Caledonia Mining says 2019 earnings will be ‘substantially higher than market expectations’

Caledonia Mining Corporation says earnings for 2019 will be “substantially higher” than forecast on firmer gold prices, higher than expected output and costs that were lower than projected.

The Toronto-listed company runs the Blanket gold mine near Gwanda.

“As a result of these factors, adjusted earnings per share (before net realised and unrealised foreign exchange gains) for 2019 are expected to be in the range of US$1.55 to US$1.75 per share compared to company guidance in early 2019 of US$0.86 to US$1.17 per share,” Caledonia says in an update.

Earnings per share on an IFRS basis, which includes net realised and unrealised foreign exchange profits, is expected at US$3.80 to US$4.00 per share. Full year earnings results for 2019 are expected in March. 

“I am delighted by the excellent performance of the Blanket Mine, particularly in the latter stages of 2019, which, combined with the strength of the gold price, has resulted in us comfortably exceeding expectations for the year ended December 31, 2019,” says Steve Curtis, Caledonia CEO.

“This is down to the hard work and dedication of our exceptional team operating at the Blanket Mine not least in how they have successfully addressed challenges in the year such as the variable power supply and grade fluctuations. With these challenges addressed, an excellent start to 2020 and with the development of the Central Shaft continuing on time and record quarterly production in the fourth quarter, we look forward to an exciting year ahead.”


The higher-than-forecast earnings would be a turnaround for Caledonia, which mid-last year had to cut production guidance for 2019 to between 50,000 and 53,000 ounces, down from previous forecasts of 53,000 to 56,000 ounces.

However, the company managed a rebound in the last quarter of 2019, when Blanket produced 16,876 ounces, beating the previous production record of 16,425 ounces set in the final quarter of 2017.

The company expects to commission a new central shaft in the last quarter of 2020, which is expected to ramp up production to 80,000 ounces per year.

Blanket mine installed generator power with 18.5MW capacity and has floated a tender for the building of a 20MW solar plant to power up operations.