Caledonia Mining Corporation Plc · AMEX:CMCL
Caledonia Mining — Q3 2019 Earnings Presentation
25 slides from Caledonia Mining's earnings presentation, November 2019
Slide 1: Q3 Results Overview & Company Update
November 2019 Q3 Results Overview & Company Update
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: Q3 2019 Financial Results
Q3 2019 Financial Results 3
Slide 4: Q3 2019 Results Summary
Q3 2019 Results Summary 3 Months to September 30 9 Months to September 30 Comment % % 2018 2019 2018 2019 Chg Chg - Production was lower than in comparable periods due to lower mine Gold produced (oz) 13,978 13,646 39,558 38,306 -3.2% 2.4% production and lower grade On-mine cost per ounce 670 686 2.
Slide 5: Review of Results
Review of Results Profit and loss 3 months ended 9 months ended • Increased revenue was driven by a higher September 30 September 30 realised gold price and increased 2018 2019 2018 2019 production Revenue 16,647 19,953 20% 50,904 52,393 3% Less: • Reductions in the Export Credit Royalty (834) (999)
Slide 6: Review of Results: Cash Flow
Review of Results Cash Flow For the 9 months ended September 30 • Substantial non cash adjustments in unrealised foreign 2018 2019 exchange have affected adjusted earnings and Operating profit 15,413 50,361 resulted in a significant divergence between cash Adjustments for: generation and earnings Un
Slide 7: Review of Results: Balance Sheet
Review of Results Balance Sheet Dec 31 Sept 31 • Fixed Assets continue to grow in line with Caledonia’s 2018 2019 investment plan at Blanket to deliver 80,000 ounces Fixed Assets 97,525 109,255 by 2022 Current Assets • Non current liabilities are primarily a rehabilitation provision Inventories 9,42
Slide 8: Adjusted Earnings
Adjusted Earnings Significant unrealised Forex gains 9.0 8.0 1.5 0.0 7.0 6.0 5.0 $ Millions 4.9 8.5 4.0 7.0 3.0 2.0 0.3 1.0 1.7 0.0 Consolidated NCI Attributable Blanket Unrealised Deferred Adjusted Profit IFRS Earnings Profit Employee Trust Foreign Taxation Credit Adjustments Exchange Gains 8
Slide 9: Grade remains a focus area
Grade remains a focus area Tonnes Milled and Grade 2011 - 2019 5 180,000 160,000 4.5 140,000 120,000 Tonnes Milled (t) Head Grade (g/t) 4 100,000 80,000 3.5 60,000 3 40,000 20,000 2.5 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Oct 2011
Slide 10: Company Overview
Company Overview 10
Slide 11: Caledonia Mining : Overview
Caledonia Mining : Overview • Established, profitable gold producer, now expanding production from the Blanket Gold Mine in the Gwanda Greenstone Belt, Zimbabwe Caledonia: • Jersey domiciled company; listed on NYSE MKT, TSX and AIM Profitable gold producer • US$8m in cash at 30 September 2019 • YTD
Slide 12: 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 13: Building a solid track record
Building a solid track record Built on production growth, good cost control and capital investment Caledonia Mining has built a solid track record with rising production and declining unit operating costs, this has delivered solid and growing operating cash flow which has supported significant capit
Slide 14: Capital Structure & Financials
Capital Structure & Financials Relative Performance Capital Structure 350 Shares in issue (m) * 10.8 300 Options (m) 0.038 Relative performance rebased to 100 250 200 Cash (30 September 2019) $8.0m 150 Net Assets (30 June 2019) $122m 100 * Shares in issue reflect shares in issue at October 31, 2019.
Slide 15: Resources
Resources Increased exploration expenditure begins to bear fruit Consistent resource replacement despite growing production (250koz 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 16: Investing in growth : 45% growth to 80koz/year
Investing in growth : 45% growth to 80koz/year Constructing a new generation mine below the current workings Increase underground flexibility & rapid access to Blanket zone below 750m Secure mine life to 2031 New Central Shaft 6m diameter; surface to 1,200m Scheduled for commissioning in 2020 Approx
Slide 17: 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 • Several prolific multi million ounce gold belts: substantial potential for
Slide 18: New infrastructure is transformational for the Blanket Mine
New infrastructure is transformational for the Blanket Mine Central Shaft dramatically improves haulage and worker logistics Sinking completed mid 2019, currently in a 12-month equipping phase Commissioning and ramp-up expected in H2 2020 18
Slide 19: Capital Capital Capital
Strong free cash flows expected from 2020 onwards Declining capex and increasing cash generation 45 Cash flow forecast from M&I Historic Data Resources only as per NI 43- 101 Technical Report • Production post 2022 is expected to 40 come from a combination of Measured, Indicated and Inferred Resourc
Slide 20: Unwinding of Indigenisation
Unwinding of Indigenisation Significant opportunities and a major catalyst for investment • Proposed increase in Caledonia’s shareholding in Blanket from 49% to 64% as local partners “flip-up” from Blanket to a shareholding at Caledonia – Transaction is modestly enhancing for NPV-per-share – Caledon
Slide 21: Investment Case - Summary
Investment Case - Summary 14 years of high margin operations with upside potential • Substantial Production Growth : fully funded • 45% production growth planned • Rising expected cash generation from 2020 expected • Strong future cash generation leaves resources available for strategic purposes : t
Slide 22: Outlook
Outlook 22
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: Medium to Long-term Outlook
Medium to Long-term Outlook Vision to build a mid tier gold producer with minimal dilution • Commission Central Shaft and Increase production capacity 9 – 24 to 80,000 ounces per annum by 2022 70,000 – 80,000oz/yr Months • Reduce AISC to $700 - $800 per ounce • Identify exploration of expansion oppo
Slide 25: Contacts
Contacts Website: www.caledoniamining.com North America IR (3ppb LLC) : Share Codes: NYSE MKT 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 679