Caledonia Mining Corporation Plc

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. I'm joined by Chester Goodburn, our CFO, and also Vic Kapari who is another executive director James should should have joined us but he's traveling somewhere in Zimbabwe and I suspect he's got I suspect he's got communication difficulties okay shall we we've got a relatively short presentation to run through so Chester's driving it Chester could you could you move through the right so overview it was an excellent quarter Production up, the gold price up, costs down, and that all flowed through, as you'll see, into a very strong financial performance. In terms of production, we produced just under 21,000 ounces of gold in the quarter, comfortably up from the 17,500 that we achieved in the second quarter of 2023 so a very substantial improvement there also during the quarter although not a focus for this presentation because we've already discussed it at some length we published a preliminary economic assessment of the Bilbo's sulphide project which reiterated the fact that it's got a very strong underlying economics it'll produce one and a half million ounces over a 10-year mine life all in sustaining cost of below a thousand dollars an ounce so highly cash generative In addition, we also published a a revised mineral and resource estimate for Blanket Mine which effectively doubled our reserves and means that now we have a life of mine based on reserves at Blanket out beyond 10 years which is a very healthy position for a mine of our nature. Based on our internal life of mine plan which includes some inferred resource as well we've got a life of mine plan now out to 2041 which significantly underpins the business going forwards. It's also worth noting that the increase in gold ounces was a result of not just more tons, but also higher grade, which is very healthy. And just as a matter of administration, some of you may have, if you've seen it in the MD&A and the news release that we published this morning, for administrative purposes, we're rescheduling the declaration and hence the payment of our quarterly dividends to bring it in line with the um the quarterly board processes to approve and review the the quarterly financials it's just purely administration there's nothing else nothing else to it apart from that OK, so just turning to the results summary, stable in terms of safety. Clearly, there's always more that we can do. And this continues to be an area of management focus. But it's pretty much the same as it has been in previous quarters. As I mentioned, production up quite significantly. Clearly, as we all know, the gold price is higher. So we realized exactly $2,300 an ounce, substantially higher than they $1,949 in the comparative quarter. All of that flowed through to a significant increase in revenue, just over $50 million for the quarter. And as you'll see in a moment, lower online costs means that gross profit more than doubled up from approximately $11 million to nearly $23 million. in the quarter. And that flowed through to a significant increase in net profit attributable to shareholders, which was nearly $8.4 million for the quarter compared to a loss of half a million dollars in the corresponding quarter. And obviously that then flows through to an increase in earnings per share. I think we'll move forwards now and I'll ask, oh, sorry, Craig, sorry, James was going to join us. Unfortunately, he has a communications issue. This is a slide that we've used many times. It just shows the long-term development in terms of tons milled, grade, ounces produced and recovery. And during the quarter, pretty much everything went as or slightly better than planned in terms of better tons, better grade, that was sort of 93, 93 and a half percent. And that then flows through into better ounces. So frankly, there's nothing funny to explain here. It was a good solid quarter. And hopefully we can see a repetition of that in future quarters. Shall we move on? Okay, I'll ask Chester to run through some of the financials in a bit more detail. Chester, if you could do that for us, please.

Yeah, thank you, Mark. Very good quarter, and I'm pleased to share these results with our shareholders. Revenues were up 35.4%. That's on account of additional ounces, as well as high gold prices that we've received. Realty's up. That's due to the higher revenues. Realty's remain flat at 5% of revenues. Production costs, in absolute terms, that is down. on a consolidated basis. And on mine cost at blanket, it's reduced to $906 from $915 per ounce in the previous quarter. Depreciation has increased due to our excess cost base. And it was good to see our gross profits increasing by 110%. That's $12 million up from the comparable quarter. Other costs are down by 1.6 million due to lower foreign exchange losses. It was good to see that the volatile RTGS was replaced on 5 April of this year by the ZIG that has so far been more stable. And should that continue, we should also see lower foreign exchange losses. Our net finance costs is lower. That's due to additional cash in the group that reduced the interest charge. And our tax expense is normalized to in between 30% to 33% of our effective tax rate. That's due to higher profits and less proportion of non-deductible expenditures. It was also good to see our EPS up to $0.43 and adjust the EPS of $0.51 for the quarter. That's all produced in the three-month space. Looking at our production cost per ounce, that's come down significantly on a on-mine cost basis due to the Bilbo's oxides cost has come down. That's reduced our on-mine cost by 13.7%. Power and labor is up, power mostly due to consumption and iron maximum demand charges. We're seeing iron maximum demand charges due to are succeeding some of our limits on the electricity use in certain times of the day. And we are working on that. We've got some power factor correction equipment that's in the budget that should help with that. And we're also looking to create some efficiencies when it comes to labor overtime and the power consumption. I was quite pleased to see the consumables coming down by 3%. This is a time where you see your consumables increasing And you see a lot of inflationary pressures across the globe. But at Blanket, we've managed to curb that and actually reduced our consumable costs due to good procurement practices. On our only standing costs, that's come down mostly due to the online costs coming down. And what you'll see in that other costs would be the royalties. And that's due to higher revenues that we've generated over the quarter. We maintain production guidance at $870 pounds to $970 pounds for online costs. And we also maintain our all-in sustaining cost guidance between $1370 and $1470 per ounce. It's good to see our costs being in check while we are producing more ounces and also at these record gold prices. Administrative expenses are approximately $3 million down. That's due to $3 million of expenditures that we expanded last year to complete the finalization and acquisition of the Bobo's sulfide steel. That added $3 million, 3 million ounces of resource and reserves to our group. It was good to see us going en route to becoming a multi-acid coal producer. Employee cost has also increased. And that's by about $500,000 that previously was accounted for as Oxide's operating expenditures. We've moved those employees and those resources over to the feasibility study. And we've also reallocated some of those resources to the Matapa drilling. So good to see spending some costs on furthering our business and our strategy of becoming a multi-asset gold producer. Now, with the revenues being up, costs being down, and in check, it's good to see our cash generation increasing. We've generated just over $20 million in the quarter, and that's more than we've generated in any quarter over the last two years. So really good cash generation. And overall, on a net basis, we've added $12.8 million worth of cash during the last three months. So I'm really pleased with these results and the cash generation that comes with that. Over to you, Mark.

Okay, well, look, I mean, this presentation focuses on the financial results for the quarter. We've discussed in separate calls the work of the PEA at Bilbo's and also the... the upgrade in the reserves and resources. So really these results are very clean, very good, quite easy to talk to. In terms of our immediate strategic focus, we are continuing to run blanket to achieve our targeted production range of between 74,000 and 78,000 ounces for the year. And then thereafter, similar levels from 2025 onwards. Also making good progress on completing the feasibility study in respect of the Sulfide project and in parallel with that we're refining our own internal work that we've done on funding structures for that asset. Initially we're focusing on refining our understanding of the debt capacity of the project. But given the fact that it is so high margin and has such a quick payback, we are confident that a high proportion of the overall funding requirement will be capable of being funded by debt. And then in parallel, we're also continuing with our initial exploration at Matapa. That exploration work started in the second quarter, right at the beginning of the second quarter, will be finished towards the end of the third quarter and then subject to the capacity of the assay labs we'd expect to get those results out before the end of the year. It is fair to say that the work to prove Matapa is about five years behind Bilbo's in terms of of exploration. So it will take a considerable period of time to do sufficient exploration at Matapa to prove up a significant resource. But so far it's all looking very good. So with that, it's a brief presentation. I think it's on point. We'll open it up to questions. Typically, we prefer questions, you know, spoken. If they're typed, the risk with a typed question is that, you know, we don't really understand the nuance and we may answer a slightly different question from that which you actually wanted answering. So please, if you are able, if you could just open the line and ask questions verbally.