Caledonia Mining Corporation Plc · AMEX:CMCL
Caledonia Mining — Q2 2019 Earnings Presentation
26 slides from Caledonia Mining's earnings presentation, 2019
Slide 1: Quarterly Results Presentation Q2 2019
Quarterly Results Presentation Q2 2019
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 o
Slide 3: Introduction
Introduction 1. Strategy update 2. Q2 2019 Financial Results 3. Operating Review 4. Current operating challenges and planned mitigating actions 5. Outlook 3
Slide 4: Strategy
Strategy Increase in free cash flow to grow dividends and invest in further growth Medium Term (2019 – 2022): Complete the Central Shaft Project 1. Increase annual production capacity to 80,000 ounces per annum* 2. Increased cash flows due to higher production, lower unit costs and reduced capex 3.
Slide 5: Strategy - the Zimbabwe opportunity
Strategy - 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 • Several prolific multi-million ounce gold belts: substantial po
Slide 6: Strategy: Blanket offers significant exploration potential at depth
Strategy Blanket offers significant exploration potential at depth Section View Central Shaft will begin to replace the current production shaft from mid 2020. Current planned development for Central Shaft is to open up three new operating levels through conventional horizontal development and a fou
Slide 7: Financial Results
Financial Results 7
Slide 8: Q2 2019 Results Summary
Q2 2019 Results Summary 3 Months to June 30 6 Months to June 30 Comment 2018 2019 % Chg 2018 2019 % Chg Production was broadly similar, but lower than expected due to lower than expected Gold produced (oz) 12,657 12,712 0.4% 25,582 24,660 -3.6% mine production and grade On-mine cost per On-mine cost
Slide 9: Review of Results
Review of Results Profit and loss 3 months ended June 30 6 months ended June 30 $ 000’s • Lower production costs were largely due to 2018 2019 % Chg 2018 2019 significant currency devaluations during Revenue 16,198 16,520 2% 34,257 32,440 -5% the period which had the effect of reducing Less: costs i
Slide 10: Review of Results - Cash Flow
Review of Results Cash Flow For the 6 months ended June 30 $ 000’s • Large non cash adjustments include unrealised foreign 2018 2019 Profit Before Tax 11,075 39,981 exchange gains due to currency devaluations resulting Adjustments for: in the devaluation of Blanket’s deferred tax liability and Unrea
Slide 11: Review of Results - Balance Sheet
Review of Results Balance Sheet $ 000’s December 31 June 30 • Non-current assets increased due to the continued investment at the Central Shaft project and sustaining 2018 2019 capital Fixed Assets 97,525 105,671 • Inventory levels remain elevated following increase in Current Assets 2018 although h
Slide 12: Adjusted Earnings
Adjusted Earnings Significant foreign exchange gains boosted IFRS Earnings 40 6.0 35 0.03 30 25 21.3 $ Millions 20 38.7 32.6 15 1.1 10 4.4 5 5.7 0 Consolidated NCI Attributable Blanket Unrealised Deferred Profit on the Adjusted Profit IFRS Earnings Profit Employee Trust Foreign Taxation Sale of Adju
Slide 13: Review of Results - Other matters
Review of Results Other matters • Below expected production in H1 and July 2019 have resulted in management reducing Changes to Production production guidance for FY 2019 Guidance • New FY 2019 guidance range of 50,000 – 53,000 oz (down from 53,000 – 56,000 oz) • The government have announced a gold
Slide 14: Operating Review
Operating Review 14
Slide 15: Review of Operations
Review of Operations Tonnes Milled & Grade (2011 – 2019) • Despite grade difficulties tonnes milled continues on its long term upward trend 5 180,000 160,000 • Increasing tonnes milled and an increase 4.5 140,000 in grade to approximately the M&I grade Tonnes Milled (t) Head Grade (g/t) 120,000 (3.7
Slide 16: Quarterly Operating Metrics
Quarterly Operating Metrics 2017 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Tonnes Milled 124,225 136,163 136,064 150,755 123,628 132,585 151,160 153,540 122,389 135,847 Average Grade (g/t) 3.42 3.08 3.52 3.62 3.48 3.19 3.12 3.27 3.26 3.11 Average Recovery (%) 93.7 92.8 93.6 93.6 93.4 92.8 92.6 92.8 93
Slide 17: Resources
Resources Increased exploration expenditure begins to bear fruit Consistent resource replacement despite growing production (300koz mined since 2011) 2,000 1,800 1,600 Contained Ounces (koz) 1,400 963 1,200 887 1,000 623 800 419 408 398 390 462 550 600 425 55 353 62 56 362 55 267 400 172 193 223 87
Slide 18: Operating Challenges
Operating Challenges 18
Slide 19: Operating challenges
Operating challenges A number of internal and external operating challenges have been encountered Operating Challenges Remedial Action • Mining dilution following the introduction of long-hole stoping in narrower reefs for safety reasons Lower Grade due to mining dilution • Increased training of dri
Slide 20: Safety Performance
Safety Performance Ensuring accident-free production is non-negotiable Blanket Safety Incident Data (2015 – 2019) Nyanzvi Safety Transformation Program 25 5 4.5 20 4 3.5 NO. INCIDENTS 15 3 TIFR 2.5 10 2 1.5 5 1 0.5 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2015 2016 2017 2018 2019 fatal
Slide 21: Grade improvement presents significant opportunities
Grade improvement presents significant opportunities Below target grade results in lower gold production and elevated unit production costs Head Grade (2011 – 2019) Inferred Grade 5 – 4.52g/t M&I Grade – 3.72g/t 4.5 Head Grade (g/t) 4 3.5 3 2.5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 22: Electricity supply remains unreliable
Electricity supply remains unreliable Back up generators mitigate production impact but are not a viable long term solution • Unreliable electricity supply presents a significant operating challenge for Blanket • Blanket pays a higher tariff to avoid load shedding ($0.125/KWh) • Supply remains unrel
Slide 23: Zimbabwe
Zimbabwe Despite regulatory uncertainty – there are significant grounds for optimism • Government has a commercial and pragmatic approach with several encouraging policy measures • Genuine attempts to stimulate investment e.g. the removal of indigenisation requirement in 2018 and recent relaxation o
Slide 24: Outlook
Outlook 24
Slide 25: Medium to Long-term Outlook
Medium to Long-term Outlook Vision to build a mid tier gold producer with minimal dilution • Commission Central Shaft 18 – 24 • Increase production capacity to 80,000 ounces per annum 70,000 – 80,000oz/yr Months by 2022 • Decrease AISC to $700 - $800 per ounce • Declining CAPEX post Central Shaft de
Slide 26: Contacts
Contacts Website: www.caledoniamining.com North America IR (3ppb LLC) : Share Codes: NYSE American and AIM – CMCL Patrick Chidley, Paul Durham TSX - CAL Tel : +1 917 991 7701; +1 203 940 2538 Caledonia Contacts: European IR: Swiss Resource Capital Mark Learmonth, CFO Jochen Staiger Tel: +44 (0) 1534