UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 6-K

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

Of the Securities Exchange Act of 1934

 

For the month of May 2024

 

Commission File Number: 001-38164

 

CALEDONIA MINING CORPORATION PLC

(Translation of registrant's name into English)

 

B006 Millais House
Castle Quay
St Helier
Jersey JE2 3EF

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F

 

Form 20-F      X       Form 40-F ______

 

 

 

INCORPORATION BY REFERENCE

 

Exhibits 99.1 to 99.4 included with this report on Form 6-K are expressly incorporated by reference into this report and are hereby incorporated by reference as exhibits to the Registration Statement on Form F-3 of Caledonia Mining Corporation Plc (File No. 333-255500), as amended or supplemented.

 

 

 

 

 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

CALEDONIA MINING CORPORATION PLC

  (Registrant)  
       
  By: /s/ Mark Learmonth  
Dated: May 13, 2024

Name:

Mark Learmonth  
  Title:

CEO and Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit Index

 

Exhibit Description
   
99.1 Interim Financial Statements/Report
99.2 Interim MD&A
99.3 52-109F2 - Certification of Interim Filings - CEO
99.4 52-109F2 - Certification of Interim Filings - CFO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 99.1

 

Caledonia Mining Corporation Plc

 

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL INFORMATION

 

To the Shareholders of Caledonia Mining Corporation Plc:

 

Management has prepared the information and representations in this interim report. The unaudited condensed consolidated interim financial statements of Caledonia Mining Corporation Plc and its subsidiaries (the “Group”) have been prepared in accordance with IFRS Accounting Standards, as issued by the International Accounting Standards Board (“IFRS”) and, where appropriate, these statements include some amounts that are based on best estimates and judgment. Management has determined such amounts on a reasonable basis in order to ensure that the unaudited condensed consolidated interim financial statements are presented fairly, in all material respects.

 

The accompanying Management Discussion and Analysis (“MD&A”) also includes information regarding the impact of current transactions, sources of liquidity, capital resources, operating trends, risks and uncertainties. Actual results in the future may differ materially from our present assessment of this information because future events and circumstances may not occur as expected.

 

The Group maintains adequate systems of internal accounting and administrative controls, within reasonable cost. Such systems are designed to provide reasonable assurance that relevant and reliable financial information are produced.

 

Management is responsible for establishing and maintaining adequate internal controls over financial reporting (“ICOFR”). Any system of ICOFR, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

 

At March 31, 2024 management evaluated the effectiveness of the Group’s ICOFR and concluded that such ICOFR was effective based on the criteria set forth in the Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organisations of the Treadway Commission.

 

The Board of Directors, through its Audit Committee, is responsible for ensuring that management fulfils its responsibilities for financial reporting and internal control. The Audit Committee is composed of four independent non-executive directors. This Committee meets periodically with management, the external auditor and internal auditor to review accounting, auditing, internal control and financial reporting matters.

 

These unaudited condensed consolidated interim financial statements have not been audited by the Group’s independent auditor.

 

The unaudited condensed consolidated interim financial statements for the period ended March 31, 2024 were approved by the Board of Directors and signed on its behalf on May 13, 2024.

 

 

 

 

 

(Signed) J.M. Learmonth  (Signed) C.O. Goodburn
    
Chief Executive Officer  Chief Financial Officer

 

 1 

 

 

Caledonia Mining Corporation Plc

Consolidated statements of profit or loss and other comprehensive income

(in thousands of United States Dollars, unless indicated otherwise)

For the     Three months ended 
      March 31, 
Unaudited  Note  2024   2023 
            
Revenue      38,528    29,435 
Royalty      (1,934)   (1,480)
Production costs  6   (18,960)   (19,850)
Depreciation  14   (3,819)   (2,255)
Gross profit      13,815    5,850 
Net foreign exchange (loss) gain  7   (4,139)   1,533 
Administrative expenses  8   (2,611)   (5,938)
Net derivative financial instrument expense  9   (302)   (434)
Equity-settled share-based expense  10.2   (201)   (110)
Cash-settled share-based expense  10.1   (53)   (280)
Other expenses  11   (600)   (640)
Other income      164    18 
Operating profit (loss)      6,073    (1)
Finance income  12   6    5 
Finance cost  12   (732)   (772)
Profit (loss) before tax      5,347    (768)
Tax expense      (2,530)   (3,502)
Profit (loss) for the period      2,817    (4,270)
              
Other comprehensive income             
Items that are or may be reclassified to profit or loss             
Exchange differences on translation of foreign operations      (144)   (369)
Total comprehensive income for the period      2,673    (4,639)
              
Profit (loss) attributable to:             
Owners of the Company      2,131    (5,030)
Non-controlling interests      686    760 
Profit (loss) for the period      2,817    (4,270)
              
Total comprehensive income attributable to:             
Owners of the Company      1,987    (5,399)
Non-controlling interests      686    760 
Total comprehensive income for the period      2,673    (4,639)
              
Earnings (loss) per share             
Basic earnings (loss) per share ($)      0.10    (0.30)
Diluted earnings (loss) per share ($)      0.10    (0.30)

 

The accompanying notes on pages 6 to 30 are an integral part of these consolidated financial statements.

 

On behalf of the Board: “J.M. Learmonth”- Chief Executive Officer and “C.O. Goodburn”- Chief Financial Officer.

 

 2 

 

 

Caledonia Mining Corporation Plc

Consolidated statements of financial position

(in thousands of United States Dollars, unless indicated otherwise)

Unaudited     March 31,   December 31, 
As at  Note  2024   2023 
            
Assets             
Exploration and evaluation assets  13   94,702    94,272 
Property, plant and equipment  14   179,424    179,649 
Deferred tax asset      181    153 
Total non-current assets      274,307    274,074 
              
Income tax receivable      80    1,120 
Inventories  15   20,542    20,304 
Derivative financial assets  9.1   26    88 
Trade and other receivables  16   7,558    9,952 
Prepayments  17   3,947    2,538 
Cash and cash equivalents  18   1,831    6,708 
Assets held for sale  19   13,486    13,519 
Total current assets      47,470    54,229 
Total assets      321,777    328,303 
              
Equity and liabilities             
Share capital  20   165,147    165,068 
Reserves      137,876    137,819 
Retained loss      (66,414)   (63,172)
Equity attributable to shareholders      236,609    239,715 
Non-controlling interests      24,407    24,477 
Total equity      261,016    264,192 
              
Liabilities             
Deferred tax liabilities      5,340    6,131 
Provisions  21   10,395    10,985 
Loan notes - long term portion  22   6,405    6,447 
Cash-settled share-based payment - long term portion  10.1   441    374 
Lease liabilities - long term portion      30    41 
Total non-current liabilities      22,611    23,978 
              
Cash-settled share-based payment - short term portion  10.1   313    920 
Income tax payable      102    10 
Lease liabilities - short term portion      141    167 
Loan notes - short term portion  22   665    665 
Trade and other payables  23   20,842    20,503 
Overdraft and term loans  18   15,991    17,740 
Liabilities associated with assets held for sale  19   96    128 
Total current liabilities      38,150    40,133 
Total liabilities      60,761    64,111 
Total equity and liabilities      321,777    328,303 

 

The accompanying notes on pages 6 to 30 are an integral part of these consolidated financial statements.

 

 

 

 3 

 

 

Caledonia Mining Corporation Plc

Consolidated statements of changes in equity

For the years ended December 31,

(in thousands of United States Dollars, unless indicated otherwise)

Unaudited

 

   Note  Share
capital
   Foreign
currency
translation
reserve
   Contributed
surplus
   Equity-
settled
share-based
payment
reserve
   Retained
loss
   Total   Non-
controlling
interests
(NCI)
   Total
equity
 
Balance December 31, 2022      83,471    (9,787)   132,591    14,997    (50,222)   171,050    22,409    193,459 
Transactions with owners:                                           
Dividends declared      -    -    -    -    (627)   (627)   (1,512)   (2,139)
Share-based payments:                                           
- Shares issued on settlement of incentive plan awards  10.1   351    -    -    -    -    351    -    351 
- Equity-settled share-based expense  10.2   -    -    -    110    -    110    -    110 
Shares issued:                                           
- Bilboes acquisition      62,394    -    -    -    -    62,394    -    62,394 
- Equity raise (net of transaction cost)  20   10,014    -    -    -    -    10,014    -    10,014 
Total comprehensive income:      -    -    -    -    -                
(Loss) profit for the period      -    -    -    -    (5,030)   (5,030)   760    (4,270)
Other comprehensive income for the period      -    (369)   -    -    -    (369)   -    (369)
Balance at March 31, 2023      156,230    (10,156)   132,591    15,107    (55,879)   237,893    21,657    259,550 
                                            
Balance December 31, 2023      165,068    (10,409)   132,591    15,637    (63,172)   239,715    24,477    264,192 
Transactions with owners:                                           
Dividends declared*      -    -    -    -    (5,373)   (5,373)   (756)   (6,129)
Share-based payments:                                           
- Shares issued on settlement of incentive plan awards  10.1   79    -    -    -    -    79    -    79 
- Equity-settled share-based expense  10.2   -    -    -    201    -    201    -    201 
Total comprehensive income:                                           
Profit for the period      -    -    -    -    2,131    2,131    686    2,817 
Other comprehensive income for the period      -    (144)   -    -    -    (144)   -    (144)
Balance at March 31, 2024      165,147    (10,553)   132,591    15,838    (66,414)   236,609    24,407    261,016 
   Note   20                                    

 

* Dividends of $2.7 million declared on January 2, 2024 was paid on January 26, 2024. Dividends declared and accrued for on March 27, 2024 were $2.7 million. Dividends to NCI declared and accrued for during the period amounted to $756.

 

The accompanying notes on pages 6 to 30 are an integral part of these consolidated financial statements.

 

 4 

 

 

Caledonia Mining Corporation Plc

Consolidated statements of cash flows

For the years ended December 31,

(in thousands of United States Dollars, unless indicated otherwise)

Unaudited     Three months ended
March 31,
 
   Note  2024   2023 
            
Cash inflow from operations  24   6,535    664 
Interest received      6    5 
Finance costs paid      (573)   (200)
Tax paid      (1,081)   (1,345)
Net cash inflow (outflow) from operating activities      4,887    (876)
              
Cash flows used in investing activities             
Acquisition of property, plant and equipment  14   (3,741)   (4,593)
Acquisition of exploration and evaluation assets  13   (430)   (144)
Acquisition of put options  9.1   (240)    
Net cash used in investing activities      (4,411)   (4,737)
              
Cash flows from financing activities             
Dividends paid      (2,720)   (2,424)
Payment of lease liabilities      (37)   (37)
Shares issued – equity raise (net of transaction cost)  20       10,823 
Loan notes - Motapa payment  22.1       (5,399)
Loan notes - solar bond issue receipts (net of transaction cost)  22.2       4,500 
Net cash (used in) from financing activities      (2,757)   7,463 
              
Net (decrease) increase in cash and cash equivalents      (2,281)   1,850 
Effect of exchange rate fluctuations on cash and cash equivalents      (847)   (157)
Net cash and cash equivalents at the beginning of the period      (11,032)   1,496 
Net cash and cash equivalents at the end of the period      (14,160)   3,189 

 

The accompanying notes on pages 6 to 30 are an integral part of these consolidated financial statements.

 

 

 5 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

1Reporting entity

 

Caledonia Mining Corporation Plc (“Caledonia” or the “Company”) is a company domiciled in Jersey, Channel Islands. The Company’s registered office address is B006 Millais House, Castle Quay, St Helier, Jersey, Channel Islands.

 

These unaudited condensed consolidated interim financial statements as at and for the three months ended March 31, 2024 are of the Company and its subsidiaries (the “Group”). The Group’s primary involvement is in the operation of a gold mine and the exploration and development of mineral properties for precious metals.

 

Caledonia’s shares are listed on the NYSE American LLC stock exchange (symbol – “CMCL”). Depository interests in Caledonia’s shares are admitted to trading on AIM of the London Stock Exchange plc (symbol – “CMCL”). Caledonia listed on the Victoria Falls Stock Exchange (“VFEX”) (symbol – “CMCL”) on December 2, 2021. Caledonia voluntary delisted from the Toronto Stock Exchange (the “TSX”) on June 19, 2020. After the delisting the Company remains a Canadian reporting issuer and has to comply with Canadian securities laws until it demonstrates that Canadian shareholders represent less than 2% of issued share capital.

 

2Basis of preparation

 

(a)Statement of compliance

 

These unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and do not include all the information required for full annual financial statements. Accordingly, certain information and disclosures normally included in the annual financial statements prepared in accordance with IFRS Accounting Standards, as issued by the International Accounting Standards Board (“IFRS”) have been omitted or condensed. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the financial position and performance of the Group since the last annual consolidated financial statements as at and for the year ended December 31, 2023.

 

(b)Basis of measurement

 

These unaudited condensed consolidated interim financial statements have been prepared on the historical cost basis except for:

 

·cash-settled share-based payment arrangements measured at fair value on grant and re-measurement dates;

 

·equity-settled share-based payment arrangements measured at fair value on the grant date; and

 

·derivative financial assets measured at fair value.

 

(c)Functional currency

 

These unaudited condensed consolidated interim financial statements are presented in United States Dollar (“$” or “US Dollars” or “USD”), which is also the functional currency of the Company. All financial information presented in US Dollars has been rounded to the nearest thousand, unless indicated otherwise. Refer to note 7 for changes to Zimbabwean real-time gross settlement, bond notes or bond coins (“RTGS$”), the Zimbabwe Gold (“ZiG”) and its effect on the consolidated statement of profit or loss and other comprehensive income.

 

 6 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

3Use of accounting assumptions, estimates and judgements

 

In preparing these unaudited condensed consolidated interim financial statements, management has made accounting assumptions, estimates and judgements that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Changes in estimates are recognised prospectively.

 

(a)Judgement

 

Judgement is required when assessing whether the Group controls an entity or not. Controlled entities are consolidated. Further information is given in notes 4.

 

For judgement applied to:

·determine functional currency of entities in the Group and the use of the interbank rate of exchange to translate RTGS$, refer to note 7.

 

4Material accounting policies

 

The same accounting policies and methods of computation, except as included below, have been applied consistently to all periods presented in these unaudited condensed consolidated interim financial statements as compared to the Group’s annual consolidated financial statements for the year ended December 31, 2023. In addition, the accounting policies have been applied consistently throughout the Group.

 

(a)Exploration and evaluation assets

 

Qualifying exploration costs are capitalised as incurred. Costs incurred before the legal rights to explore are obtained are recognised in profit or loss. The costs related to speculative drilling on unestablished orebodies at the Blanket Mine, general administrative or overhead costs are expensed as incurred. Exploration and evaluation costs capitalised are disclosed under Exploration and evaluation assets. Qualifying direct expenditures include such costs as mineral rights, options to acquire mineral rights, materials used, surveying costs, drilling costs, payments made to contractors, direct administrative costs and depreciation on property, plant and equipment during the exploration phase.

 

Costs not directly attributable to exploration and evaluation activities, including general administrative overhead costs, are expensed in the period they occur.

 

Once the technical feasibility and commercial viability of the mining project have been determined, the property is considered to be a mine under development and moved to the mine development, infrastructure and other asset category within property, plant and equipment. Capitalised direct costs related to the acquisition, exploration and development of mineral properties remain capitalised, at their initial cost, until the properties to which they relate are ready for their intended use, sold, abandoned or management has determined there to be impairment. Exploration and evaluation assets are tested for impairment at least annually, and before the assets are transferred to mine development, infrastructure and other assets or when an indicator of impairment is identified.

 

Exploration and evaluation assets are not depreciated.

 

 

 7 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

4Material accounting policies (continued)

 

(a)Exploration and evaluation assets (continued)

 

The Group also makes assumptions and estimates regarding the technical feasibility and commercial viability of its mineral projects and the possible impairment of E&E assets by evaluating whether it is likely that future economic benefits will flow to the Group, which may be based on assumptions about future events or circumstances e.g. such as the completion of a feasibility study indicating construction, funding and economic returns that are sufficient. Assumptions and estimates made may change if new information becomes available. If information becomes available suggesting that the recovery of expenditures is unlikely, the amount capitalised is written off in profit or loss in the period the new information becomes available. The recoverability of the carrying amount of exploration and evaluation assets depends on the availability of sufficient funding to bring the properties into commercial production, the price of the products to be recovered and the undertaking of profitable mining operations. As a result of these uncertainties, the actual amount recovered may vary significantly from the carrying amount.

 

(b)Assets held for sale

 

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held for sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use.

 

Such assets, or disposal groups, are generally measured at the lower of their carrying amount or fair value less costs to sell. Impairment losses on initial classification as held for sale or held for distribution and subsequent gains and losses on remeasurement are recognised in profit or loss.

 

Once classified as held for sale property, plant and equipment are no longer depreciated.

 

(c)Revenue

 

Revenue comprises the sale of bullion.

 

Revenue is measured based on the consideration specified in a contract with the customer. Revenue is recognised when bullion is transferred to the customer and the sales price is fixed. It is at this point that the customer obtains control of the bullion and recovery of the consideration is probable.

 

In accordance with the requirements of the Zimbabwe Government, all gold must be delivered to Fidelity Gold Refinery (Private) Limited (Fidelity), a subsidiary of the Reserve Bank of Zimbabwe), for initial in-country refining.

 

(i)Blanket

 

In accordance with the requirements of the Zimbabwe Government, 25% of the gold must be sold to Fidelity and 75% may be exported under the gold dealing licence held by Fidelity and proceeds of gold revenue are received 75% in USD and 25% in RTGS$.

 

(ii)Bilboes

 

Bilboes revenue during the year was recognised from sales to Fidelity as a “small-scale producer” measured at the previous day’s 6pm London Bullion Market Association price less a 5% discount. The revenue was received 100% in USD and settlement occurs immediately after the bullion is delivered.

 

 

 8 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

5Blanket Zimbabwe Indigenisation Transaction

 

On February 20, 2012 the Group announced it had signed a Memorandum of Understanding (“MoU”) with the Minister of Youth, Development, Indigenisation and Empowerment of the Zimbabwean Government pursuant to which the Group agreed that indigenous Zimbabweans would acquire an effective 51% ownership interest in the Zimbabwean company owning the Blanket Mine (also referred to herein as “Blanket” or “Blanket Mine” as the context requires) for a paid transactional value of $30.09 million. Pursuant to the above, members of the Group entered into agreements with each indigenous shareholder to transfer 51% of the Group’s ownership interest in Blanket Mine whereby it:

 

·sold a 16% interest to the National Indigenisation and Economic Empowerment Fund (“NIEEF”) for $11.74 million;
·sold a 15% interest to Fremiro Investments (Private) Limited (“Fremiro”), which is owned by indigenous Zimbabweans, for $11.01 million;
·sold a 10% interest to Blanket Employee Trust Services (Private) Limited (“BETS”) for the benefit of present and future managers and employees for $7.34 million. The shares in BETS are held by the Blanket Mine Employee Trust (“Employee Trust”) with Blanket Mine’s employees holding participation units in the Employee Trust; and
·donated a 10% ownership interest to the Gwanda Community Share Ownership Trust (“Community Trust”). In addition, Blanket Mine paid a non-refundable donation of $1 million to the Community Trust.

 

The Group facilitated the vendor funding of these transactions which is repaid by way of dividends from Blanket Mine. 80% of dividends declared by Blanket Mine are used to repay such loans and the remaining 20% unconditionally accrues to the respective indigenous shareholders. Following a modification to the interest rate on June 23, 2017, outstanding balances on these facilitation loans attract interest at a rate of the lower of a fixed 7.25% per annum payable quarterly or 80% of the Blanket Mine dividend in the quarter. The timing of the loan repayments depends on the future financial performance of Blanket Mine and the extent of future dividends declared by Blanket Mine. The Group related facilitation loans were transferred as dividends in specie intra-group and now the loans and most of the interest thereon is payable to the Company.

 

Accounting treatment

 

The directors of Caledonia Holdings Zimbabwe (Private) Limited (“CHZ”), a wholly-owned subsidiary of the Company, performed an assessment using the requirements of IFRS 10: Consolidated Financial Statements (IFRS 10). It was concluded that CHZ should consolidate Blanket Mine after the indigenisation. The subscription agreements with the indigenous shareholders have been accounted for accordingly as a transaction with non-controlling interests and as a share-based payment transaction.

 

The subscription agreements, concluded on February 20, 2012, were accounted for as follows:

 

·Non-controlling interests (“NCI”) were recognised on the portion of shareholding upon which dividends declared by Blanket Mine will accrue unconditionally to equity holders as follows:
(a)20% of the 16% shareholding of NIEEF;
(b)20% of the 15% shareholding of Fremiro; and
(c)100% of the 10% shareholding of the Community Trust.
·This effectively means that NCI was initially recognised at 16.2% of the net assets of Blanket Mine, until the completion of the transaction with Fremiro, whereby the NCI reduced to 13.2% (see below).

 

 

 9 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

5Blanket Zimbabwe Indigenisation Transaction (continued)

 

Accounting treatment (continued)

 

·The remaining 80% of the shareholding of NIEEF and Fremiro was recognised as NCI to the extent that their attributable share of the net asset value of Blanket Mine exceeds the balance on the facilitation loans, including interest.
·The transaction with BETS is accounted for in accordance with IAS 19 Employee Benefits (profit sharing arrangement) as the ownership of the shares does not ultimately pass to the employees. The employees are entitled to participate in 20% of the dividends accruing to the 10% shareholding in Blanket Mine if they are employed at the date of such distribution. To the extent that 80% of the attributable dividends exceeds the balance on the BETS facilitation loan, they will accrue to the employees at the date of such declaration.
·BETS is an entity effectively controlled and consolidated by Blanket Mine. Accordingly, the shares held by BETS are effectively treated as treasury shares in Blanket Mine and no NCI is recognised.

 

Fremiro purchase agreement

 

On November 5, 2018 the Company and Fremiro entered into a sale agreement for Caledonia to purchase Fremiro’s 15% shareholding in Blanket Mine. On January 20, 2020 all substantive conditions to the transaction were satisfied. The Company issued 727,266 shares to Fremiro for the cancellation of their facilitation loan and purchase of Fremiro’s 15% shareholding in Blanket Mine. The transaction was accounted for as a repurchase of a previously vested equity instrument. As a result, the Fremiro share of the NCI of $3,600 was derecognised, shares were issued at fair value, the share-based payment reserve was reduced by $2,247 and the Company’s shareholding in Blanket Mine increased to 64% on the effective date.

 

Blanket Mine’s indigenisation shareholding percentages and facilitation loan balances

 

       Effective
interest & NCI
   NCI subject
to facilitation
   Balance of facilitation loan # 
USD  Shareholding   recognised   loan   March 31, 2024   December 31, 2023 
NIEEF   16%   3.2%   12.8%   8,087    8,489 
Community Trust   10%   10.0%   0.0%        
BETS ~   10%   -*   -*   4,595    4,908 
    36%   13.2%   12.8%   12,682    13,397 

 

* The shares held by BETS are effectively treated as treasury shares (see above).

~ Accounted for under IAS19 Employee Benefits.

# Facilitation loans are accounted for as equity instruments and are accordingly not recognised as loans receivable.

 

The balance on the facilitation loans is reconciled as follows:

 

   2024   2023 
         
Balance at January 1   13,397    15,026 
Interest incurred   229    259 
Dividends used to repay loan   (944)   (1,888)
Balance at March 31   12,682    13,397 

 

 

 

 10 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

6Production costs

 

   2024   2023 
         
Blanket Mine   18,176    16,504 
Salaries and wages   7,113    6,184 
Consumable materials   6,319    5,569 
Electricity costs   3,196    2,934 
Safety   220    261 
Cash-settled share-based expense (note 10.1(a))   90    394 
On mine administration   823    625 
Security   305    239 
Solar operations and maintenance services   51    279 
Pre-feasibility exploration costs   59    19 
           
Bilboes   784    3,346 
Salaries and wages   281    849 
Consumable materials   169    1,862 
Electricity costs   105    338 
Cash-settled share-based expense (note 10.1(a))   9     
On mine administration   220    297 
           
    18,960    19,850 

 

7Net foreign exchange (loss) gain

 

On October 1, 2018 the RBZ issued a directive to Zimbabwean banks to separate foreign currency from RTGS$ in the accounts held by their clients and pegged the RTGS$ at 1:1 to the US Dollar. On February 20, 2019 the RBZ issued a further monetary policy statement, which allowed inter-bank trading between RTGS$ and foreign currency. The interbank rate was introduced at 2.5 RTGS$ to 1 US Dollar and traded at 22,055.47 RTGS$ to 1 US Dollar as at March 31, 2024 (December 31, 2023: 6,104.72 RTGS$).

 

On April 5, 2024 the Reserve Bank of Zimbabwe issued a Monetary Statement policy that introduced a structured currency (which is generally defined as a currency that is pegged to a specific exchange rate or currency basket and backed by a bundle of foreign exchange assets (potentially including gold). The structured currency called the ZiG replaced the RTGS$ from the said date. Banks were instructed to convert the RTGS$ balances into the new currency to foster simplicity, certainty, and predictability in monetary and financial affairs. The new currency will co-circulate with other foreign currencies in the economy. 75% of gold sales proceeds were received in US Dollar and the remainder in RTGS$ during the quarter. Post introduction of the ZiG, 75% of gold proceeds were received in US Dollar and the remainder in ZiG.

 

The US Dollar has remained the primary currency in which the Group’s Zimbabwean entities operate and the functional currency of these entities.

 

 

 11 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

7Net foreign exchange (loss) gain (continued)

 

The table below illustrates the effect the weakening of the RTGS$ and other foreign currencies had on the consolidated statement of profit or loss.

 

   2024   2023 
         
Net unrealised foreign exchange (loss) gain   (574)   1,749 
Taxation foreign exchange gains   1,297    1,694 
VAT receivable foreign exchange losses   (1,292)   (304)
Other unrealised foreign exchange (losses) gains   (579)   359 
           
Net realised foreign exchange loss   (3,565)   (216)
Bullion sales receivable foreign exchange losses   (1,293)   (301)
Cash and cash equivalents foreign exchange losses   (1,130)   (384)
VAT receivables foreign exchange losses   (364)   (66)
Trade and other payables foreign exchange (losses) gains   69    

1,217

 
Other realised foreign exchange losses   (847)   (682)
           
Net foreign exchange (loss) gain   (4,139)   1,533 

 

8Administrative expenses

 

   2024   2023 
         
Investor relations   135    163 
Audit fee   79    69 
Advisory services fees   244    3,427 
Listing fees   149    239 
Directors fees – Company   170    172 
Directors fees – Blanket   19    15 
Employee costs   1,205    1,380 
Other office administration cost   52    67 
Information technology and communication cost– Group related   83    29 
Management liability insurance   353    243 
Travel costs   122    134 
    2,611    5,938 

 

 

 12 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

9Derivative financial instruments

 

The fair value of derivative financial instruments not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where available. The company did not apply hedge accounting to the derivative financial instruments and all fair value losses were recorded in the consolidated statements of profit or loss and other comprehensive income. Transaction costs are recognised in profit or loss as incurred.

 

Derivative financial instrument expenses     2024   2023 
            
Put options  9.1(a)   302    434 
       302    434 

 

9.1Derivative financial assets

 

      2024   December 31,
2023
 
            
Put options  9.1(a)   26    88 
       26    88 

 

(a)Put options

 

From December 2022 to the date of approval of these financial statements the Company had the following put options to hedge our gold price risk:

 

Purchase date Ounces hedged Strike price Period of hedge
December 22, 2022 16,672 $1,750 December 2022 - May 2023
May 22, 2023 28,000 $1,900 June - December 2023
December 19, 2023 12,000 $1,950 January - March 2024
March 7, 2024 12,000 $2,050 April to June 2024
April 10, 2024 12,000 $2,100 July to September 2024

 

The put options were entered into to protect the Company against gold prices lower than the strike price over the period hedged. The options are “out-of-the-money" put options which lock in a minimum price over the number of ounces that are subject to the hedge for an initial option price. These arrangements carry no further financial obligations, such as margin calls.

 

All put options were classified as level 1 in the fair value hierarchy.

 

 13 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

10Share-based payments

 

10.1Cash-settled share-based payments

 

(a)Restricted Share Units and Performance Units

 

Certain management and employees within the Group are granted Restricted Share Units (“RSUs”) and Performance Units (”PUs”) pursuant to provisions of the 2015 Omnibus Equity Incentive Compensation Plan (“OEICP”). All RSUs and PUs were granted and approved at the discretion of the Compensation Committee of the Board of Directors.

 

RSUs vest three years after grant date given that the service conditions of the relevant employees have been fulfilled. The value of the vested RSUs is the number of RSUs vested multiplied by the fair market value of the Company’s shares, as specified by the OEICP, on the date of settlement.

 

PUs have a performance condition based on gold production and, in recent awards, average normalised controllable cost per ounce of gold and a performance period of one to three years. The number of PUs that vest will be the relevant portion of the PUs granted multiplied by the performance multiplier, which will reflect the actual performance in terms of the performance conditions compared to expectations on the date of the award.

 

RSU holders are entitled to receive dividends over the vesting period. Such dividends will be reinvested in additional RSUs at the then applicable share price. PUs have rights to dividends only after they have vested.

 

RSUs and PUs allow for settlement of the vesting date value in cash or, subject to conditions, shares issuable at fair market value or a combination of both at the discretion of the unitholder.

 

The fair value of the RSUs at the reporting date was based on the Black Scholes option valuation model less the fair value of the expected dividends during the vesting period multiplied by the performance multiplier expectation. The fair value of the PUs at the reporting date was based on the Black Scholes option valuation model. At the reporting date it was assumed that there is a 93%-100% probability that the performance conditions will be met and therefore a 93%-100% (2023: 93%-100%) average performance multiplier was used in calculating the estimated liability.

 

The liability as at March 31, 2024 amounted to $754 (December 31, 2023: $1,294). Included in the liability as at March 31, 2024 is an amount of $99 (2023: $394) that was expensed and classified as production costs; refer to note 6.

 

 

 14 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

10Share-based payments (continued)

 

10.1Cash-settled share-based payments (continued)

 

(a)Restricted Share Units and Performance Units (continued)

 

The cash-settled share-based expense for PUs for the period amounted to $53 (2023: $280). During the period PUs to the value of $79 were settled in share capital (net of employee tax) (2023: $351) with the employee tax portion recognised in profit or loss.

 

On April 8, 2024 167,935 PUs were granted to certain management and employees within the Group.

 

The following assumptions were used in estimating the fair value of the cash-settled share-based payment liability on:

 

   March 31, 2024   December 31, 2023 
   PUs   PUs 
Risk free rate   3.88%   3.88%
Fair value (USD)   11.07    12.20 
Share price (USD)   11.07    12.20 
Performance multiplier percentage   93-100%   93-100%
Volatility   0.76    0.90 
           

 

Share units granted:  PUs   PUs 
Grant - January 11, 2021   35,341    56,244 
Grant - May 14, 2021   482    964 
Grant - June 1, 2021   375    1,310 
Grant - June 14, 2021   199    398 
Grant - September 6, 2021   229    458 
Grant - September 20, 2021   230    460 
Grant - October 1, 2021   508    1,016 
Grant - October 11, 2021   225    450 
Grant - November 12, 2021   923    1,846 
Grant - December 1, 2021   225    900 
Grant - January 11, 2022   41,386    75,198 
Grant - January 12, 2022   556    825 
Grant - May 13, 2022   1,894    2,040 
Grant - June 1, 2022       1,297 
Grant - July 1, 2022   1,899    2,375 
Grant - October 1, 2022   1,800    2,024 
Grant - April 7, 2023   73,464    79,521 
Grant - May 15, 2023       581 
Grant - June 1, 2023   617    617 
Grant - June 7, 2023   572    572 
Grant - August 10, 2023   5,514    5,514 
Grant - September 1, 2023   1,617    1,617 
Grant - October 3, 2023   14,258    14,258 
Settlements/ terminations   (62,540)   (68,171)
Total awards outstanding   119,774    182,314 

 

 

 15 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

10Share-based payments (continued)

 

10.2Equity-settled share-based payments

 

(a)EPUs

 

PUs which are classified as equity-settled (i.e. there is no option to vest in cash) (“EPUs”) have a performance condition based on gold production, average normalised controllable cost per ounce of gold and a performance period of three years. The number of EPUs that vest will be the relevant portion of the EPUs granted multiplied by the performance multiplier, which will reflect the actual performance in terms of the performance conditions compared to expectations on the date of the award.

 

EPUs have rights to dividends only after they have vested.

 

The shares issued are subject to a minimum holding period of until at least the first anniversary of the EPUs vesting date.

 

The fair value of the EPUs at the reporting date was based on the Black Scholes option valuation model less the fair value of the expected dividends during the vesting period multiplied by the performance percentage. At the reporting date it was assumed that there is a 100% probability that the performance conditions will be met and therefore a 100% performance multiplier was used in calculating the expense. The equity-settled share-based expense for EPUs as at March 31, 2024 amounted to $201 (2023: $110).

 

The following assumptions were used in estimating the fair value of the equity-settled share-based payment that are in issue on:

 

Grant date   January 24, 2022    April 7, 2023 
Number of units - remaining at reporting date   113,693    80,773 
Share price (USD) - grant date   11.50    16.91 
Fair value (USD) - grant date   10.15    15.33 
Performance multiplier percentage at grant date   100%   100%

 

On April 8, 2024 125,433 EPUs were granted to certain management within the Group.

 

11Other expenses

 

   2024   2023 
         
Intermediated Money Transaction Tax*   254    382 
Community and social responsibility cost   346    258 
    600    640 

 

* Intermediated Money Transfer Tax ("IMTT”) is tax chargeable in Zimbabwe on transfer of physical money, electronically or by any other means, between two or more persons. IMTT is levied at a rate of 2% on RTGS transactions and 1% on foreign currency transactions.

 

 16 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

12Finance income and finance cost

 

   2024   2023 
         
Finance income received - Bank   6    5 
           
Unwinding of rehabilitation provision (note 21)   198    66 
Finance cost - Leases   3    6 
Finance cost - Overdraft and term loans   357    200 
Finance cost - Solar loan notes payable (note 22.1)   174    25 
Finance cost - Motapa loan notes payable       475 
    732    772 

 

 

 

 

 

 

 

 

 

 

 

 17 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

13Exploration and evaluation assets

 

   Bilboes Gold   Motapa   Maligreen   GG   Sabiwa   Abercorn   Valentine   Total 
                                 
Balance at January 1, 2023       7,844    5,626    3,723    294    27    65    17,579 
Acquisition costs:                                        
- Bilboes Gold   73,198                            73,198 
Decommissioning asset acquired       1,466    152                    1,618 
Exploration costs:                                        
- Consumables and drilling       903    102                    1,005 
- Contractor       2                        2 
- Labour       377    111                    488 
- Power           7                    7 
- Other   375                            375 
Balance at December 31, 2023   73,573    10,592    5,998    3,723    294    27    65    94,272 
Exploration costs:                                        
- Consumables and drilling       209    2                    211 
- Contractor           5                    5 
- Labour       115        51                166 
- Power                                
- Other   48                            48 
Balance at March 31, 2024   73,621    10,916    6,005    3,774    294    27    65    94,702 

 

 

 18 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

14Property, plant and equipment

 

Cost  Land
and Buildings
   Right of
use assets
   Mine
development,
infrastructure
and other
   Assets under
construction and
decommissioning
assets
   Plant and
equipment
   Furniture
and
fittings
   Motor
vehicles
  

Solar

Plant&

   Total 
                                     
Balance at January 1, 2023   15,194    525    82,154    46,453    70,485    1,563    3,314    14,138    233,826 
Additions*               28,276    538    335    294    163    29,606 
Impairments~           (872)       (36)               (908)
Disposals                   (33)               (33)
Reallocate to assets held for sale                               (14,301)   (14,301)
Reallocations between asset classes   1,492        37,116    (39,099)   491                 
Foreign exchange movement       (24)       (2)       (37)   (3)       (66)
Balance at December 31, 2023   16,686    501    118,398    35,628    71,445    1,861    3,605        248,124 
Additions*               3,612    (16)   2            3,598 
Reallocations between asset classes               131    (131)                
Foreign exchange movement       (5)       (1)       (10)   (1)       (17)
Balance at March 31, 2024   16,686    496    118,398    39,370    71,298    1,853    3,604        251,705 

 

* Included in additions is the change in estimate for the decommissioning asset of ($788) (2023: $1,962) due to change in the Life of Mine (“LoM”) estimate to 2041.
&

The solar plant was fully commissioned on February 2, 2023 and the sale agreement between Caledonia Mining Corporation Plc and Caledonia Mining Services (Private) Limited was concluded for the sale of the solar plant.  Depreciation on the solar plant commenced on February 2, 2023 and the power purchase agreement, between Caledonia Mining Services (Private) Limited and Blanket Mine, became effective. From September 28, 2023 the solar plant is classified as held for sale.

In December 2022, the Caledonia board approved a proposal for Caledonia Mining Services (Private) Limited (which owns the solar plant) to issue loan notes pursuant to a loan note instrument (“bonds”) up to a value of $12 million. The decision was taken in order to optimise the capital structure of the Group and provide additional debt instruments to the Zimbabwean financial market. Refer to note 22.1 for more information on these loan notes.

~ On June 27, 2023 the decision was taken to place the Bilboes oxide mine on care and maintenance as the cost related to removing the waste and accessing the orebody could exceed the benefit from the gold revenues to be received. The impairment loss that was recognised amounted to a carrying value of $851 on impairing the Bilboes oxide asset classified under mine development, infrastructure and other. Mining and metallurgical processing continued at the Bilboes oxide mine until the end of September 2023 when the contract miner's notice period came to an end.  Leaching of material that has already been deposited on the leach pad will continue while the revenue from these activities contributes to the cost of the asset. Oxide mining and processing will resume when the stripping of the waste for the sulphide project commences and can be economically justified.

 

 

 

 19 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

14Property, plant and equipment (continued)

 

Accumulated depreciation and
Impairment losses
  Land and
Buildings
   Right of
use assets
   Mine
development,
infrastructure
and other
   Assets under
construction and
decommissioning
assets
   Plant and
equipment
   Furniture
and
fittings
   Motor
vehicles
   Solar
Plant
   Total 
                                     
Balance at January 1, 2023   8,350    230    12,368    693    29,257    1,100    2,845        54,843 
Depreciation for the year   1,012    124    5,459    93    6,573    185    258    782    14,486 
Assets held for sale                               (782)   (782)
Accumulated depreciation impairments           (21)       (10)               (31)
Foreign exchange movement       (9)               (30)   (2)       (41)
Balance at December 31, 2023   9,362    345    17,806    786    35,820    1,255    3,101        68,475 
Depreciation for the period   279    31    1,480    23    1,901    43    62        3,819 
Foreign exchange movement       (4)               (8)   (1)       (13)
Balance at March 31, 2024   9,641    372    19,286    809    37,721    1,290    3,162        72,281 
                                              
Carrying amounts                                             
At December 31, 2023   7,324    156    100,592    34,842    35,625    606    504        179,649 
At March 31, 2024   7,045    124    99,112    38,561    33,577    563    442        179,424 

 

 

 20 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

15Inventories

 

   2024   December 31,
2023
 
         
Consumable stores*   19,206    18,001 
Gold in progress @   1,336    2,303 
    20,542    20,304 

 

 * Included in consumables stores is an amount of ($1,793) (December 31, 2023: ($1,793)) for provision for obsolete stock for items that are not compatible with plant and equipment currently in use.
 @ Gold work in progress balance as at March 31, 2024 consists of 1,656 ounces (December 31, 2023: 3,057 ounces).

 

16Trade and other receivables

 

   2024   December 31,
2023
 
         
Bullion sales receivable   3,879    5,403 
VAT receivables   3,152    4,259 
Deposits for stores, equipment and other receivables   527    290 
    7,558    9,952 

 

The carrying value of trade receivables is considered a reasonable approximation of fair value and are short term in nature. No provision for expected credit losses was recognised in the current or prior period as none of the debtors were past due and there has been no doubtful debt on debtors. Up to the date of approval of these financial statements all of the outstanding bullion sales receivable were settled in full. The Company allocated the VAT receivables equating to $0.74 million on March 25, 2024 against liabilities due for the March Quarterly Payment Dates (“QPD’s”) administrated by the Zimbabwe Revenue Authority.

 

17Prepayments

 

   2024   December 31,
2023
 
         
Caledonia Mining South Africa (Proprietary) Limited (“CMSA”) suppliers   269    527 
Blanket Mine third party suppliers   3,462    1,746 
Other prepayments   216    265 
    3,947    2,538 

 

 

 

 

 

 

 

 

 

 21 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

18Cash and cash equivalents

 

   2024   December 31,
2023
 
         
Bank balances   1,831    4,252 
Restricted cash *       2,456 
Cash and cash equivalents   1,831    6,708 
Bank overdrafts and short term loans used for cash management purposes   (15,991)   (17,740)
Net cash and cash equivalents   (14,160)   (11,032)

 

 * Cash of $2,456 (denominated in RTGS$) held by Blanket Mine was earmarked by Stanbic Bank Zimbabwe as a letter of credit in favour of CMSA. The letter of credit was issued by Stanbic Bank Zimbabwe on November 28, 2023 and settled in January, 2024. The cash on maturity was transferred to CMSA’s bank account, denominated in South African Rands.

 

  Date drawn Expiry Repayment
term
Principal
value

Balance drawn at

March 31, 2024

Overdraft facilities and term loans          
Stanbic Bank - RTGS$ denomination September 2023 June 2024 On demand RTGS$350 million $Nil million
Stanbic Bank - USD denomination September 2023 June 2024 On demand $4 million $3.9 Million
Ecobank - USD denomination November 2022 December 2024 On demand $5 million $5.1 million
Nedbank Zimbabwe - USD denomination April 2023 April 2025 On demand $7 million $5.0 million
CABS - USD denomination August 2023 July 2024 On demand $2 million $2 million
CABS - USD denomination March 2023 March 2027 On demand $3 million $Nil million

 

 

 22 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

19Assets and liabilities associated with assets held for sale

 

   2024   December 31,
2023
 
Non-current assets held for sale          
Solar plant   13,486    13,519 
           
Liabilities associated with assets held for sale          
Site restoration liability   96    128 

 

In the second quarter of 2023 management embarked on a marketing process to locate a buyer for the Company’s solar plant located next to Blanket Mine. Various offers were received and a counterparty with a non-binding offer was given exclusivity to further negotiate the sale of the plant after proving their ability to operate and fund solar plants of similar size and complexity. The offer was received from a reputable global renewable energy operator and management is in an advanced stage of executing agreements to sell the solar plant. It is proposed that the new owners will exclusively supply Blanket with electricity from the plant, on a take-or-pay basis and in doing so secure Blanket’s future power supply. This has the benefit of realising a cash profit on the sale of the plant and generate cash for reinvestment in our gold projects. In addition, management can focus on Caledonia’s core business of gold mining.

 

On September 28, 2023 the Board approved management to negotiate the sale of the solar plant with the potential buyer. The assets were available for sale in their condition on September 28, 2023 and therefore met the criteria to be classified as held for sale.

 

Management determined the value of the carrying amount as the lower of the fair value less cost to sell and the carrying amount. The proceeds of the disposal are expected to substantially exceed the carrying amount of the related net assets and accordingly no impairment losses have been recognised on the classification of the solar plant. The asset was classified as property, plant and equipment before the reclassification to assets held for sale.

 

The change in estimate for the liability held for sale is due to the Blanket Mine’s LoM that was extended to 2041 (that is inclusive of inferred resources and is based on an internal estimate representing management’s best estimate of the LoM inclusive of the latest drilling results).

 

 

 

 23 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

20Share capital

 

Authorised

 

Unlimited number of ordinary shares of no par value.

Unlimited number of preference shares of no par value.

 

Issued ordinary shares

 

   Number of
fully paid
shares
   Amount 
         
January 1, 2023   12,833,126    83,471 
Shares issued:          
- share-based payment - employees (note 10.1(a))   24,389    351 
- equity raise*   1,207,514    15,569 
- Bilboes Gold Limited acquisition   5,123,044    65,677 
December 31, 2023   19,188,073    165,068 
Shares issued:          
- share-based payment - employees (note 10.1(a))   6,452    79 
March 31, 2024   19,194,525    165,147 

 

*

Gross proceeds of $10,770 with a transaction cost of $846 were raised by issuing depository interests on the AIM of the London Stock Exchange

Gross proceeds of $5,850 with a transaction cost of $205 were raised by issuing depository receipts on the VFEX.

 

During quarter one of 2023, Mark Learmonth, Chief Executive Officer, and Toziyana Resources Limited, a company affiliated with Victor Gapare, executive Director of the Company, subscribed for 3,587 and 11,000 depositary interests respectively in the equity raise.

 

21Provisions

 

Site restoration

 

Site restoration relates to the estimated cost of closing down the mines and projects and represent the site and environmental restoration costs, estimated to be paid as a result of mining activities or previous mining activities. For the Blanket Mine site restoration costs are capitalised in property, plant and equipment with an increase in the provision at the net present value of the estimated future and inflated cost of site rehabilitation. Subsequently the capitalised cost is amortised over the life of the mine and the provision is unwound over the period to estimated restoration. For properties in the exploration and evaluation phase, such as the Bilboes, Maligreen and Motapa projects, site restoration costs are capitalised in exploration and evaluation assets with an increase in the provision at the undiscounted value of the estimated cost of site rehabilitation. Subsequently the costs capitalised are not amortised and the provision is not unwound.

 

 

 24 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

21Provisions (continued)

 

Reconciliation of site restoration provision  March 31,
2024
   December 31,
2023
 
         
Blanket Mine          
Balance January 1   4,766    2,823 
Unwinding of discount (note 13)   198    109 
Change in estimate (Blanket) (note 14)*   (788)   1,834 
Balance   4,176    4,766 
           
Motapa, Maligreen and Bilboes          
Balance January 1   6,219    135 
Change in estimate (Motapa) (note 13)       1,466 
Change in estimate (Maligreen) (note 13)       152 
Acquisition - (Bilboes)       4,466 
Balance   6,219    6,219 
           
Total balance   10,395    10,985 
           
Current        
Non-current   10,395    10,985 
    10,395    10,985 

 

 * The change in estimate is due the Blanket Mine’s LoM that was extended to 2041 (that is inclusive of inferred resources and it based on an internal estimate representing management’s best estimate of the LoM inclusive of the latest drilling results).

 

The discount rate in calculating the present value of the Blanket Mine provision is 4.45% (2023: 4.14%) and is based on a risk-free rate and cash flows are estimated at an average 2.37% inflation (2023: 2.40%). The gross rehabilitation costs, before discounting, amounted to $5,950 (2023: $5,629) for Blanket Mine as at March 31, 2024.

 

The undiscounted gross rehabilitation costs for exploration and evaluation assets as March 31, 2024, amounted to $4,466 (2023: $4,466) for Bilboes Holdings, $1,466 (2023: $1,466) for Motapa and $287 (2023: $287) for Maligreen.

 

22Loan note instruments

 

 

Loan note instruments - finance costs     2024   2023 
            
Solar loan notes  22.1   174    25 
Motapa loan notes          475 
       174    500 

 

 

 

 

 25 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

22Loan note instruments (continued)

 

Loan note instruments - financial liabilities     2024   December 31,
2023
 
            
Solar loan notes  22.1   7,070    7,112 
Motapa loan notes           
       7,070    7,112 
              
Current      665    665 
Non-current      6,405    6,447 
       7,070    7,112 

 

22.1Solar loan notes

 

Following the commissioning of Caledonia’s wholly owned solar plant on February 2, 2023, the decision was taken to optimise the capital structure of the Group and provide additional debt instruments to the Zimbabwean financial market by way of issuing loan notes pursuant to a loan note instrument (“bonds”). The bonds were issued by the Zimbabwean registered entity owning the solar plant, Caledonia Mining Services (Private) Limited. The bonds carry a fixed interest rate of 9.5% payable bi-annually and have a tenure of 3 years from the date of issue. The bond repayments are guaranteed by the Company. $7 million of bonds were in issue at the date of approval of these financial statements. All bonds were issued to Zimbabwean registered commercial entities. Subsequently these bonds were transferred to Caledonia Holdings Zimbabwe (Private) Limited (“CHZ”) a subsidiary of the Company.

 

A summary of the bonds is as follows:

 

   2024   December 31,
2023
 
Opening balance   7,112     
Amounts received       7,000 
Transaction costs       (105)
Finance cost accrued   174    549 
Repayment - finance cost paid   (216)   (332)
Closing balance   7,070    7,112 
           
Current   665    665 
Non-current   6,405    6,447 
    7,070    7,112 

 

In April 2024, CHZ issued loan notes at the same interest rate, to the value of $2 million to Zimbabwean registered commercial entities. The bonds were issued to optimise the capital structure of the Group and provide additional debt instruments to the Zimbabwean financial market. The bonds have an interest rate of 9.5% payable bi-annually and have a tenor of 3 years from the date of issue. The bond repayments are guaranteed by the Company.

 

 

 26 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

23Trade and other payables

 

   2024   December 31, 2023 
         
Trade payables   5,246    6,166 
Electricity accrual   2,864    2,676 
Audit fee   401    395 
Dividends due   4,481    1,048 
Other payables   1,271    692 
Financial liabilities   14,263    10,977 
           
Production and management bonus accrual - Blanket Mine   89    214 
Other employee benefits - other   1,209    3,817 
Leave pay   2,968    2,655 
Bonus provision   70    190 
Accruals   2,243    2,650 
Non-financial liabilities   6,579    9,526 
Total   20,842    20,503 

 

24Cash flow information

 

Non-cash items and information presented separately on the statements of cash flows statement:

 

   2024   2023 
         
Operating profit   6,073    (1)
Adjustments for:          
Unrealised foreign exchange gains (note 7)   574    (1,749)
Fair value loss on derivative instruments (note 9)   302    434 
Cash-settled share-based expense (note 10.1)   53    280 
Cash-settled share-based expense included in production costs (note 10.1)   99    394 
Cash portion of cash-settled share-based expense   (613)   (1,672)
Equity-settled share-based expense (note 10.2)   201    110 
Depreciation (note 14)   3,819    2,255 
Cash generated from operations before working capital changes   10,508    51 
Inventories   (272)   (71)
Prepayments   (1,640)   738 
Trade and other receivables   1,157    (59)
Trade and other payables   (3,218)   5 
Cash generated from operations   6,535    664 

 

 

 27 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

25Operating Segments

 

The Group's operating segments have been identified based on geographic areas. The strategic business units are managed separately because they require different technology and marketing strategies. For each of the strategic business units, the Group’s CEO reviews internal management reports on at least a quarterly basis. Blanket Mine, Bilboes oxide mine, exploration and evaluation assets (“E&E projects”) and South Africa describe the Group's reportable segments. The Blanket operating segment comprises Caledonia Holdings Zimbabwe (Private) Limited, Blanket Mine (1983) (Private) Limited, Blanket’s satellite projects and Caledonia Mining Services (Private) Limited (“CMS”). The Bilboes oxide mine segment comprises the oxide mining activities. The E&E projects segment includes the exploration and evaluation activities of the Bilboes sulphide project as well as the Motapa and Maligreen projects. The South African segment represents the sales made by Caledonia Mining South Africa Proprietary Limited to the Blanket Mine. The holding company (Caledonia Mining Corporation Plc) and Greenstone Management Services Holdings Limited (a UK company) are responsible for corporate administrative functions within the Group and contribute to the strategic decision making process of the CEO and are therefore included in the disclosure below and combined with corporate and other reconciling amounts that do not represent a separate segment. Information regarding the results of each reportable segment is included below. Performance is measured based on profit before income tax, as included in the internal management report that is reviewed by the Group's CEO. Segment profit or exploration and evaluation cost is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. The accounting policies of the reportable segments are the same as the Group’s accounting policies.

 

Information about reportable segments

 

For the three months ended March 31, 2024  Blanket   South
Africa
   Bilboes
oxide
mine
   E&E
projects
   Inter-group
eliminations
adjustments
   Corporate
and other
reconciling
amounts
   Total 
                             
Revenue   37,695        833                38,528 
Inter-segmental revenue       3,788            (3,788)        
Royalty   (1,892)       (42)               (1,934)
Production costs   (18,501)   (3,308)   (784)       3,633        (18,960)
Depreciation   (4,007)   (33)           232    (11)   (3,819)
Net foreign exchange (loss) gain   (4,243)   (36)   (60)       (5)   205    (4,139)
Administrative expenses   (51)   (513)   (1)   (2)   2    (2,046)   (2,611)
Net derivative financial instrument expense                       (302)   (302)
Equity-settled share-based expense                       (201)   (201)
Cash-settled share-based expense                       (53)   (53)
Other expenses   (593)       (7)               (600)
Other income   65    1            (2)   100    164 
Management fee   (682)   682                     
Finance income       159            (683)   530    6 
Finance cost   (893)   (2)   (89)   (21)   683    (410)   (732)
Profit (loss) before tax   6,898    738    (150)   (23)   72    (2,188)   5,347 
Tax expense   (2,306)   (224)                   (2,530)
Profit (loss) after tax   4,592    514    (150)   (23)   72    (2,188)   2,817 

 

 28 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

25Operating Segments (continued)

 

Information about reportable segments (continued)

 

As at March 31, 2024  Blanket   South
Africa
   Bilboes
oxide
mine
   E&E
projects
   Inter-group
eliminations
adjustments
   Corporate
and other
reconciling
amounts
   Total 
Segment assets:                                   
Non-Current (excluding intercompany)   188,112    794        93,367    (5,212)   (2,754)   274,307 
Current (excluding intercompany, including Assets held for sale)   45,574    2,054        666    (1,662)   838    47,470 
Expenditure on evaluation and exploration assets (note 13)               430            430 
Expenditure on property, plant and equipment (note 14)   3,641    108            (151)       3,598 
Assets held for sale (note 19)   13,486                        13,486 
Intercompany balances   47,378    16,893    (90)       (149,135)   84,954     
                                    
Segment liabilities:                                   
Non-current (excluding intercompany)   (16,212)           (5,932)   4    (471)   (22,611)
Current (excluding intercompany)   (30,207)   (1,857)       (2,030)       (4,056)   (38,150)
Intercompany balances   (21,275)   (35,458)       (6,342)   149,135    (86,060)    

 

For the three months ended March 31, 2023  Blanket   South
Africa
   Bilboes
oxide
mine
   E&E
projects
   Inter-group
eliminations
adjustments
   Corporate
and other
reconciling
amounts
   Total 
                             
Revenue   29,263        172                29,435 
Inter-segmental revenue       2,109            (2,109)        
Royalty   (1,471)       (9)               (1,480)
Production costs   (16,079)   (2,111)   (3,346)       1,686        (19,850)
Depreciation   (2,794)   (36)           585    (10)   (2,255)
Net foreign exchange gain (loss)   859    (65)   (4)       354    389    1,533 
Administrative expenses   (39)   (676)   (216)           (5,007)   (5,938)
Net derivative financial instrument expense                       (434)   (434)
Equity-settled share-based expense                       (110)   (110)
Cash-settled share-based expense                   394    (674)   (280)
Other expenses   (638)       (2)               (640)
Other income   5    13                    18 
Management fee   (560)   560                     
Finance income       122            (983)   866    5 
Finance cost   (518)   (5)   (1)       983    (1,231)   (772)
Profit (loss) before tax   8,028    (89)   (3,406)       910    (6,211)   (768)
Tax expense   (2,992)   (73)           (137)   (300)   (3,502)
Profit (loss) after tax   5,036    (162)   (3,406)       773    (6,511)   (4,270)

 

 

 

 29 

Caledonia Mining Corporation Plc

Notes to the Condensed Consolidated Interim Financial Statements

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise)

 

25Operating Segments (continued)

 

Information about reportable segments (continued)

 

As at March 31, 2023  Blanket   South
Africa
   Bilboes
oxide
mine
   E&E
projects
   Inter-group
eliminations
adjustments
   Corporate
and other
reconciling
amounts
   Total 
Segment assets:                                   
Non-Current (excluding intercompany)   181,191    713    872    85,020    (6,685)   7,958    269,069 
Current (excluding intercompany)   32,620    2,012        3,081    (11)   13,197    50,899 
Expenditure on evaluation and exploration assets (note 13)               71,550            71,550 
Expenditure on property, plant and equipment (note 14)   16,346    27            (1,824)   (11,438)   3,111 
Intercompany balances   43,984    13,135            (139,737)   82,618     
                                    
Segment liabilities:                                   
Current (excluding intercompany)   (30,079)   (2,234)       (2,879)       (12,030)   (47,222)
Non-current (excluding intercompany)   (11,902)   (69)       (730)   (37)   (458)   (13,196)
Intercompany balances   (22,930)   (34,673)       (6,296)   139,737    (75,838)    

 

Major customer

 

Revenues received from Fidelity amounted to $7,012 (2023: $29,435) for the three months ended March 31, 2024.

 

The Group has made $31,516 (2023: $Nil) of sales to AEG up to March 31, 2024, representing 14,687 ounces (2023: Nil ounces). Management believes this new sales mechanism reduces the risk associated with selling and receiving payment from a single refining source in Zimbabwe. It may allow for the Company to raise debt funding secured against offshore gold sales.

 

The Bullion trade receivables outstanding have been paid in full, after the year end.

 

26Subsequent events

 

There were no significant subsequent events between March 31, 2024 and the date of issue of these financial statements other than included in the preceding notes to the condensed consolidated interim financial statements.

 

27Going concern

 

The directors have, at the time of approving these consolidated financial statements, a reasonable expectation that Caledonia has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing these consolidated financial statements.

 

 30 

Caledonia Mining Corporation Plc

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise) 

Additional information

 

DIRECTORS AND OFFICERS at May 13, 2024

 

BOARD OF DIRECTORS OFFICERS
J. L. Kelly (2) (3) (5) (7) M. Learmonth (4) (5) (6) (7)
Non-executive Director Chief Executive Officer
Connecticut, United States of America Jersey, Channel Islands
   
J. Holtzhausen (1) (2) (3) (4) (5) C.O. Goodburn (5) (6)
Chairman Audit Committee Chief Financial Officer
Non-executive Director Johannesburg, South Africa
Cape Town, South Africa  
  A. Chester (6) (7)
M. Learmonth (4) (5) (6) (7) General Counsel, Company Secretary and Head of
Chief Executive Officer Risk and Compliance
Jersey, Channel Islands Jersey, Channel Islands
   
N. Clarke (3) (4) (5) (7) J. Mufara (4) (5) (6)
Non-executive Director Chief Operating Officer
East Molesey, United Kingdom Johannesburg, South Africa
   
G. Wildschutt (1) (3) (5) (7) BOARD COMMITTEES
Non-executive Director (1)  Audit Committee
Johannesburg, South Africa (2)  Compensation Committee
  (3) Nomination and Corporate Governance Committee

G. Wylie (1) (2) (3) (4) (5)

(4)  Technical Committee

Non-executive Director (5)  Strategic Planning Committee
Malta, Europe (6)  Disclosure Committee
  (7)  ESG Committee
V. Gapare (4) (5) (7)  
Executive Director  
Harare, Zimbabwe  
   
T. Gadzikwa (1) (2) (3) (5)  
Non-executive Director  
Johannesburg, South Africa  

 

 31 

Caledonia Mining Corporation Plc

For the period ended March 31, 2024 and 2023

(in thousands of United States Dollars, unless indicated otherwise) 

Additional information

 

CORPORATE DIRECTORY as at May 13, 2024

 

CORPORATE OFFICES    
Jersey    
Head and Registered Office    
Caledonia Mining Corporation Plc    
B006 Millais House    
Castle Quay    
St Helier    
Jersey JE2 3NF    
     
South Africa    
Caledonia Mining South Africa Proprietary Limited    
No. 1 Quadrum Office Park    
Constantia Boulevard    
Floracliffe    
South Africa    
     
Zimbabwe    
Caledonia Holdings Zimbabwe (Private) Limited    
P.O. Box CY1277    
Causeway, Harare    
Zimbabwe    
     
Capitalisation (May 13, 2024)    
Authorised:   Unlimited
Shares, Warrants and Options Issued:    
Shares:   19,194,860
Options:   20,000
     
SHARE TRADING SYMBOLS    
NYSE American - Symbol “CMCL”    
AIM - Symbol “CMCL”    
VFEX - Symbol “CMCL”    
     
BANKER    
Barclays    
Level 11    
1 Churchill Place    
Canary Wharf    
London E14 5HP    
     
NOMINATED ADVISOR    
Cavendish Securities PLC    
One Bartholomew Close    
London EC1A 7BL    
United Kingdom    
Tel: +44 20 7220 0500    
     
MEDIA AND INVESTOR RELATIONS    
Capital Market Communication Ltd (Camarco)    
40 Strand    
London WC2N 5RW    
United Kingdom    

Tel: +44 20 7138 3204

   
SOLICITORS
Mourant Ozannes (Jersey)
22 Grenville Street
St Helier
Jersey
Channel Islands
 
Borden Ladner Gervais LLP (Canada)
Suite 4100, Scotia Plaza
40 King Street West
Toronto, Ontario M5H 3Y4
Canada
 
Memery Crystal LLP (United Kingdom)
165 Fleet Street
London EC4A 2DY
United Kingdom
 
Dorsey & Whitney LLP (US)
TD Canada Trust Tower
Brookfield Place
161 Bay Street
Suite 4310
Toronto, Ontario
M5J 2S1
Canada
 
Gill, Godlonton and Gerrans (Zimbabwe)
Beverley Court
100 Nelson Mandela Avenue
Harare, Zimbabwe
 
Bowman Gilfillan Inc (South Africa)
11 Alice Lane
Sandton
Johannesburg
2196
 
AUDITOR
BDO South Africa Incorporated
Wanderers Office Park
52 Corlett Drive
Illovo 2196
South Africa
Tel: +27(0)10 590 7200
 
REGISTRAR AND TRANSFER AGENT
Computershare
150 Royall Street,
Canton,
Massachusetts, 02021
Tel: +1 800 736 3001 or +1 781 575 3100 

 

 

32

 

 

Exhibit 99.2

 

 

CALEDONIA MINING CORPORATION PLC  May 13, 2024

 

Management’s Discussion and Analysis

 

This management’s discussion and analysis (“MD&A”) of the consolidated operating results and financial position of Caledonia Mining Corporation Plc (“Caledonia” or the “Company”) is for the quarter ended March 31, 2024 (“Q1 2024” or the “Quarter”). It should be read in conjunction with the Unaudited Consolidated Interim Financial Statements of Caledonia for the Quarter (the “Interim Financial Statements”) which are available from the System for Electronic Data Analysis and Retrieval at www.sedar.com or from Caledonia’s website at www.caledoniamining.com. The Interim Financial Statements and related notes have been prepared in accordance with IFRS Accounting Standards, as issued by the International Accounting Standards Board (“IFRS”). In this MD&A, the terms “Caledonia”, the “Company”, the “Group”, “we”, “our” and “us” refer to the consolidated operations of Caledonia Mining Corporation Plc and its subsidiaries unless otherwise specifically noted or the context requires otherwise.

 

Note that all currency references in this document are in US Dollars (also “$”, “US$” or “USD”), unless stated otherwise.

 

 

 

 

 

 1 

 

 

 

Table of Contents  
1. OVERVIEW 3
2. SUMMARY 3
3. SUMMARY FINANCIAL RESULTS 7
4. OPERATIONS 15
  4.1 Safety, Health and Environment 15
    4.1.1 Blanket 15
    4.1.2 Bilboes oxide mine 15
  4.2 Social Investment and Contribution to the Zimbabwean Economy – Blanket 16
  4.3 Gold Production – Blanket 17
  4.4 Underground – Blanket 18
  4.5 Metallurgical Plant 18
  4.6 Costs 18
  4.7 Capital Projects – Blanket 21
  4.8 Indigenisation 22
  4.9 Bilboes 23
  4.10 Zimbabwe Commercial Environment 24
  4.11 Solar project 27
  4.12 Opportunities and Outlook 28
5. EXPLORATION 29
6. INVESTING 30
7. FINANCING 30
8. LIQUIDITY AND CAPITAL RESOURCES 31
9. OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL COMMITMENTS AND CONTINGENCIES 32
10. NON-IFRS MEASURES 32
11. RELATED PARTY TRANSACTIONS 36
12. CRITICAL ACCOUNTING ESTIMATES 36
13. FINANCIAL INSTRUMENTS 39
14. DIVIDEND HISTORY 40
15. MANAGEMENT AND BOARD 40
16. SECURITIES OUTSTANDING 40
17. RISK ANALYSIS 41
18. FORWARD LOOKING STATEMENTS 43
19. CONTROLS 44
20. QUALIFIED PERSON 45

 

 

 2 

 

1.OVERVIEW

 

Caledonia is a Zimbabwean focussed exploration, development, and mining corporation. Caledonia owns a 64% stake in the gold-producing Blanket mine (“Blanket”), and 100% stakes in the Bilboes oxide mine, the Bilboes sulphide project (together with the Bilboes oxide mine “Bilboes”), the Motapa and Maligreen gold mining claims, all situated in Zimbabwe. Caledonia’s shares are listed on the NYSE American LLC (“NYSE American”), depositary interests in Caledonia’s shares are admitted to trading on AIM of the London Stock Exchange plc and depositary receipts in Caledonia’s shares are listed on the Victoria Falls Stock Exchange (“VFEX”) (all under the symbols “CMCL”).

 

2.SUMMARY

 

  Q1 Comment
2024 2023
Gold produced (oz) 17,476 16,141

Gold produced in the Quarter was 8.3% higher than the first quarter of 2023 (the “comparative” or “comparable quarter” or “Q1 2023”)

17,050 ounces of gold was produced at Blanket in the Quarter, a 6% increase from the comparable quarter due to higher tonnage and grade and improved gold recovery.

 

426 ounces of gold were produced from the Bilboes oxide mine in the Quarter (Q1 2023: 105 ounces). Although the mine was placed on care and maintenance at the end of September 2023,leaching of the heap leach pads continues for as long as it makes a cash contribution.

Blanket On-mine cost per ounce ($/oz)1 993 991

On-mine cost per ounce at Blanket in the Quarter was virtually unchanged from the comparable quarter.

 

All-in sustaining cost (“AISC”) per ounce 1 1,296 1,412 The AISC per ounce in the Quarter decreased by 8.2% compared to the comparative quarter, predominantly due to the lower production costs incurred at Bilboes after it was placed on care and maintenance and the non-recurrence of advisory costs for the Bilboes acquisition in 2023. AISC includes the benefit of the solar plant electricity saving ($51 per ounce for the Quarter).
Average gold price ($/oz)1 2,040 1,863 The average gold price reflects international spot prices.
Gross profit2  ($’000) 13,815 5,850

Gross profit for the Quarter increased from the comparable quarter, due to higher gold revenue and lower production costs.

Increased depreciation costs were incurred as a result of a shortening of the useful life of certain property, plant and equipment items in 2023.

 

 

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  Q1 Comment
2024 2023
Net profit (loss) attributable to shareholders ($’000) 2,131 (5,030) Net profit for the Quarter increased due to higher gross profits and lower administrative expenses compared to the comparable quarter, partly offset by foreign exchange losses versus foreign exchange gains in the comparable quarter.
Basic IFRS earnings (loss) per share (“EPS”) (cents) 10.6 (30.3) Basic IFRS EPS reflects the increase in IFRS profit attributable to shareholders from the EPS loss in the comparable quarter.
Adjusted EPS (cents)1 26.9 (29.1) Adjusted EPS excludes, inter alia, net foreign exchange gains and losses, deferred tax and fair value movements on derivative financial instruments.
Net cash from operating activities ($’000) 4,887 (876) The higher operating profit increased the net cash from operating activities in the Quarter, partly offset by $4.1 million of short-term working capital movements at the end of the Quarter.    

Net cash and cash equivalents ($’000):

-        Beginning of the period Jan 1

-        End of the period March 31

 

(11,032)

(14,160)

 

Net cash decreased by $4.1 million due to short-term working capital movements at the end of the Quarter. Working capital movements are expected to normalise in future quarters.

 

1 Non-IFRS measures such as “On-mine cost per ounce”, “AISC”, “average gold price” and “adjusted EPS” are used throughout this document. Refer to section 10 of this MD&A for a discussion of non-IFRS measures.

2 Gross profit is after deducting royalties, production costs and depreciation but before administrative expenses, other income, interest and finance charges and taxation.

 

 4 

 

Production at Blanket

 

Quarterly gold production at Blanket was 17,050 ounces, a 6% increase from the comparative quarter. The increase was due to higher tonnes milled, an improved grade and improved metallurgical recoveries. Production in the Quarter was in-line with internal forecasts.

 

Blanket sold 18,450 ounces in the Quarter. This represented a 18% increase from comparable quarter, when 15,692 ounces were sold. The ounces sold in Q1 2024 include 3,057 ounces of gold work in progress classified as inventory at the end of 2023 (Q1 2024: 1,657 ounces)The increased production was derived from 8 fewer production days compared to the comparable quarter due to the cut-off date for gold deliveries being March 21, 2024, due to the logistical issues relating to the refining and shipping of gold over the Easter period.

 

7,956 ounces of gold were produced in April 2024, which was 2,762 ounces higher than April 2023.

 

Production and cost guidance for the year ending December 31, 2024 remains between 74,000 and 78,000 ounces and cost guidance is maintained at an an on-mine cost per ounce of between $870 and $970 and all-in sustaining cost of between $1,370 and $1,470 per ounce.

 

Bilboes Feasibility Study

 

Work to refresh the existing feasibility study for the large-scale sulphide project at Bilboes is well-advanced. Management is considering alternative development paths for Bilboes, with a view to optimising capital allocation and maximising the uplift in value for Caledonia shareholders. The preliminary results of the work done to date are expected to be published during the second quarter of 2024. Thereafter, the work on the selected development route will be upgraded to a feasibility study which process will take place in parallel with a process to secure debt finance for the project. .

 

Devaluation of the Zimbabwean dollar (RTGS$) and introduction of the Zimbabwean gold (“ZiG”) currency

 

During the Quarter, the RTGS$ devalued from RTGS$ 6,104: US$1 on December 31, 2023 to RTGS$ 22,055: US$1 on March 31, 2024. The significant and accelerating rate of devaluation in the RTGS$ led the Reserve Bank of Zimbabwe (“RBZ”) to introduce a new currency which is referred to as the “ZiG” on April 5, 2024.

 

The ZiG is a structured currency which is pegged to a specific exchange rate or currency basket and backed by a bundle of foreign exchange assets, such as gold reserves. The ZiG replaced the RTGS$ with immediate effect and was introduced at a rate of ZiG13.56:US$1 on April 5, 2024. On the same date, all RTGS$ balances were translated from RTGS$ to ZiG using an exchange rate of ZiG1: RTGS$ 2,499 which was determined by the RBZ using a combination of the then prevailing interbank exchange rate of US$1: RTGS$ 30,674 and gold price of US$2,299/oz. The ZiG will co-circulate with other foreign currencies in the economy. The retention threshold on gold receipts remained unchanged: gold producers will continue to receive 75% of their revenues in US dollars and the balance in local currency i.e.the ZiG.

 

The significant devaluation of the RTGS$ in the Quarter resulted in foreign exchange losses of $4.1 million which was predominantly incurred on the RTGS$-denominated receivables for gold sales and VAT refunds which reduced in value in US dollar terms between the date on which the receivable was recognised and the date on which the receivable was settled.

 

At the same time as the introduction of the ZiG, the Zimbabwe authorities announced a liberalisation of the foreign exchange market in Zimbabwe. Whereas previously the exchange rate for RTGS$ was determined by the RBZ, in future the exchange rate will be determined by a process of transparent price discovery in an interbank market.

 

In the first week after the introduction of the ZiG there were challenges by banking institutions failing to accomodate ZiG transactions. In recent weeks, prior to approval of this MDA, there was increased purchasing activities in ZiG by suppliers. The ZiG has remained relatively stable to the USD due to the stability of gold spot prices on the international market. The ZiG notes were rolled out with effect from April 30, 2024. We have seen no increase in US$ allocations on the newly established ZiG willing buyer willing seller foreign exchange market.

 

 

 5 

 

Proposed solar sale

 

Due to the unique operating environment in Zimbabwe and Caledonia’s significant in-country expertise, Caledonia opted to build the solar plant using its own resources rather than relying on an external party to build and own the solar plant by using its own financial resources and selling the resultant power to Blanket on a long-term contract. Accordingly, Caledonia constructed the solar plant at a cost of $14.2 million. As the solar plant is now fully commissioned and is working as planned, Caledonia no longer needs to own the solar plant, provided it retains long term access to the power it produces.

 

In the second quarter of 2023 management embarked on a process to sell the solar plant. Various offers were received, and a bidder has been given exclusivity to further negotiate the sale of the plant after proving their ability to operate and fund solar plants of similar size and complexity. In recent months the terms of the transaction have been revised to cater for the extension to Blanket's life of mine, based on internal estimates, and increased the terms of the power purchase agreement which in turn has implications for the overall transaction value. Management is at an advanced stage of finalising the contractual arrangements to sell the solar plant under which the new owners will exclusively supply Blanket with electricity from the plant, on a take-or-pay basis. This transaction is expected to realise a profit on Caledonia's investment in the plant, and release cash for reinvestment in Caledonia’s core business of gold mining that yields higher returns to our shareholders.

 

Changes to Board and Management

 

Mr. Dana Roets, stepped down as director and Chief Operations Officer on February 28, 2024 and Mr. James Mufara was appointed as Chief Operations Officer on May 1, 2024.

 

Mr. Steve Curtis, did not stand for re-election as Non-executive Director at the May 7, 2024 annual general meeting. Mr. Curtis remains a consultant to the Company.

 

Ms. Tariro Gadzikwa joined the board of directors as an independent non-executive director on March 15, 2024.

 

Strategy and Outlook: increased focus on growth opportunities

 

The immediate strategic focus is to:

 

·maintain production at Blanket at the targeted range of 74,000 - 78,000 ounces for 2024 and at a similar level for 2025;
·communicate the approach to the Bilboes sulphide project, commence financing process, complete the Caledonia feasibility study on the Bilboes sulphide project and commence development of the sulphide project; and
·continue with exploration activities at Motapa.

 

The strategy and outlook of Caledonia is further discussed in section 4.12 of this MD&A.

 

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3.SUMMARY FINANCIAL RESULTS

 

The table below sets out the consolidated profit or loss for the Quarter and the comparative period prepared under IFRS.

 

Condensed Consolidated Statements of profit or loss and Other comprehensive income (Unaudited)
($’000’s)          
    3 Months ended
March 31
 
    2024    2023 
Revenue   38,528    29,435 
Royalty   (1,934)   (1,480)
Production costs   (18,960)   (19,850)
Depreciation   (3,819)   (2,255)
Gross profit   13,815    5,850 
Net foreign exchange (loss) gain   (4,139)   1,533 
Administrative expenses   (2,611)   (5,938)
Net derivative financial instrument expenses   (302)   (434)
Equity-settled share-based expense   (201)   (110)
Cash-settled share-based expense   (53)   (280)
Other expenses   (600)   (640)
Other income   164    18 
Operating profit (loss)   6,073    (1)
Net finance costs   (726)   (767)
Profit (loss) before tax   5 347    (768)
Tax expense   (2,530)   (3,502)
Profit (loss) for the period   2,817    (4,270)
           
Other comprehensive income          
Items that are or may be reclassified to profit or loss          
Exchange differences on translation of foreign operations   (144)   (369)
Total comprehensive income (loss) for the period   2,673    (4,639)
           
Profit (loss) attributable to:          
Owners of the Company   2,131    (5,030)
Non-controlling interests   686    760 
Profit (loss) for the period   2,817    (4,270)
           
Total comprehensive income (loss) attributable to:          
Owners of the Company   1 987    (5,399)
Non-controlling interests   686    760 
Total comprehensive income (loss) for the period   2,673    (4,639)
           
Earnings (loss) per share (cents)          
Basic earnings (loss) per share   10.6    (30.3)
Diluted earnings (loss) per share   10.6    (30.2)
Adjusted earnings (loss) per share (cents)          
Basic   26.9    (29.1)
Dividends paid per share (cents)   14.0    14.0 

 

 

 7 

 

Revenue in the Quarter was 30.9% higher than the comparative quarter due to a 19.5% increase in the quantity of gold sold and a 9.3% increase in the average price of gold sold. Sales in the Quarter exclude 1,657 ounces of gold that was held as work-in-progress at March 31, 2024 and which were sold early in April 2024, and include 3,057 ounces of gold sold that were held as work-in-progress as at December 31, 2023.

 

The royalty rate payable to the Zimbabwe Government was unchanged at 5%.

 

Production costs comprise the costs of electricity, labour, administrative and other costs such as insurance, software licencing and security that are directly related to production.

 

Analysis of IFRS production costs between Blanket and Bilboes
   3 months ended
Mar 31
($’000)
 
   2024   2023 
Blanket   18,176    16,481 
Bilboes   784    3,369 
Total   18,960    19,850 
           
On mine cost per ounce ($/oz) (section 10)   1,012    1,196 
           

 

Total production costs (i.e. at Blanket and Bilboes) decreased by 4.5% in the Quarter compared to the comparative quarter. The reduction was due to the lower operating costs at Bilboes oxide mine offset by higher operating costs at Blanket. Bilboes oxide mine was put on care and maintenance with effect from end of September, 2023; however, leaching of the heap leach pads continues for as long as it makes a positive cash contribution to the care and maintenance cost. At Blanket, production cost increased by 10.1% in the Quarter compared to the comparative quarter.

 

Production costs, in conjunction with on-mine and all-in sustaining cost per ounce of gold sales are discussed in section 4.6; guidance for on-mine costs is included in Section 4.12.

 

The depreciation charge in the Quarter increased because of an increase in the depreciable cost base following the commissioning of the Central shaft and the solar plant. The shortening of the useful lives of certain plant and equipment items, late in 2023, also increased the depreciation charge for the Quarter compared to the comparable quarter. The useful life of the Jethro Shaft reduced due to increased focus on optimally utilising and centralising hoisting activities at the new Central Shaft in the future. Depreciation during the Quarter and the comparable quarter was calculated on a life of mine to 2041, based on an internal estimate taking into account inferred resources.

 

Net foreign exchange movements in the Quater relate to profits and losses arising on monetary assets and liabilities that are held in currencies other than the USD - principally the volatile RTGS$, but also, to a much lesser effect, the South African rand and the British pound. The net foreign exchange loss in the Quarter amounted to $4.1 million and the net losses were predominantly due to the significant devaluation of the RTGS$ exchange rate in 2024. Foreign exchange losses were predominantly incurred on the RTGS$-denominated bullion receivables for gold sales and VAT refunds which reduced in value in US dollar terms between the date on which the receivable was recognised and the date on which the receivable was settled. On April 5, 2024 the Zimbabwe authorities replaced the RTGS$ with a new currency called the “ZiG”, as discussed further in section 4.10.

 

Administrative expenses are detailed in note 8 to the Interim Financial Statements and include the costs of Caledonia’s offices and personnel in Harare, Johannesburg, Bulawayo, the UK and Jersey which provide the following functions: technical services, finance, procurement, investor relations, corporate development, legal and company secretarial.

 

 

 8 

 

 

Administrative expenses
   3 months ended
Mar 31
 
   ($ ’000’s) 
    2024    2023 
Investor relations   135    163 
Advisory services   -    90 
Listing fees   149    239 
Directors (Caledonia and Blanket)   189    187 
Wages and salaries   1,205    1 380 
Professional consulting fees   235    2,947 
Other   698    932 
Total   2,611    5,938 

 

Administrative expenses in the Quarter were 56.0% lower than the comparative quarter predominantly due to lower professional consulting fees which were high in the comparative quarter due to the fees payable on the conclusion of the acquisition of Bilboes Gold Limited in January 2023. Excluding the effect of the advisory fees in the comparable quarter, administrative expenses were aproximately 18% lower in the Quarter due to lower management bonuses.

 

Other expenses are detailed in note 11 to the Interim Financial Statements. During the Quarter, community and social responsibility cost amounted to $346,000 and is further explained in section 4.2. Other expenses include Intermediate Monetary Transaction Tax of $254,000 for the Quarter that is chargeable on the transfer of physical money, electronically or by any other means and ranges from 1% to 2% per transaction performed in Zimbabwe.

 

 

 9 

 

The tax expense comprised:

 

Analysis of consolidated tax expense for the Quarter
($’000’s)  Blanket   South
Africa
   UK   Bilboes
and CHZ
   Total 
Income tax   2,284    221    -    -    2,505 
Withholding tax                         
Management fee   -    33    -    -    33 
Deemed dividend   71    -    -    -    71 
CHZ dividends to GMS-UK   -    -    -    -    - 
Deferred tax   (49)   (30)   -    -    (79)
    2,306    224    -    -    2,530 

 

The overall effective taxation rate for the Quarter was 47.3% (2023: -456%). The effective tax rate bears little relationship to reported consolidated profit before tax. The effective tax rate is lower due to the following reasons:

 

·The rate of income tax in Jersey, the tax domicile of the parent company of the Group (i.e. the Company), is zero, which means there is no benefit to be realised by offsetting administrative expenses, derivatives, and share-based payment awards incurred.

 

·Zimbabwean taxable income is calculated in both RTGS$ and USD, whereas the group reports in USD. Large devaluations in the RTGS$ against the USD result in substantial foreign exchange movements on the RTGS$ tax payable which have a significant effect on the income tax calculation.

 

The effective taxation rate for Blanket was 30% (2023: 33%). Deferred tax predominantly comprises the difference between the accounting and tax treatments of capital investment expenditure. Deferred tax liabilities, denominated in RTGS$ (ZiG post April 5, 2024), devalued significantly during the Quarter with limited value remaining. Most of the tax expense comprised income tax and deferred tax incurred in Zimbabwe.

 

South African income tax that arises on intercompany profits arising at Caledonia Mining South Africa Proprietary Limited (“CMSA”) amounted to $213,000 during the Quarter.

 

Zimbabwe withholding tax arose on the dividends paid from Caledonia Holdings Zimbabwe (Private) Limited (“CHZ”) to the Company’s subsidiary in the UK Greenstone Management Services Holdings Limited (“GMS-UK”).

 

Basic IFRS EPS for the Quarter improved from a loss of 30.3 cents in the comparative quarter to a profit of 10.6 cents in the Quarter. Adjusted EPS for the Quarter excludes inter alia the effect of foreign net exchange movements and deferred tax. Adjusted EPS improved to 26.9 cents from a loss of 29.1 cents in the comparative quarter. A reconciliation from Basic IFRS EPS to adjusted EPS is set out in section 10.3.

 

A quarterly dividend of 14 cents per share was paid on January 26, 2024 and again on April 26, 2024. Caledonia’s dividends are discussed further in section 14.

 

Risks that may affect Caledonia’s future financial condition are discussed in section 17.

 

 

 10 

 

The table below sets out the consolidated statements of cash flows for the Quarter and the comparative quarter prepared under IFRS.

 

Condensed Consolidated Statements of Cash Flows    
($’000’s)        
   3 months ended Mar 31 
   2024   2023 
         
Cash inflow from operations   6,535    664 
Interest received   6    5 
Finance costs paid   (573)   (200)
Tax paid   (1,081)   (1,345)
Net cash inflow (outflow) from operating activities   4,887    (876)
           
Cash flows used in investing activities          
Acquisition of property, plant and equipment   (3,741)   (4,593)
Acquisition of exploration and evaluation assets   (430)   (144)
Acquisition of put options   (240)   - 
Net cash used in investing activities   (4,411)   (4,737)
           
Cash flows from financing activities          
Dividends paid   (2,720)   (2,424)
Payment of lease liabilities   (37)   (37)
Shares issued – equity raise (net of transaction cost)   -    10,823 
Loan note instrument – Motapa payment   -    (5,399)
Loan note instrument – solar bond issue receipts (net of transaction cost)   -    4,500 
Net cash (used in) from financing activities   (2,757)   7,463 
           
Net (decrease) increase in cash and cash equivalents   (2,281)   1,850 
Effect of exchange rate fluctuations on cash and cash equivalents   (847)   (157)
Net cash and cash equivalents at beginning of the period   (11,032)   1,496 
Net cash and cash equivalents at end of the period   (14,160)   3,189 

 

Cash flows from operating activities in the Quarter is detailed in note 24 to the Interim Financial Statements. Cash inflows from operations before working capital changes in the Quarter were $10.5 million, compared to $0.5 million in the previous quarter.

 

 

 11 

 

The table below illustrates the operating cash flow for the Quarter and the last 8 preceding quarters:

 

Cash generated from operations before working capital changes
($'000's) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024
Operating cash flow 13,470 13,499 13,731 7,099 51 4,865 16,303 297 10,508

 

Cash generated from operations before working capital changes in the Quarter improved significantly from the comparable quarter due to increased gold sales, the higher average gold price and lower costs at the Bilboes oxide mine after it had been placed on care and maintenance in October 2023. Cash generated from operations before working capital at Blanket in April was $7.1 million, which reflects the high production level achieved in the month and the improved gold price. Finance costs paid in the Quarter remained stable. Solar loan note interest, rehabilitation liability unwinding interest and overdraft interest increased from the comparable quarter.

 

The acquisition of property, plant and equipment relates to the investment at Blanket as discussed further in section 4.7; the investment in exploration and evaluation assets relates to the exp