Caledonia Mining Corporation Plc · AMEX:CMCL
Caledonia Mining — Q2 2020 Earnings Presentation
26 slides from Caledonia Mining's earnings presentation, August 2020
Slide 1: Q2 2020 Results Presentation
Q2 2020 Results Presentation August 2020
Slide 2: Disclaimer
Disclaimer This presentation does not constitute, or form part of, any offer to sell or issue or any solicitation of any offer to purchase or subscribe for, any shares in Caledonia Mining Corporation Plc (“Caledonia”), nor shall it (or any part of it) or the fact of its distribution, form the basis
Slide 3: Introduction
Introduction 1. Strategy update 2. Review of operations 3. Review of financial results for Q2 2020 4. Outlook 3
Slide 4: Strategy
Strategy Increased free cash flow to grow dividends and invest for further production Short Term (2020 – 2022): Complete the Central Shaft Project 1. Increase production to 80,000 ounces per annum from 2022 2. Increased cash flows due to higher production, lower unit costs and reduced capex from 202
Slide 5: Strategy: Blanket offers significant exploration potential at depth
Strategy Blanket offers significant exploration potential at depth Section View Central Shaft will replace the current production shaft by 2021. Current planned development for Central Shaft is to open three new operating levels through conventional horizontal development and a fourth operating leve
Slide 6: Operating Review
Operating Review 6
Slide 7: Review of Operations
Review of Operations Tonnes Milled & Grade (2011 – Q2 2020) • Grade in Q2 2020 was slightly below target and lower than the preceding quarter due 5 180,000 160,000 to increased mining dilution. Head Grade (g/t) 4.5 Tonnes Milled (t) 140,000 • Tonnes milled improved on Q2 2019 due to 120,000 manageme
Slide 8: COVID-19
COVID-19 Operational impact and mitigating actions • Caledonia and Blanket Mine are responding to the COVID-19 Pandemic and the threat it poses to Blanket Mine’s employees, their families, the broader community and the continuity of its operations. • Regular interaction with Government health offici
Slide 9: Financial Results
Financial Results 9
Slide 10: Results Summary Information
Results Summary Information 3 months ended June 30 6 month ended June 30 % Comment 2019 2020 % Change 2019 2020 Change 6% increase in gold production compared to Q2 2019 (the “comparable quarter”) Gold produced (oz) 12,712 13,499 6% 24,660 27,732 12% due to increased tonnes milled, higher grade and
Slide 11: Review of Results
Review of Results Profit and loss 3 months ended June 30 6 month ended June 30 % % 2019 2020 2019 2020 Chg Chg Revenue 16,520 22,913 39% 32,440 46,515 43% Increased quantity of gold sold and a higher average realised gold price Royalties (864) (1,146) 33% (1,683) (2,328) 38% Higher royalty was in-li
Slide 12: Review of Results: Revenue Reconciliation
Review of Results Half year and quarterly revenue reconciliation Average Gold Revenues Realised Gold Tonnes Grade Recovery Production Gold Sales (oz) (US$'m) Price (t) (g/t) (%) (oz) (US$/oz) H1 2020 46,480 1,628 28,555 284,132 3.29 93.9 27,732 H1 2019 32,413 1,291 25,102 258,236 3.18 93.3 24,660 Re
Slide 13: Review of Results: Production Costs
Review of Results Production costs 3 Months ended Change June 30 (%) 2019 2020 Salaries and wages 3,961 4,901 24% Increase due to the increased head count and more man-hours worked Consumable materials 2,642 3,732 41% Increase due to the higher maintenance cost of trackless equipment and COVID-19 co
Slide 14: Review of Results: Cash Flow
Review of Results Cash Flow 3 months ended 6 months ended June 30 June 30 Notes: % % 1. Significant non-cash adjustments for unrealised foreign 2019 2020 2019 2020 Change Change exchange gains due to the devaluation of the Zimbabwean dollar vs the US dollar. The largest gains 27,695 9,988 (64%) 39,9
Slide 15: Strong operating cash flow supports significant capital investment
Review of Results Strong operating cash flow supports significant capital investment Quarterly Operating Cash Flow and Capital Investment (2017 – 2020) 20.0 15.0 4.4 10.0 0.5 0.7 1.3 3.0 5.0 0.2 10.1 10.1 7.9 7.0 $m 4.7 6.8 5.1 6.3 4.9 4.8 2.1 4.0 - 1.8 (1.2) (1.1) (0.7) (2.1) (0.7) (2.9) (4.2) (4.1
Slide 16: Review of Results: Balance Sheet
Review of Results Balance Sheet December June 30 Balance Sheet 31 • Non-current assets increased due to the continued investment 2020 2019 in terms of the Central Shaft project and sustaining capital. Fixed Assets 119,506 113,714 • Inventories increased due to the increased holdings of Current Asset
Slide 17: Review of Results: Other matters
Review of Results Other matters • In the Q2 2020 the Caledonia Board approved a 12 Mwac solar plant project to supplement the current power from Gensets and the local power utility. • Plant will be owned and operated by Caledonia; power will be sold to Blanket • The plant is expected to supply Blank
Slide 18: Outlook
Outlook 18
Slide 19: Medium to Long-term Goals
Medium to Long-term Goals Build a mid tier gold producer with minimal dilution • Commission Central Shaft now – 18 • Increase production to 80,000 ounces per annum 70,000 – 80,000oz/yr Months • Reduce AISC to $700 - $800 per ounce • Review dividend policy 2–4 • Declining CAPEX post Central Shaft del
Slide 20: Investing in growth to 80koz/year from 2022
Investing in growth to 80koz/year from 2022 Constructing a new mine below the current workings (2015 to 2020) 6m diameter, 4-compartment shaft from surface to 1,200m. Scheduled for commissioning late 2020 Shaft sinking completed in July 2019; currently shaft equipping Mining and exploration access b
Slide 21: New Central Shaft drives development of sub-750m zones
New Central Shaft drives development of sub-750m zones Constructing a new mine below the current workings Central Shaft No. 4 Shaft Jethro Shaft 22 Level No. 6 Winze (750m) Plan illustrative and not to scale 21
Slide 22: New infrastructure is transformational for the Blanket Mine
New infrastructure is transformational for the Blanket Mine Improves haulage and worker logistics Sinking completed mid 2019, currently in a 12-month equipping phase Commissioning and ramp-up expected in H2 2020 22
Slide 23: Strong free cash flows expected from 2020 onwards
Strong free cash flows expected from 2020 onwards Declining capex and increasing cash generation 45 M&I Resources only as Budget @ $1,600/oz Historic Data per NI 43-101 40 Technical Report 35 • Production post 2022 is expected to come 30 from a combination of Measured, Indicated and Inferred Resourc
Slide 24: Attractive new opportunities in Zimbabwe
Attractive new opportunities in Zimbabwe 24
Slide 25: The Zimbabwe Opportunity
The Zimbabwe Opportunity World-class gold potential: under-explored and under-capitalized Historic & current 1Moz+ producers Significant regional potential • Zimbabwe has historically produced over 45 million ounces of gold • Prior to 2000, Zimbabwe produced more gold than Mali, Tanzania, Burkina Fa
Slide 26: Contacts
Contacts Website: www.caledoniamining.com North America IR (3ppb LLC) : Share Codes: NYSE American – CMCL Patrick Chidley, Paul Durham AIM London SE – CMCL Tel : +1 917 991 7701; +1 203 940 2538 Caledonia Contacts: European IR: Swiss Resource Capital Mark Learmonth, CFO Jochen Staiger Tel: +44 (0) 1