Caledonia Mining Corporation Plc · AMEX:CMCL
Caledonia Mining — FY2014 Earnings Presentation
21 slides from Caledonia Mining's earnings presentation, March 2015
Slide 1: 2014 Annual Results Review
2014 Annual Results Review March 2015
Slide 2: Disclaimer
Website: www.caledoniamining.com TSX: CAL. OTCQX: CALVF. AIM: CMCL. 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
Slide 3: Profit and Loss
Profit and Loss Summary P&L • 2014 revenues adversely affected by lower gold price 3 Months to 31 12 Months to 31 received and lower gold sales December December • Lower royalty in 2014 reflects the lower gold price and 2013 2014 2013 2014 the reduction in royalty rate from 7% to 5% effective Revenu
Slide 4: Revenues: Effect of changes in production, gold price, FX etc.
Revenues Effect of changes in production, gold price, FX etc. Production and Revenues • Lower grade and the lower realised US$ Revenue gold price have significant adverse effects effect on revenues 2013 2014 Dif (%) (C$'m) Tonnes milled (K.tonnes) 392 391 -‐0.4% (0.3) • Effect of the lower internat
Slide 5: Gold Production
Gold Production • Quarterly production is now approx. 10,000 ounces per quarter compared to over 12,000 ounces per quarter in mid-2012 – Lower production is primarily due to lower grades which have fallen from a peak of 4.5g/t to 3.4g/t in Q4 2014. • Lower grades are due to a drop in the average gra
Slide 6: Gold Production Outlook
Gold Production Outlook • The Revised Plan projects increasing production from 2016 onwards • No. 6 Winze provides access below 750m from January 2016 • Central Shaft commences production from mid-2018 • Modest improvement in grades as production from new, higher grade areas are blended with product
Slide 7: Operating Costs
Operating Costs Operating Costs • On mine costs (labour, electricity, consumables) increase by 1.3% y-on-y in US$ terms 2013 2014 Movt On-‐mine costs (US$'m) 27.60 27.97 1.3% – Operating costs benefit from: deflationary X-‐rate (1US$: C$) 1.03 1.10 environment in Zimbabwe; Rand devaluation On-‐mi
Slide 8: G&A General and Administrative Costs
G&A General and Administrative Costs • 5% increase in C$ terms; 2% decrease in US$ terms 2013 2014 Movt (C$'m) (C$'m) • Measures in-hand to further reduce G&A in 2015 Investor Relations 0.7 0.6 -‐22% – Termination of management contract (offset Man. Contract fee 0.9 0.9 7% somewhat by external cons
Slide 9: Other Income/Expense
Other Income/Expense Other income/expense • FX gain on movement in monetary assets (i.e. cash C$'000 and receivables) held in another currency by Foreign exchange gain entities that do not have C$ as their functional GMS SA -‐ US$ bank 467 currency i.e. GMS SA: US$ bank account and US$- GMS SA US$-
Slide 10: Taxation
Taxation Taxation • Zimbabwe income tax @ 25% on profit adjusted for capital C$'000 investment and royalty Zimbabwe income tax 3,125 – Taxable profit in 2015 and 2016 will be shielded by higher SA Income Tax 745 capex (although still deferred tax charge) UK Income tax 974 • SA income tax at 28% on i
Slide 11: Earnings per Share: IFRS
Earnings per Share: IFRS Earnings Per Share (IFRS) • 2013 earnings adversely affected by Nama impairment 2013 2014 ($14.2m) C$'m C$'m • BETS adjustment adds back the attributable dividends paid to Attrib earnings (3.1) 4.9 Blanket employees from the indigenisation structure (per IFRS BETS adj (0.1)
Slide 12: Earnings per Share: Non IFRS
Earnings per Share: Non IFRS Adjusted Earnings per share (Non IFRS) • No unusual donations in 2014 (2013: US$2m donation to 2013 2014 Presidential Fund, less tax relief) C$'m C$'m • Foreign exchange gains in P&L are reversed out Attrib earnings (IFRS) (3.2) 4.8 • 2013 Impairment i.r.o Nama; 2014 imp
Slide 13: Earnings: Analysts Forecasts
Earnings: Analysts Forecasts Analyst forecasts • IFRS earnings are at the bottom end of the EPS PBT Cash forecast range: analysts do not forecast (C. Cents) C$'m C$'m deferred tax expense, FX gains, tax leakage Numis (Nov 2014) 11.0 12.2 23.4 in UK and SA and were unaware of the WH I reland (Nov 201
Slide 14: Earnings: Outlook
Earnings: Outlook • Stable production for 2015 (approx. 42koz) with first production increases expected from 2016 in terms of the Revised Plan – Production guidance has been provided 2015 to 2021 • On-mine costs are stable in overall terms – little inflation on input prices • Production costs per ou
Slide 15: Balance Sheet
Balance Sheet Summary Balance Sheet (C$'m) • Increase in PPE largely reflects the devaluation of the C$ against the US$ 31 Dec 31 Dec – In US$ terms fixed assets at Blanket increase by approx. 2013 2014 US$2.5m Fixed Assets 33.4 40.4 Inventories 6.9 7.6 • Significant capital expenditure to implement
Slide 16: Cash Flow
Cash Flow Summary Cash Flow (C$'m) • Cash flows remain robust throughout 2014, despite fluctuations in production and the gold 2013 2014 2014 2014 2014 2014 Year Q1 Q2 Q3 Q4 Year price Cash flow from operations 22.8 6.9 3.5 5.1 3.4 18.8 • Capex was subdued in 2014, but will increase Taxation paid (8
Slide 17: Cash Flow Outlook
Cash Flow Outlook • Blanket and Group cash flows remain robust, despite lower gold price • Operating cash flows at Blanket are expected to remain robust in 2015, subject to variations in gold price • Capex will increase in 2015 due to investment in the Central Shaft e.g. $1.3m spent on winders in Fe
Slide 18: Operational Update
Operational Update • No significant operational issues in 2014 or post year-end – New compressor commissioned in late February after we resolved issues with ZESA’s equipment – Re-affirm 42koz production target for 2015: H2 likely to be better than H1 due to higher number of production days • Improvi
Slide 19: Operational Update
Operational Update Implementation of the Revised Plan on-track • Tramming Loop on schedule for completion at mid-year: over 60% complete at end February • Sinking of Central Shaft to commence earlier than planned: • Sinking plan revised to single-stage blind sink – no effect on projected production
Slide 20: Operational Update
Operational Update No. 6 Winze – Production Winders installed • Double drum rock winder installed with capacity of 600t/day (500t ore and 100t waste) • No 6 Winze from 750m to 930m – Shaft to be deepened further after Central Shaft is operational – Production build-up will commence early 2016 with f
Slide 21: Operational Update
Operational Update Central Shaft – Site Preparation