Caledonia Mining (CMCL) 12 Aug 242024 Q2 Earnings call transcript

Yes, starting, yes.

Okay. Well, good afternoon or good morning, depending on where you are. Thank you for joining this presentation to review Caledonia's results for the Second Quarter of 2024. I'm Mark Learmonth, Caledonia's Chief Executive. Goodburn, Executive and Director. Chester who Victor by another is joined our also CFO; Gapare, I'm James traveling somewhere have in should joined Zimbabwe. us, but he's communication suspect I he's -- he's And got got suspect difficulties.

a we Should presentation through. -- got Okay. relatively we've to short run

performance. Chester, an as very So was down, through the overview. quarter. and up, you'll costs Production a up, that you [ Chester's could financial move flow-through, ] see rights into strong driving of price all it, excellent It the gold

of comfortably XX,XXX terms second the achieved XX,XXX produced ounces of under In the production, just up we gold in quarter XXXX. in that quarter, of the from we

there. a substantial improvement So very

Also ounce, it it And project, below we've economic fact XX-year a life. the this underlying All-in preliminary although has it. sustaining which over for of we will focus presentation produce an already highly strong Bilboes got the of reiterated published a during assessment because that million the sulfide ounces not mine At quarter so a economics. cost discussed cash generative. some length, very X.X $X,XXX

our also means we have life for reserves very doubled Blanket of of years, is -- position and based XX our which nature. resource of reserves. resource a Mine, we a which healthy addition, In effectively revised Blanket a our our doubled reserves on by that base, published now It mineral estimate mine a mine out beyond for

gold but business not a internal It's was we've of grade, XXXX, plan worth just our to going life plan, is now includes very higher well, mine the which increase result more that got significantly the also on Based of healthy. as mine forward. underpins tonnes, in noting which inferred life also ounces which some of a resource out

in payment to line to purposes, rescheduling bring dividends our administration, financials. this it of Board that and quarterly administration, the that. it processes for and may administrative hence, of the MD&A else approve in see the else, you purely from it matter -- we're quarterly the apart morning, Just quarterly in release the we you of published if nothing the some nothing -- just and to review a there's with as news the declaration It's

Okay.

just as stable safety. So quarters. of results to there's the and continues we pretty terms to more summary, it be of can in been turning that management Clearly, it's has previous in the focus, this same area much an but always do,

the mentioned, quite I know, As is price as all up higher. production we gold significantly. Clearly,

$X,XXX the than ounce, exactly an $X,XXX higher realized substantially the in we So comparative quarter.

flowed in All of over just a quarter. increase through the $XX that to million for significant revenue,

nearly profit attributable earnings an for $X.X million quarter. loss more loss see compared of the you'll quarter, then to net to $XX as to shareholders, quarter per million which increase $XX million in online moment, doubled, in flowed a up that through approximately gross than that increase lower significant And costs in nearly the to means in $X.X corresponding a was a million through profit share. from And in that the flows of to

milled development and communications has used I'll grade Unfortunately, us. slide times. that recovery. issue. Craig and long-term This we'll a to going produced terms move we've ask just in now was of I join ounces sorry, It think James sorry, he the shows forward is -- -- many tonnes

efficient slightly everything of recovery XX.X%, at of quarter, remains or the during terms very through XX%, grade better pretty planned as better went and And that sort in then tonnes, ounces. flows into much better the better than

see and a was quarters. that we good can a to hopefully, quarter, So nothing in funny frankly, It there's of explain repetition here. solid future

for that detail. more run Chester to financials could the ask Chester, through in bit of do a please? I'll us, if some Okay. you

Mark. you, good to quarter Very shareholders. our results pleased and Thank these Yes. share with see

were That's as we've at of received. higher prices is account as Blanket, to consolidated X% quarter. well Royalties as XX.X%. up, remained revenues. a that gold from down Our additional up costs the on in ounces online of flat cost the per higher on Royalties revenues that's to in And our reduced in absolute it's Production revenues. ounce $XXX terms, at $XXX previous due basis.

year comparable our by good was to And gross XXX%. foreign losses. due up replaced And increasing losses. That's lower from been It should lower increased ZiG it costs this that continue, has exchange see base. April down $XX should due was to foreign on has good are to of by profits the so exchange we see $X.X volatile was that our the Depreciation the exact X quarter. to RTGS Other far million stable. by million see that also cost more

rate. XX% Our effective to our of reduced net That's XX% interest -- That's to tax group. X-month proportion less finance the of produced good That's $X.XX to to cash and in due between space. EPS expenditures. the in of our up cost It adjusted also tax expense profits to was And for is due higher nondeductible $X.XX of additional quarter. the the the to EPS in is all normalized and lower. charge. see our That's

that. online some create power limits demand online due some balance. should reduced to labor use the when efficiencies with to budget is also in that. maximum and to by cost But come seeing has our maximum our in that correction overtime down due higher come working factor Power Bilboes looking demand labor consumption to Looking comes got the cost charges. at to electricity due significantly it that's of equipment cost Power on help We're the of charges basis and XX.X%. the we're succeeding an higher and our day, times cost certain production power the on Oxides are and some up. That's down. we We've consumption. That's on mostly

due a This consumables is time consumable a lot But at you inflationary to by curb actually globe. I costs down Blanket, we've of and the practices. that your see good pressures X%. across see was pleased and procurement see to coming reduced managed to you the quite where consumables our increasing

generated On an due other our down. that's revenues over that mostly production We maintained guidance all-in costs $X,XXX And per quarter. higher would the we've costs, the in per royalties, $X,XXX per to cost, due guidance sustaining and, what $XXX we that's to coming $XXX be online online maintain ounce. at and that come costs you'll the between down cost for ounce see sustaining to also ounce and all-in

more we at good to it's costs producing So ounces are these also being in check gold while prices. and see our record

That's million us to $X million expenditures a of down. the and acquisition Administrative to million steel, to finalization becoming route multi-asset producer. complete of Bilboes million en see good expended the last that the we X that ounces going expenses $X due -- X resource of reserves are added to group, sulfide year gold to but approximately and it's

also those has as to and some cost feasibility we've increased, the to for We've employees by drilling. reallocated those Motapa oxides' also was expenditures. resources resources And Employee about that's of and over moved $XXX,XXX operating previously those that accounted the study.

our costs good it's strategy spending to gold some of So producer. becoming of business multi-asset and our furthering a see

that's increasing. see being our over generation any cost to more in we've Revenues the $XX up, last over it's down quarter being in million generated than good just We've years. quarter. X cash and in generated check, And the

generation. on we've the cash net million really last basis, So overall, of X worth good And cash $XX.X a added months. during

pleased with that So cash comes I'm the already and these results generation with that.

you, Over Mark. to

and quarter. for focuses mean Okay. resources. the presentation this of the the also the work the calls results at in on Look, Bilboes reserves We've PEA financial upgrade in separate I discussed and the

really, are to talk easy very So quite these good, clean, results to. very

Also to our XX,XXX immediate to and the targeted production completing run sulfide the feasibility In thereafter, are good project. making on study similar respect progress ounces year. Blanket levels strategic And terms XX,XXX achieve of between range we of XXXX in our from the then for continuing focus, of onwards.

given will of high capable that being And such are we're funded it that the quick own we're in we a capacity work of debt. funding high by for is a our proportion margin on so be the done the debt confident But that structures project. of understanding the that, requirement funding fact that refining on and payback, Initially, overall our asset. with focusing we've of parallel internal refining

work parallel, And the results considerable period then before looking with in up of beginning we're in exploration to the exploration the the all in work the quarter, And take very of we'd X end to capacity time year. expect at It subject also out exploration do years towards a be those to so started the a significant to the will second then continuing right to quarter, that assay finished so of to fair of will exploration say third quarter. our end resource. prove get the second of Motapa labs, at about Motapa, is initial it's prove far, it But Motapa Bilboes good. is terms of the behind sufficient of the that

typed don't brief questions may it we typed, question we it's different that, which a prefer answer that really questions. with point. presentation, that, the think I answering. up we with from actually slightly question is a you to but So the and on open it's nuance wanted risk understand We'll they're spoken. Typically, a If

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Nathira you ], [ are unmuted.

hear right. Thank you Can you. me? All

Yes.

selling wanted in the Okay. in, manager the to going term? to And the in few will what I the I've if long mean in continue BlackRock and been been that out noticing to the U.S. an there's I increase a BlackRock's the is with stake find shareholding think, of past months asset increased their company. your company significant -- stake Caledonia company over

is we're clarify manager fund. passive participation something that Caledonia in not of to a as BlackRock's -- a Just

index investor. So it's an tracker

called Index something Russell means XXXX the the fund, tracks the in a which we're index, that BlackRock That So States. run United okay? in

that there to companies, us XXXX, fund from And shares have actually BlackRock in our to our aren't -- sure time that And any, make if is other so to weighting the what underlying depending index. mirrors than sell time many Russell shares whether index, because of and the overall they buy on the the gold to within the companies. buy the in very have performance

that's the first So thing.

market buy managers. capitalization They're have up, the portfolio. not that our goes shares they'll as see to typically, in purely more to the They're Caledonia weighting passive of active increase overall managers. you'll And

selling our issued shares. and They're There cap typically where -- falls, shares they're market. sell only market them. having to when Conversely, buying shares in not the they'll no is

Does So I hope answers that that question? the answer your question.

Yes, yes.

Okay.

move typed see I I before a on, question. So can

billion the CapEx Phase Chester, ] in spend revision Tailings upward to ] 'XX. planned million [ planned you -- Ib CapEx Modest got X.X increase answer facility expected in against able to in the that? I've able for the $XXX,XXX XXXX. a led you QX What are detailed [ are to for question,

comprehensive implement Yes, underground. I pneumatics to to It's just the as Blanket a improve planning am. we're

Okay. this water And the second part question at Blanket. to of relates

aren't season big shortage normally For bad -- who from rainy water. of those a and very, is in last And to sort Zimbabwe drought rainy extremely people so the February. there is last very The poor season November Zimbabwe, a situation. was suffering of is

relates the what to Blanket. shortage on that question the water impact has of And been

Tailings we can say effects facility means the One That's underground, therefore, Tailings one, the than much means of from facility facility water aligned new and water that that is into unexpected Tailings -- the the the Tailings escape it old to an happy the ground. was that welcomed the it but that of could recycle the used it's thing side doesn't percolate the one unaligned to first which very from because facility, goes I'm now we more of into say. which to the water

next consumption. Second expect course have And -- the the time the has and we're or the to the taken the released been at water next to over we to into any we measures is reduce Blanket adverse that we dam being, not season, are see don't water moment, before rainy thing for our get upstream. we of from -- consequences. But seeing

other sort as Clearly, risk but and if do could renovated, disappointing rainy of again, them is as one last the we for not we boreholes, and recognize. have season got that the we've is cause going look word, a difficulties. -- we've it which season, may right it is that but what's upcoming We boreholes, rainy the

a playing grade year. Blanket range profile see XX,XXX. lower years how significantly profile above XX,XXX I question, The Blanket don't comfortable giving has been production further the has Blanket. XX,XXX than in One is for grade it grade I'm previous is in the as lower improving. but ounces been getting at to of previous guidance is than out in years. at Blanket it is The

as to Blanket the year. grade producing give The above really guidance a I range we -- a see hand I will that ounces think someone But I got can't move it sorry, improve XX,XXX can Any be -- forward. substantially will up, Camilla? --

a people with hands There few are up. their

Ian Joslin, unmuted. you're So

About foreign earnings that this adjusted which incurred. are these earnings Obviously, won't you and role something that the and expect between says briefly the normally EPS. minuses the earnings exchange, pluses or it and is would one-off is you IAS the EPS in the plays are mentioned adjusted -- adjusted difference be

relate just out And of your to that the it made you part you But presentation how that your lose the you on volatility I can systematically FX. put as currency, when you of stripping to a of comment tend implied wondered basically because money reports...

very have has now be the actually formerly volatile. we the clear, very let's ZiG, a incurred, it's Zimbabwe That's Historically, question. currency, fair been Okay. RTGS,

millions Historically, dollars foreign quarter, tax devalued. substantial Chester, tens it I incurred actually was think, the of where like of was we -- deferred exchange the year had X X up liability very There gains.

we as And dollar tax smaller, in the the had tax terms became so dollar liability -- a as gain. much

so started the fun been to have of initially, was that we was would -- -- in misleading. whilst And that great adjusted keep it thought calculation, EPS kind it we

management's which initially, and adjusted try went EPS were into to So outside things remove like we that, control.

quarter quarters, losses. of have that we exchange quarter substantial year and in reversed first particularly the year, X foreign last correct the the the second to this in extent, lesser this You're our

first loss So million. in in exchange quarter RTGS loss the second $X And because was million. the the the incurred the was Xth was exchange the on clear, $X In of days first be quarter, the foreign trading million that April. was in $X foreign let's the discontinued this quarter, X year loss of

at X the incurred was million the -- first year. $X in the that So days of

then, an ZiG, been it I Chester, foreign immaterial, losses the correct, it I mean a Is clearly gains will the way, continues much, if introduction of will it of don't accounting I become not note will But become, every there has XX.X. very it less like is incidence if Since -- with exchange full a on exchange such the basis, reconciliation in is this rate And official stable. and say and become okay? factor, disclosed a in, think, noticeable much that quarter, XX.X? the

the in yes, XX, MD&A.

between the and Yes. EPS. In MD&A, you'll see a EPS reconciliation IFRS, full the adjusted

answers your So I that hope question. does

it out you've elements will sheet -- I was just tax. I -- different affected mean, I your ways, mean, you that with in sounds on deferred your clearly, as pointed be balance got different

devalue it run about whether money obviously all will intends it's guess is a or the whether currency. firm policy try the in to to government it back what I Zimbabwe has to done historically

Zimbabwe done the over with the devalue has And past, to it as less Do this has nothing asking think in is you. turned ZiG. I'm it the in leaf currency government is just a opinion, new of you an the to likely

[ the ] losses refund sell that sort come other me we transaction. proportion the we to after give of The local elements Let the of is the balance that the that. to week cash component RTGS are receivables, is date where a or of exchange received which crystal the our which revenues, so of foreign -- the and rise in then currency of small the relatively sheet And VAT.

exchange things of that So it's foreign two those both losses. drive

repeat the of Bank Bank, repeat. give the Reserve going the with to with incoming we're that in stand whether Governor Finance clear RTGS, very end behind changed the confident the is all to I determination representative the the is permanent to currency. that mistake all whom of And of to I the as not. the new or the Deputy with can of same they're March. of had make broken can't having you Reserve the X Zimbabwe view of All a can Governor That's at there the I with a I conversations Minister Harare, IMF not the

No, understand. no I

Just think. what a on view you

-- the government currency as the help us. anybody, collapsing forget, of help ends well. Don't the And doesn't tail up chasing nobody doesn't its it

maintain everybody's Governor currency various that. the absolutely So and say. interests -- I the in and of government to it's Reserve stable maintain the Bank seem a to and the all That's determined can

of VAT was with coincide And the currency? refunds do collapse the timing you the -- of to think those the timed

think don't so. No, any blow I not No. we've seen out.

seen sort of we them. untoward No, haven't any lengthening no. haven't We credit, no, seen of

either. the You timing it don't see

between of XX curate couple those our and ], and so for years. are doing XXX very they're last timing VAT [ during it's and been days, receivables Our of days, the

it's been refunds. in So constant of we how receive VAT those regularly very terms

the component shorter, would and one, bigger XXX people would I that's payment short be isn't to of that, that. of hate more that's for The days Chester, revenues, one think volume that's the RTGS got much the a that's -- our much

Yes.

XX X a And bullion hovers the gold Fidelity. for the sales. strong For receivable, to just that we at XX% portion it between of receive delivery that's days our

in to to portion, standard have is that's requirement you for sell, you And Okay. it? do, a that

relatively sell we to gold offshore we recent is government. balance, export we of XXXX. ability That sell have only development. April The XX% ourselves, and in doing for XX% export that the actually we Yes, remainder, dollars. started something to to is The our a

well. over and a extremely year So we've that now, been just doing that works for

days X bars of XX%, a the Monday the nicely. a we of of revenues a and very morning, of and it that on works bar say, several day later, get day, balance sort XX% deliver gold or Dubai We'll gold into

question ]. Nathira I see [ from Hand up. a

just I'm There's unmuting. Nic.

Okay.

not an really that XX. and market that between a starting XX question of suppliers trading this but earlier is parallel was to an to black a Does I It's develop? are ZiG's indicator that see obviously, are skeptical observation of question, future ZiG. Ian. a there it's early -- about the follow-up your question robust the And Just by now market this

about just Nic's mean I Victor, an But sorry, with help Nic, our that? definition, that. I I of that do you you foreign is, to Victor, market, Nic are want talk -- would say illegal X, to by exchange clearly, would able question. say visibility

as we gold Yes. our or of Thank one, the Caledonia basically, sales. what we Number XX% the government just production Mark. Nic, Zimbabwe let's you, ZiG do. for I on from mean, our focus get

with basically are of it the So is what government to have make because the we we do place bulk which to paid ZiG. in we that payments it, to ZiG payments make set government in has with

that a balance, amount, terms buy very is the local actually The are you basically, So of making we which in rate. products. exchange small

we exchange about So we or that. what's when visibility, would in have see much don't something we don't the maybe say ZiG on than when it visibility parallel We this talk don't We -- feel don't on terms that we that having happening the of really stage the other on at much. like devalues comment couldn't I that losses that. so officially market,

Victor, to the just into put market could government recently. you the Sorry, took measures the about talk liquidity

Yes.

foreign or is We Because pressure what did market, right? say that ZiG about I about government a and market was into the some bit actually think currency. is the ago. there they When basically releasing backed X USD by Okay. about gold the on of see so million XX weeks it's

of the get have pay did gold they of gold, converted gold, they they also producers are keeping, the they so XX% The reserves. can they gold currency, So money is we give and this, other have. We which the which in pay. they out royalties and the it physical which them all

the going is manage doing the they're market the is present that if what think ZiG actually they sense money in they're it onto through on releasing They're bank [ the it's the So to ]. reserve market.

the So see the coming naturally. down rate -- currency you

your if the able ZiGs U.S. an or something, a have in to currency gold want off in mean, gold economist theory. has any give restricted it. sell you take should, And get you people So of rid them the but those is theory want ZiG I whatever -- of by them dollars exchange that's backed point to you who should, which those not Until such to those the and it is, ZiGs rate asset currency, the means, is dollars, backing, strengthen. that when a supply be you money people -- to I'm behind theory, that Nic, get or the by the to so the the give ZiG

did I of Now of the my central understanding not economist, work. of of parallel and I'm exhausted recognition a weeks, last kind dollars. not an so movement in you've we -- I in release in certainly how banker, But currencies couple where I'm what saw think don't market, the the government

currency they I think are an asset-backed this of really it currency. kind suggests that running as

Okay. if Excellent. other or two questions, I may. One little

in isolated Eroica. read-through a So you an Or had Is into a mine? fall what's happening is there this rock of picture the incident? on a broader

you'll It's have was production X,XXX July, has ground an in It July as adverse the isolated fall area in back to have by been be now they're the production of recovered. that MD&A, crews And working got the We've ounces. now areas, the productive incident. affected about in all and effect will other phases. from an seen did on

symptomatic Nic. broader the -- have or not problem, of problem it's systemic So with of broader any any

million question amount lined year-end? up $XX you've Okay. And is then $XX obviously CapEx got a for by of to That's going bit million, HX. last quite to that still

Yes.

meantime, before on this this what We to the year in And disappointing seen we last beginning of will of the -- the end track slow could plans. spending terms So and X on in weeks we've this get be year. having first clear, towards a is an brakes where promises to year, the carry we start CapEx we increase movie on it CapEx on because production back please that did production the can't -- we put seen of of the production.

said, isn't this having the bitten is it will the therefore, be, defer And there, CapEx. by as not should we well, flowing year, cash we before, been that production

cash clearly, as the half Now our released of improved, year. second the will in that has planned generation CapEx be

to Sorry, of a about once one Is sell? or selling. time same enhance you panel commentary at solar -- adjunct study studies to power this this more capacity there question, you're project, talking additional Mark. will disappear the the There's the

parcel thing. and the part of same it's Yes,

the we idea in power happening, is purchase the that well, idea, that the plant it's than as a risk sell -- that have it's we will So not more same -- long-term idea, terms enjoy. we terms in we'll will is an solar agreement on the currently

the business. will building this. second addition, our is core to in construct business new someone We plants. and own a whose to running don't it owner developing need It's phase. We're not And selling core and solar

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Yes.

Any questions with decided they've deal question, try I I couldn't that some. can further it, when we'll properly. but Okay. Well, coming, hear and the see

written There some are questions.

me Let see.

is question [ here a There Albert ]. from

them. Just a working through I'm minute,

From ], [ that's the next one. Justin bearing

FX the on comment you Can changes, proposed the regime.

dealt Bilboes dollar basis U.S. will The operate is think I've Bilboes. for I on expectation XXX% that that. anyway. with

Justin, with we've with So I were that hope I question. we think dealt that. dealt

the a area out. It's has high-grade It production question issue. sorted us a or the It the running ground mine. we've of July. which dealt think so was And is been X% with dealt mine I within in about July affected, with of another plan. we're in I Again, been fall Eroica, the week last that. affected think of

it not doesn't -- impact. So long-term it's a

rate has what A rate the what you recently. do monthly inflation is? question know know on inflation. inflation I Victor, the don't monthly been

when few something. bank the been Zimbabwe reserve in ZiG has it. offices Yes. since released has actually minute the statistical the introduced -- few something has last the because actually, last months rather very they the in It was or very stable months, removed has released

it or like I So was almost like something that. think X%

a X% month?

that, annualized. than less Mark, Much

questions? Any lot you there? a you better anything than Could That's places. other do see further see Annualized. Camilla anything? of

don't see anymore. I

for Okay. the Well, themselves. look, brief, that's think I speak relatively but numbers

So released thing mid-November and results. thank you same we've for we'll do after third attendance, the in again quarter your the

for very your all much you thank participation. So