Caledonia Mining Corporation Plc · AMEX:CMCL
Caledonia Mining — Q3 2017 Earnings Presentation
15 slides from Caledonia Mining's earnings presentation, 2017
Slide 1: Q3 2017 Results Overview
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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 (“Caledonia”), nor shall it (or any part of it) or the fact of its distribution, form the basis of,
Slide 3: Q3 2017 Results Summary
Q3 2017 Results Summary Production was flat and unit operating costs were higher for the quarter 1 - Non-IFRS measures such as “On-mine cost per ounce”, “AISC” and “average realised gold price” are used throughout this document. Refer to Section 10 of this MD&A for a discussion of non-IFRS measures.
Slide 4: Income Statement
Income Statement Higher costs, taxation and share based payment expenses led to a decrease in EPS • Higher revenues due to higher production offset by a lower realised gold price • Production costs were flat in the quarter and include incremental costs arising from new production areas e.g. declines
Slide 5: Production and Revenues
Production and Revenues Effect of Changes in Production, Gold Price • Production in Q1 and Q2 of 2017 was adversely affected by logistical constraints on 22 Level (750 metres below surface) which restricted tonnage and hampered mining flexibility i.e. the ability to access higher grade areas • Manag
Slide 6: Gold Production
Gold Production Operations remain on track for 80,000 ounces by 2021 16 Quarterly Production • Underground logistical constraints have been partially 14 addressed, but will not be completely resolved until the 12 Gold Produced (k.oz) Central Shaft is commissioned in early 2020 10 • November: commenc
Slide 7: Production Costs
Production Costs On-mine costs remain contained; substantial drop in AISC • Blanket did not experience significant inflationary pressure on input costs. Modest increase in on-mine costs due to the increased costs arising from new underground equipment and the opening of new production ends • Cost pe
Slide 8: General & Administrative Costs
General & Administrative Costs G&A costs reduced • G&A costs for the 9 months to September 30 were 13% lower year-on-year – Lower advisory fees due to use of in-house legal resource and the reduced costs of evaluating external investment opportunities • Gains in the South African Rand were sustained
Slide 9: Dividend
Dividend A track record of sustainable and increasing dividends Dividend Sector Comparison 10% 8.9% 9% 8% 6.9% 7% Dividend Yield 6% 5.0% 5% 4.5% 4.4% 4% 3.6% 3% 2% 1.1% 1% 0% Centamin Highland Gold Caledonia Pan African Resources Acacia Polymetal Randgold Payout Ratio 83% 90% 26% 58% 43% 47% 38% • D
Slide 10: Earnings per Share
Earnings per Share A strong recovery 45 40.8 40 Quarterly Adjusted EPS 39.0 35 30.5 Adjusted EPS (USc) 30 26.5 25 22.0 19.0 18.4 18.9 20 14.7 13.5 15 12.9 9.3 8.8 10 7.5 4.5 5 0.0 0 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 10
Slide 11: Cash Flow
Cash Flow Strong cash generation despite significant investment and dividends • Cash from operating activities remains robust • High capex in Q3 2017 was according to plan • Caledonia anticipates that its cash resources in conjunction with further cash generation will allow dividend to be sustained
Slide 12: Balance Sheet
Balance Sheet Financial position remain robust through the investment cycle • Caledonia Mining’s balance sheet has remained strong through a period of cyclically low gold prices and significant capital investment over the past 2 years. • Increased fixed assets reflects the continued investment in th
Slide 13: Operational Matters
Operational Matters • Underground logistical constraints have been partially addressed – Improved rostering of underground employees; improved maintenance of haulages – Introduction of mid-shaft loading using Central shaft from November 2017 • A temporary measure: allows No.4 Shaft to focus on hauli
Slide 14: Extend the Central Shaft to 1,320 metres
Operational Matters Extend the Central Shaft to 1,320 metres • Central Shaft is the main component of the investment programme at Blanket Mine – The plan commenced in early 2015 and envisages production of 80,000 ounces by 2021 with a mine life until 2027 based on the resources existing at December
Slide 15: Outlook
Outlook • Focus remains on the investment programme to increase production to 80,000 ounces by 2021 – Creates greater operational flexibility for continued deep-level exploration and development • Guidance for 2017 of 54,000 to 56,000 ounces – On mine cash costs are forecast to be $615-$645 per ounc