Caledonia Mining Corporation Plc

Okay, I'm recording in progress. Here with me, Mark Learmonth, Caledonia's Chief Executive. There's Victor Capari, who is, as you'll know, one of the vendors of the Bilbao's asset. He's an Executive Director. We've got Chester Goodburn, the CFO based in Johannesburg. Donna Roots, also the Chief Operating Officer based in Johannesburg. Morris Mason, Vice President, Corporate Development. And Camilla, VP Group Communications. They're both based in the UK. Shall we get going? So without beating about the bush, it was another very challenging quarter. As I go through these, my comments will be focused on Q2 compared to Q2 previous years. We do, for reference, show six-month numbers there, but I prefer to focus just on the quarter. So production was 18,000, 18 and a half thousand ounces. That includes a very disappointing 1,000 ounces from Bilbo. So it's about sort of 17,400 from Blanket. I'll ask Donna and Victor respectively to discuss the operational issues facing Blanket and Bilbo respectively. Pretty much saved by the higher gold price. The higher gold price meant that revenues were broadly level at about 37 million, but gross profit was substantially reduced. down from $18 million in the second quarter of 2022 to just under $11 million for the second quarter of 2023. And that was a combination of higher, very high costs at Bilbo's with no commensurate revenue. And then at Blanket, the difficulty at Blanket was largely, largely relates to higher than expected use of electricity. which gave rise to about a couple of million dollars of extra expense there. That flows through into the net profit attributable to shareholders. Instead of being $11 million profit, it was half a million dollar loss. And that also flows through in terms of the earnings per share. And critically, the net cash flow from operating activities, instead of an inflow of $16.7 million, was an outflow of $2.2 million. Chester will give us more information on that in a moment. Can we move on, Maurice? Again, so by way of summary, production of Blanket was below target due to operational issues, which Diana will talk about. I'll just draw your attention to the fact that July, after fairly intensive management interventions, July did show a substantial improvement. So 7,800 ounces produced in July, which had given us the confidence to reiterate our production guidance for 2023 of between 75,000 and 80,000 ounces of gold. Similarly, costs for the quarter were very high. Online cost was over $1,000 an ounce. The bulk of that increase from just under $700 an ounce in the comparable quarter, much of that increase, 81% of that increase was due to the high costs incurred at bill blows. And again, I draw your attention to a very strong performance in July. where our online cost came in at $715 an ounce, which again gives us comfort that we can stand behind the full year guidance of between $770 and $850 an ounce. Having seen the poor performance that Bill does, it will be returned to care and maintenance with effect from the 1st of October. So we got a three-month notice period with the contractor, and it made financial sense to run that contract down rather than terminate immediately. And it's likely we expect to see a modest cash contribution coming from Bilbo's in the third quarter as the stripping ratio falls away and we continue to harvest gold that's been deposited on the leach pad. Safety has been very disappointing in the quarter and compounded by an unfortunate fatality, which we announced next week. And so management is taking urgent measures to improve our performance there. On a more positive note, we've seen some good drilling results from Eroica, which we've been talking about at the moment. We raised some money by way of placings in March and April. And we've also started the direct export of gold from Zimbabwe to a refiner in Dubai, which means that we've cut the reserve bank out of our US. which is sort of optically very good. And there's been some changes at the board, whereas Lee Wilson stepped down as a non-executive chairman and has been replaced by John Kelly. So in terms of safety, I mean, the critical thing here is the... disability injury frequency rate or the total injury frequency rate you can see towards the bottom of that table it has increased from the tifr has increased from sort of one about one up to 1.35 1.36 now clearly we are going to have to take measures to to address that a lot of it comes down to trying to re-engineer the way people behave in the work environment we've got a clearly sets out a series of rules and procedures for doing pretty much everything, and people just need to adhere to that and stop doing silly things. And Sadama and the rest of the team at Blanket are putting a lot of effort into trying to make people behave in the way they have to behave so they can operate safely. So we don't want to see those safety statistics stay at that level. billboards is included just for completeness, but there's been no significant issues of billboards. So let's move on from that. Okay, can I ask Chester, who I'm afraid is suffering from a bit of a cold, but no doubt he'll manage. Can I ask Chester to take us through the financials?

Yes, thank you, Mark. Our revenues are somewhat down from the previous half, comparing at the previous quarter as well, that's due to lower ounces produced at the blanket, and the additional ounces that we produced at the blanket did not increase above those levels. Royalty remained at 5%, still charged at the same rate as the comparable period, and our production cost has gone up, but we'll get to the detail of the production cost in a few slides. Depreciation has increased due to a reassessment of useful lives that increased the quarterly depreciation charge by $600,000. That's due to reassessment of the useful lives of some generators, the jet flow shaft that we do not plan to use now that we've got the central shaft available. and some LHD generated has been deteriorated due to the power fluctuations and the bad power we've been experiencing at blanket. We've been negatively affected by other costs to extend to 14.3 million for the half year. There's about a $7 million stream on the foreign exchange losses. That's a 2.1 million loss for the half year. It came down from a gain of approximately 5 million in the previous half as due to the Zimbabwean dollar that devaluated in the month of June, while outstanding from Fidelity, 25%, has devalued and that caused foreign exchange losses. It's good that we do export 75% of our gold. That 75% is not subject to any foreign exchange losses. Also included in here is write-down of all those oxides. We've placed that on care and maintenance, as Mark said, and that goes about the additional $850,000 of impairment expenses, all on cash. Stats expense, the effective tax rate is quite high. That's due to the ball goes losses we've encountered. Ring expense, it's not deductible against the taxable profits of blanket and that shows a very high tax charge for the year to date. Can we move to the next slide?

Okay, can I suggest, Dana, could you just quickly give an overview as to what happened production-wise in the quarter?