Jersey -
Further information on the financial and operating results for the Quarter can be found in the Management Discussion and Analysis ('MD&A') and the unaudited interim financial statements which are available on the Company's website and which have been filed on SEDAR.
Financial Highlights
Gross revenues of
EBITDA excluding net foreign exchange gains and the export incentive credit of
On-mine cost1 of
Normalised all-in sustaining cost1 (excluding the effect of the export credit incentive and its successor scheme) of
Adjusted earnings per share1 of
Net cash from operating activities of
Cash from operations was adversely affected by increased working capital, in particular higher amounts due for gold sales these have been settled in full after the end of the Quarter.
Responsibility for making payments for gold deliveries from the
Net cash and cash equivalents of
Dividend paid in the Quarter of
Changes to the proportion of dollar-denominated revenue that we must surrender for local currency, increased from 30 per cent to 40 per cent. We have accommodated this change by increasing our local currency denominated expenditures and by participating in the weekly foreign currency auction.
Operating Highlights
13,197 ounces of gold produced in the Quarter (Q1 2020: 14,233 ounces). Production was adversely affected by underground flooding and lower grades.
Grade of 2.98g/t (Q1 2020: 3.35). Grade was low due to a fall-of-ground problem in a high-grade area.
The Central Shaft was commissioned at the end of the Quarter and is now operational.
Total injury frequency rate for the first quarter was 0.79 compared to 0.97 for 2020. Blanket mine achieved 1,857,844 fatality free shifts as at end of the Quarter.
The 12MWac solar project is now in the procurement phase and is expected to be operational within the next 12 months.
Post Quarter-End Highlights and Outlook
Quarterly dividend increased by 9 per cent to
A strong recovery in production in April: 5,470 ounces were produced in April which is above plan and 24 per cent higher than the average monthly production in the Quarter.
2021 gold production guidance of between 61,000 - 67,000 ounces.
Cash balance at
'Gold production in April show a marked improvement and Blanket produced 5,470 ounces in April, which is better than planned. The strong recovery in performance has continued into May and we are confident that we will achieve our full year guidance of between 61,000 and 67,000 ounces.
'Operating costs were well controlled with the increase in the on-mine cost per ounce predominantly due to lower grades and recoveries, which has now been addressed. The cost per tonne mined increased by only 4 per cent in the Quarter compared to the first quarter of 2020 and this was due largely to increased usage of diesel generators because of continued grid supply problems. Given the high fixed cost base, I expect that costs per ounce will reduce as production increases.
'Early in the Quarter the proportion of dollar-denominated revenue that we must surrender for local currency increased from 30 per cent to 40 per cent. We have accommodated this change by increasing our local currency denominated expenditures and by participating in the weekly foreign currency auctions. We are not accumulating excessive local currency balances which we are unable to convert into hard currency and remit out of
'Responsibility for making payments for gold deliveries from the
'As a result of the normalisation of working capital and helped by the higher production in April, our consolidated cash position improved from
'We are delighted to have commissioned the Central Shaft at the end of the Quarter. The shaft is now hoisting waste material arising from the final development to connect the shaft to the production areas. This has relieved pressure on the Number 4 Shaft which can focus on hoisting ore until Central shaft takes over this role later in the year. The commissioning of Central shaft means that, despite the slow start to the year, we are confident we will achieve our production guidance for 2021 of between 61,000 to 67,000 ounces and 80,000 ounces per annum from 2022 onwards.
'We increased the dividend for the fourth time at the start of January to
'In December we announced that we had entered into option agreements on two properties,
'Safety remains our primary concern, and I am pleased to report that the Quarter passed without serious incident. I am also delighted to note that the Central Shaft was commissioned at the end of the Quarter without serious accidents. This was a six-year project which involved sinking and equipping a shaft to a depth of over 1,200 meters. This activity is notoriously high-risk and it is a credit to all involved that we completed the project safely.
'We continue to take extraordinary measures to protect our workers and their families from COVID-19. To date, we have recorded 38 positive tests results amongst our 1,650 workers and their dependants at Blanket, none of whom required hospitalisation. We have also placed orders for vaccines for our workers and their families.
'Caledonia's immediate strategic focus is to convert the commissioning of Central Shaft project into higher production, lower costs and increased cash generation. We will also finalise the exploration activities at Glen Hume and
Contact:
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Cautionary Note Concerning Forward-Looking Information
Information and statements contained in this news release that are not historical facts are 'forward-looking information' within the meaning of applicable securities legislation that involve risks and uncertainties relating, but not limited to Caledonia's current expectations, intentions, plans, and beliefs. Forward-looking information can often be identified by forward-looking words such as 'anticipate', 'believe', 'expect', 'goal', 'plan', 'target', 'intend', 'estimate', 'could', 'should', 'may' and 'will' or the negative of these terms or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Examples of forward-looking information in this news release include: production guidance, estimates of future/targeted production rates, and our plans and timing regarding further exploration and drilling and development. This forward-looking information is based, in part, on assumptions and factors that may change or prove to be incorrect, thus causing actual results, performance or achievements to be materially different from those expressed or implied by forward-looking information. Such factors and assumptions include, but are not limited to: failure to establish estimated resources and reserves, the grade and recovery of ore which is mined varying from estimates, success of future exploration and drilling programs, reliability of drilling, sampling and assay data, assumptions regarding the representativeness of mineralization being inaccurate, success of planned metallurgical test-work, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors.
Security holders, potential security holders and other prospective investors should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. Such factors include, but are not limited to: risks relating to estimates of mineral reserves and mineral resources proving to be inaccurate, fluctuations in gold price, risks and hazards associated with the business of mineral exploration, development and mining, risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom the Company does business; inadequate insurance, or inability to obtain insurance, to cover these risks and hazards, employee relations; relationships with and claims by local communities and indigenous populations; political risk; risks related to natural disasters, terrorism, civil unrest, public health concerns (including health epidemics or outbreaks of communicable diseases such as the coronavirus (COVID-19)); availability and increasing costs associated with mining inputs and labour; the speculative nature of mineral exploration and development, including the risks of obtaining or maintaining necessary licenses and permits, diminishing quantities or grades of mineral reserves as mining occurs; global financial condition, the actual results of current exploration activities, changes to conclusions of economic evaluations, and changes in project parameters to deal with unanticipated economic or other factors, risks of increased capital and operating costs, environmental, safety or regulatory risks, expropriation, the Company's title to properties including ownership thereof, increased competition in the mining industry for properties, equipment, qualified personnel and their costs, risks relating to the uncertainty of timing of events including targeted production rate increase and currency fluctuations. Security holders, potential security holders and other prospective investors are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Caledonia undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.
This news release is not an offer of the shares of Caledonia for sale in
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