Online Reporter
Business Reporter
CALEDONIA Mining Corporation has reported a strong financial performance for the second quarter of 2026, despite a significant drop in gold production at its flagship Blanket Mine, as surging global bullion prices lifted profits.
The group, which is listed on the New York, London and Victoria Falls stock exchanges, recorded a 27 percent year-on-year increase in profit after tax to US 1.36, supported by a 16 percent increase in revenue to US$75.9 million.
This financial uplift came despite gold production at the Gwanda-based Blanket Mine declining by 18 percent to 17,360 ounces, compared with 21,070 ounces in the same period last year. The company attributed the prior-year figure to higher grades.
However, the second quarter represented an 18 percent improvement on the first quarter of 2026, reflecting early progress against the company’s recovery plan.
This recovery is being driven by improved access to higher-grade mining areas, the completion of the elution plant upgrade, and the successful move to a seven-day working week, which is expected to add around 200 tonnes per day of ore processing from September.
Mr Mark Learmonth, chief executive officer, said the company remained confident in its outlook.
“With improving operating momentum, a strong gold price environment and several growth opportunities advancing across the portfolio, we remain confident in Caledonia’s outlook and our ability to create long-term value for shareholders,” he said.
The company’s cash position strengthened considerably to US$167.8 million following the US$150 million convertible senior notes issue in January 2026. Operating cash flow increased by 51 percent quarter-on-quarter to US$28.4 million.
A quarterly dividend of US$`0.14 per share has been declared.
Despite the strong profit growth, the company raised its 2026 cost guidance, citing strategic investments at Blanket to support sustainable growth and operational reliability.
On-mine cash costs per ounce sold are now expected to range between US$1,600 and US$1,800, up from previous guidance of US$1,500 to US$1,700. All-in sustaining costs are expected to range between US$2,500 and US$2,700 per ounce sold, up from US`$2,100 to US$2,300.
The revised guidance reflects increased operating expenditure and capital expenditure anticipated in the second half of the year.
Key drivers include the construction of a new 132 kV powerline to secure a stable electricity supply, employee housing initiatives, the development of the Lima plant and the K-Pits leaching project to unlock additional ounces, and accelerated capital development to open new mining faces.
Cost pressures were evident in the quarter, with on-mine costs rising 28 percent to US$28.5 million.
The company noted a US$3.0 million increase in distributions to the Blanket Employee Trust, higher electricity charges, and increased administrative expenses driven by advisory fees.
The rise in unit costs was primarily attributed to lower ounces sold.
The Bilboes Gold Project, described as Caledonia’s most significant growth project, continued to advance during the quarter.
Capital expenditure for the project came in below budget at US$3.5 million compared with a budget of US$8.3 million, reflecting the timing of deposits and staged payments for capital equipment rather than slower project execution.
Mr Learmonth confirmed there is no change to the project timetable, cost or scope. The full-year 2026 spending forecast for Bilboes has been adjusted to US$48 million from the original US$132 million due to the timing of equipment deposits.
Construction of additional early works accommodation facilities is set to begin in October 2026. The company continues to engage with prospective financing providers as the project advances towards development.
Promising exploration results were reported across multiple fronts. At the K-Pits surface target within the Blanket lease, drilling has confirmed the continuity of gold mineralisation below the surface, with both oxide and sulphide zones identified.
Geological interpretation suggests the mineralisation may be a separate system, a previously unrecognised horizon untouched by historic underground mining. Near-surface oxide mineralisation may be amenable to conventional heap leaching, offering a potentially lower-cost route to gold extraction.
An updated Blanket resource statement is expected in August 2026, with a 10,000-tonne trial heap leach sample planned for the second half of the year.
Meanwhile, deep-level drilling at Blanket has continued to demonstrate the continuity and quality of key orebodies at depth.
At the Motapa project, a maiden Mineral Resource Estimate is expected in the third quarter of 2026, following encouraging drilling results along a six-kilometre strike of the Bubi Greenstone Belt.
The company reported a record safety performance at Blanket, with 395 consecutive lost-time injury-free days achieved, representing the longest such period in the mine’s operating history. No lost-time injuries were recorded during the quarter.
