (169) (67) (242) (157) (336) ______ _______ ________ ________ _______ _______ (3,049) (2,286) (1,473) (4,786) (3,909) (1,932) ______ _______ ________ ________ _______ _______ Investingactivities Expenditureson capitalassets (69) (927) (10) (256) (1,114) (194)Expenditureson mineralproperties (956) (496) (45) (2,112) (679) (1,081) ______ _______ _______ _______ _______ ______ (1,025) (1,423) (55) (2,368) (1,793) (1,275) ______ _______ _______ _______ _______ ______ FinancingactivitiesLoan payable - (5) - (44)Issue of sharecapital net ofissue costs 3,166 4,885 9 3,166 14,167 2,520 ______ ______ ______ _______ ______ ______ 3,166 4,885 4 3,166 14,167 2,476 ______ ______ ______ _______ ______ ______ Increase(decrease) incash for theperiod (908) 1,176 (1,524) 3,988 8,465 (731)Cash and cashequivalents,beginning ofperiod 3,390 11,468 2,657 6,470 4,179 1,864 ______ _______ _______ _______ ______ _______Cash and cash equivalents,end of period 2,482 12,644 1,133 2,482 12,644 1,133 ______ _______ _______ _______ ______ _______ This information is provided by RNS The company news service from the London Stock Exchange