Caledonia Mining profits rise after ‘transformational’ year, revenue hits US$100m

Caledonia Mining posted higher profit for 2020 on record production at Blanket Mine and higher gold prices.

EBITDA rose to US$43.3 million, from US$29.9 million in 2019, as revenue jumped a third to US$100 million.

Gold production climbed to 57,899 ounces, from 55,182 ounces the previous year, a record annual production for Blanket Mine, located near Gwanda.

Caledonia expects gold output to rise to between 61,000 and 67,000 ounces this year. Central Shaft commissioning is anticipated in the first quarter of 2021 after which production is expected to begin to ramp up to about 80,000 ounces in 2022, in line with its previously announced target.

“Operationally, the last 12 months have been transformational for the business,” says CEO Steve Curtis. “Central Shaft has been a five-year project costing approximately US$67 million, all funded through internal cash flow and I am delighted that equipping was completed in the period and commissioning is on track to be completed in the first quarter of 2021.”

“We also increased the dividend for the fourth time at the start of January to 11 cents a share. This is a 60% cumulative increase from the level of 6.875 cents since October 2019, creating genuine value and returns for our shareholders,” he said.

The total dividend in 2020 was 33.5 US cents per share, up 22% from 2019. 

Caledonia: ‘complicated year’

“Despite our operational success, 2020 has been a complicated year globally with the COVID-19 pandemic wreaking havoc throughout the world and disrupting many people’s lives and livelihoods,” Curtis said.

The company plans to focus on completing the Central Shaft project.

It will also carry out exploration activities at Glen Hume and Connemara North, two new assets that the company acquired for exploration late last year. The company says it is evaluating further investment opportunities in the gold and precious metals sector in Zimbabwe.

Caledonia plans to install a 12MW solar plant at the Blanket Mine. To fund the project, Caledonia issued 600,000 shares to raise US$13 million.


With Proactive