Chronicle Editor
Oliver Kazunga, Acting Business Editor
ALTERNATIVE Investment Market (Aim) quoted miner, Caledonia Mining Corporation Plc, which owns Blanket Gold Mine in Gwanda, says earnings for 2019 will be “substantially” higher than market expectations.
The mining group said underpinned by the continued strength of the gold price, higher than expected production and lower than expected operating costs, earnings per share for the period under review were expected to be in the range of US$1,55 to US$1,75.
The figures are above the company’s initial guidance issued early last year of between US$0,86 and US$1,17 per share.
In a statement, Caledonia said:
“The company is pleased to announce that earnings for 2019 will be substantially higher than market expectations due to the combined effects of the continued strength of the gold price, higher than expected production for 2019 and lower than expected operating costs.”
“As a result of the above 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.”
Furthermore, it is anticipated that earnings per share on an International Financial Reporting Standards basis which includes net realised and unrealised foreign exchange, profits will be in the region of US$3,80 to US$4 per share.
The Aim-listed miner is expected to publish results for the year to December 31, 2019 before the end of next month.
Commenting on the above expected results, Caledonia chief executive officer, Mr Steve Curtis, was quoted as saying he was delighted by Blanket Mine’s excellent performance, particularly in the latter stage of last year.
“The strength of the gold price has resulted in us comfortably exceeding expectations for the year ended December 31, 2019.
“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,” he said.
In July last year, Caledonia announced that shaft sinking at the new Central Shaft at Blanket Mine had been completed and the company has moved to the equipping phase prior to commissioning in the third quarter this year.
The Central Shaft project has been in progress since early 2015 and an estimated US$44 million was spent on the project sinking the shaft from surface to a depth of over 1 200 metres.
It is hoped that through mine development projects, output from Blanket Mine will progressively increase to the targeted 80 000 ounces of gold per year from 2022 and beyond.
Last month, Caledonia announced that its total gold production during 2019 was estimated at 55 182 ounces, ahead of revised production guidance of 53 000 ounces driven by improved power availability and grade control at Blanket Mine.
Meanwhile, the mining group has announced completion of the acquisition of an additional 15 percent shareholding in Blanket Mine from Fremiro Private Limited (Fremiro), taking its interest from 49 percent to 64 percent.
Fremiro now holds 6,3 percent of the miner’s enlarged issued share capital following a US$16,6 million gross consideration for the 15 percent stake.
The deal was settled through the cancellation of a loan — which stood at $11,5 million as at June 30, 2018 — between Fremiro and Caledonia and the issue of 727 266 new shares in Caledonia. -@okazunga
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