Caledonia Mining Corporation Plc · AMEX:CMCL
Caledonia Mining — FY2015 Earnings Presentation
24 slides from Caledonia Mining's earnings presentation, 2016
Slide 1: 2015 Results Overview
eo Caledonia Mining AS Corporation 2015 Results Overview a
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: Overview
Overview • Robust results in a challenging environment – Cashflow from operating activities down by $6.8m from $15.6m in 2014 to $8.8m in 2015 • $4.5m due to the lower gold price: average realised gold price fell from $1,245/oz to $1,139/oz • $2.1m due to higher operating costs: lower cost per tonne
Slide 4: Accounting Policies
Accounting Policies • Change from Canadian dollar to US dollar reporting – Improves transparency of financial reporting: reflects the operations at Blanket mine for which revenues and costs are in US$ – Dividend re-based to US$ with effect from January 2016: 4.5 US cents per annum compared to 6.0 Ca
Slide 5: Profit and Loss
Profit and Loss Overview Summary P&L (US$'m) • 2015 revenues down due to the weaker gold price. 3 Months to 31 12 Months to 31 Little change in the ounces of gold sold year-on-year; December December Q4 2015 sales 1,200 ounces higher than Q4 2014 2014 2015 2014 2015 • Royalty rate remains at 5% of r
Slide 6: Revenues
Revenues Effect of Changes in Production, Sales and Gold Price Production and Revenues • 13% increase in tonnes milled outweighs lower grade Revenue effect and recovery resulting in 2% increase in production 2014 2015 Movt. (%) ($'m) • 8% fall in average realised gold price following price Tonnes mi
Slide 7: Gold Production
Gold Production Completion of the Tramming Loop boosts mine production • A sustained increase in tonnes mined and milled following completion of the Tramming Loop in Q2 2015 7
Slide 8: Production Costs
Production Costs Production Costs • Production costs increase by 8% – Cost per tonne milled decreases by 4% Total Production costs 2014 2015 Movt Production costs ($'m) 27.9 30.0 8% – On-mine cost per ounce increases by 7%: lower grade Cost per tonne milled ($/t) 71.42 68.21 -4% outweighs the effect
Slide 9: G&A
G&A General and Administrative Costs • 2% increase in the recurring G&A expense 2014 2015 Movt • Advisory services includes tax advice on compliance, re- $'000 $'000 domicile to Jersey and US$ reporting Investor Relations 514 513 0% • Employee cost reflects increased headcount (particularly in Audit
Slide 10: Taxation
Taxation Taxation • 2015 Income tax charge reduced due to the increased 2014 2015 capital investment at Blanket, which shields profit from $'000's $'000's tax ….. Income tax - current year 4,582 506 • ….Although this results in the higher (non-cash) deferred Income tax - adj to prior years (194) (1,
Slide 11: Earnings per Share
Earnings per Share Adjusted Earnings per share (Non IFRS) 2014 2015 $'000 $'000 Attrib earnings (IFRS) 4,387 4,679 Impairments 178 - Foreign Exchange gain (1,065) (2,850) Deferred tax 709 2,567 Discont. Zambia operations 896 716 SA tax penalties and interest 0 744 Adj. to prior year tax 300 (1,636)
Slide 12: Cash Flow
Cash Flow Summary Cash Flow ($'m) 2014 2014 2014 2014 2015 2015 2015 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Cash flow from operations 6.2 3.3 4.7 1.3 1.8 2.1 1.6 3.4 Taxation paid (0.5) (1.7) (1.3) (1.0) (0.4) (0.2) (0.2) (0.7) Interest (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.4) Cash from operating activ
Slide 13: Revised Investment Plan Capital Expenditure and Funding
Revised Investment Plan Capital Expenditure and Funding • Higher capex in 2015 compared to plan due to the front-loading of capital purchases: specific items were available at attractive prices • results in $5m cumulative reduction in projected capex from 2016 to 2020 • All further capex is expected
Slide 14: Balance Sheet
Balance Sheet Summary Balance Sheet ($'m) • Increase in PPE includes investment of $17.8m – Rate of capital expenditure increased as planned to 31-Dec 31-Dec implement the Revised Plan 2014 2015 Fixed Assets 34.7 49.3 • Reduced working capital due to close management Inventories 6.5 6.1 attention Pr
Slide 15: Other matters
Other matters • Hedging – “Collar and Cap” hedge ($1,050-$1,079) reduces downside risk in case of a lower gold price • Maximum hedge cost $435,000; full participation in gold price above $1,079 – Continued high rate of investment at Blanket and continuation of the Caledonia dividend means that Caled
Slide 16: Capital Investment Current Status
Capital Investment Current Status • Tramming Loop – Completed in June 2015, following which underground production increased to a new record • No. 6 Winze (Blanket ore body, below 750m) – Shaft completed and equipped – “On-reef” development from mid-March: this project now contributes to production
Slide 17: Earthworks – Cut and Fill
Earthworks – Cut and Fill Commenced January 2015
Slide 18: First Blast
First Blast 17th September 2015
Slide 19: Shaft Construction
Shaft Construction Shaft Barrel with Shutter Rings in place at 24m depth 20th October 2015
Slide 20: Site Infrastructure under Construction
Site Infrastructure under Construction Commenced mid October 2015 20
Slide 21: Winder Construction in progress
Winder Construction in progress Commenced mid October 2015 21
Slide 22: Progress to date
Progress to date 22
Slide 23: Exploration
Exploration Increased focus begins to show results • Exploration at Blanket is slow due to the depth and the steeply-dipping ore bodies • However, there has been an increased focus on exploration in 2015 • 2 resource upgrades in 2015 – Additional inventory added which replaced mining depletion – Imp
Slide 24: Outlook 2016: a Transformational Year
Outlook 2016: a Transformational Year • Sustained increase in production following completion of the No.6 Winze – Target production: • 2016 - 50,000 ounces • 2017 - 65,000 ounces • Falling cost per ounce as fixed costs (approx. 65% of on-mine costs) are spread over increased production ounces • Incr