Earnings call transcript Q2 2023

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Mark Learmonth

Okay.

On the call today with me, Mark Learmonth, Caledonia's Chief Executive, there is Victor Gapare, who is, as you all know, one of the vendors of the Bilboes asset; he's an Executive Director. We've got Chester Goodburn, CFO, based in Johannesburg. Dana Roets, also, Chief Operating Officer, based in Johannesburg. Maurice Mason, Vice President, Corporate Development; and Camilla, VP, Group Communications; they're both based in the UK.

So challenging about quarter. going? was bush, get very another we without the beating it Should

QX do, As my there, the focused to quarter. comments going but will years. I'm to focus be on go I prefer QX just six-month reference, show for through to these, previous numbers We on compared

operational So ounces I'll it's the so from Blanket. facing from ask to XX,XXX and issues about That respectively, a includes Bilboes, ounces. was and Bilboes, production very X,XXX Victor, Dana respectively. disappointing Blanket XX,XXX discuss

just Pretty high substantially much second the $XX revenues level, price. $XX of saved by XXXX. under of was the quarter to the about down reduced, high were $XX gold gold A in million million. at profit quarter million that for price gross from The meant second broadly XXXX

And Blanket of that costs the to dollars expense of million with no very at there. relates of revenue. electricity, extra a at couple gave largely difficulty of to Bilboes high Blanket, was And use which then combination commensurate at about higher, a rise higher-than-expected

us net activities information cash net was give flow earnings attributable million. on instead the That moment. it critically, inflow also into the through that that a loss. was of being from -- $X.X profit, And profit more flows $XX.X million And of to shareholders: $X.X an will Chester terms million, flows operating in of in of per $XX an through share. million of the outflow instead it

will interventions, show to after Maurice? fact attention just was at fairly operational on, to I'll July, the which that substantial production Dana intensive draw Blanket about. And Can -- target Again, why did management so talk your we July improvement. due summary that issues, below move

the X,XXX to produced has gold. of for guidance July, ounces XXXX ounces us XX,XXX to between given XX,XXX in our confidence reiterate of production which So

increase, draw an an incurred a again, XX% came $XXX that high. of ounce. which behind comparable Similarly, performance the your comfort was gives attention cost again, of $XXX increase, an stand an ounce $X,XXX in that costs in over at higher the the of very we was that to The $XXX increase, from costs in for of just the bulk us Bilboes. quarter, where full-year July, strong ounce, On-mine ounce. much due cost quarter under at -- on-mine the $XXX between can And very I'll guidance and to that were

October poor Bilboes, to be seen performance and X. at will it returned effect with care Having from the maintenance,

with to in Bilboes made cash pad. we immediately. and got we likely a run deposited harvest the period the it as been it's away we three-month stripping on quarter, the rather third to ratio contractor. see financial down, falls a the And notice to coming gold contribution modest terminate So sense contract that's expect continue that And than from leach

been fatality, has disappointing an in and announced the quarter, very by Safety week. which we next compounded unfortunate

is taking to urgent our And so there. performance management improve measures

moment. from John And is, Kelly. drilling export the note, We April. where cut US March we've going about Zimbabwe which which Wilson to placings the gold at in raised optically, also which Board, we're refiner replaced talk positive a changes of On a from a seen been money direct by in stream, more to revenue the of of out good our as Chairman, in we've results we've way started sort and Dubai, there's means that has stepped our some Leigh down good. by some And Eroica, Bank of dollar been some Non-Executive Reserve very and

frequency frequency the is rate. rate, brings it disability of critical total mean, the home safety, of the -- terms I injury in injury is sort I think what or here thing or So the

bottom see, has increased to from sort X.XX. that the X, can -- it towards up You of X.XX, of about has the from increased TIFR table,

going clearly, measures the the to that doing of to in things. to take clearly to and work that pretty people environment. Now set for behave way are just and to a down We've have to to people of to need we series trying address re-engineer and doing it a comes much everything, got adhere procedures lot stop silly out rules

behave a the and have behave, way they are Dana of team to can putting so make And the into safely. operate lot they Blanket to of so people at in trying effort rest the

completeness, significant So we for Bilboes don't statistics at isn't no but to want see included been level. Bilboes. those issues stay just that there's at safety

let's So move on from that.

ask -- a to he'll financials? I'm Chester is doubt I cold, ask manage, but can a take Chester suffering of no the I through can us from afraid who Okay, bit

Chester Goodburn

Yes. Thank you, Mark.

we above the are increase due well. That's additional somewhat lower Royalty the as remained at produced did revenues Blanket period. from down the rate at bit charged as Our to comparing produced half, at those that previous X%, a same previous favorable at not Blanket, at the quarter and still levels. ounces the ounces

gone but the slides. a in to Our few has get costs cost we'll up, production production of the detail

use, to Depreciation due that lives of whichever that put depreciation reassessment the generators, were of we do And scan by but control useful reassessment which $XXX,XXX. increased, the to that's plan to we available. has lives, now a some the not increased of quarterly shot, due useful

been other And being we've the due at of bow] some It's year. $XX.X experiencing to [bow million Blanket. and to [bad the by the LHDs and affected been generators extent batration] for negatively costs, the deteriorated has half

in a exchange $X.X approximately It swing million million $X previous half. There's bar came for from here. up a the gain about That's down losses. a of foreign loss million the $X the on

in month devaluated Zimbabwean liability as foreign Difficulty] did caused June, exchange while As between that dollar, the the [Technical and devalued, that outstanding of X% is losses.

Bilboes on the Mark additional right that of we've we do our subject as here, XX% the all oxides, part exchange that non-cash. down That included gold. impairment is about down not here foreign $XXX,XXX to good of Also said, XX% It's export expenses, any placed losses. it's maintenance,

Tax kind move the is of that encountered, of to those due taxable very expense, a charge -- losses the next shows things and quite rate redactable, high to we've tax year the Can date. that's high. for means we not a profits tax Blanket, the effective of That's to the that bulk slide?

Mark Learmonth

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

Dana Roets

is was the of continued coming in and If down [Indiscernible] can four, peaked then graph, at was down was extra grade the that and end three, we came in why quarter up plant reasons year, look last one you we of model in problem year. kind one year. and operational And and and became quarter the the two. top installed We knew or the last in period this quarter that the it money case, it see that bit, a the that of went that and

at more that ounces grade we that. last going very, buildup you get had we if one or quarter hard phase, the pushed look year, same and When in we start less to the up it and If -- two helped to we building higher to did. you're But tonnes tonnes. year, it us, had and quarter compare there more very to year, last XX,XXX it's we the last you're to were so a do

tore the GM was we And And removed. And on in were on underground a with year, managers new with to this that, or then the had we September, we up that, January changed it GM also signed mine. that some last suppliers.

So XX,XXX goal ounces, also, up. will during to anchored get this to culture, the safety

as far being lost negligent, people of job as because their some And concerned. is safety

on run development, XX that and opening down up, Now over come level. the especially to rolled with will and year, and this into you now flexibility, XX XX you level, then when flexibility on those areas, going build up our

And we out to two, when the getting especially very we with sorted some issues the be But went pushing we behind, in got operational again, issues then into systematically we get other to that trackwork, was year, places. to for the hard right those started the like places ounces. And normal that, XX,XXX quarter, quarter it issues during and higher-grade hope into as end slightly of were places.

So again, get the tonnages now. we're to to quarter. and in we're places those systematically, third us right we And which the reacted issues, we need for getting the to good stead put in

And so on track. quarter, for it's third the

when shortcuts, point up they taking big the as people push take is and that ignore not very, start well. to driver now, safety said, very as caught chances. Mark you safety they from unfortunately, hard And a view, of they standards, and achieving, they're And us

the start new the previous out because initiative. them they every the a make couple had we them out we it. Remember, pulling teams, mine, people We just with And a behavioral well. stopped taking them started understand, to quite sure talk we with that of through to and in and as team behavior on Again, intervention. signed we're pulling

And we of So XXXX again. and and XXXX, showing. it unfortunately, starting for stopped the we're 'XX effect that basically is and

So to when a around, not hard we they the ground, the a go lot of right place thing. people where supervisors to they're are get where trust can and and the work into do

point to for annual tonnes XX,XXX more ounces, So is view, a this at to ounces. from still of which year maintaining XX,XXX XX,XXX of that it's production lower forward, and grade,

Mark Learmonth

Good.

move production back Okay. Chester, to the costs. you about on you, we to next Dana. So talk Thank Can to slide?

Chester Goodburn

year, of seen [indiscernible]. inflationary we Blanket our pressures inflationary haven't we year, costs last Looking costs. the as increase This increase that, no, wages, on the that seen we same haven't we've seen plateau, our at consumable of mostly reflects Consumables, experienced last and year.

on-mine increases, see aren't lower and reduction so numbers as spaces. here XX% note great far with on now. great fixed to as so and on-mine production, costs to August, production are These XX% in move in cost about important and our you our there so forward, of it like can cost, July, that production short term, we has What's on but look a on our our

plant, $X.X $X.X that's due costs, and us does Blanket million savings, group it reflect level, year. The working in Electricity plant's to not from this a that solar solar saving commissioned the money perspective. well solar the the earlier million was at

IEUG, And what rate, to that agreement power, from get allows we'll the then we've and utility. us into with per start also new and initiated get hour the lower consortium, a soon, kilowatt the we

looking we're kilowatt to Our looking hour that, that. reuse at usage,

lower solar. power a you reflect than see forward, benefit we more should some from here. rate going what And should So see

care that on to placed to now Bilboes beneath fund, high the motivated we maintenance, costs for been the sulfides us $X.X a oxide. oxides, the mine to and had the that [ions]. plan for year, oxides, with million that's and of get the have be we now to cost can that's to mine And continue waste-stripping

ounce on-mine production, production the basis negatively on-mine ounce. cost our see on can affected, of in that you Bilboes the On $XXX cost per slide, cost, oxide was by per next mostly

savings solar full effect doesn't it the reflect and Our show not rate. power does the IEUG the

So point From cost cost, taking all-in the just more plan from cost expect we we trending stop reduce leakage number balance basis, Bilboes, and of cost an continue the add, do sustaining to that cost affected significantly. forward, Bilboes that on-mine forward. the produce the there's to view, negatively by not much to modestly, not on-mine improve

And slide. next the

are comparable Our very previous admin much quarter. the comparable expenses to

successful a year, the we increased of million the advisors pay Bilboes, completion of to it that. had For $X.X successful completion cost of our on the of full due some to

And next slide, the please.

And from Bilboes. Our or appear not has tax level, the rate remained taxation effective stable charge forward, view. of withholding loss quarters. a total very much point -- charge our blanket the tax from of incur previous however, least sit we a do taxes at Effective going at high,

tax prior effective and years should a in be we've quarters. range and only rate, in XX% seen forward, Our as between prior going XX%

at next Look slide. the

July. million funnel Blanket $X.X in a generated ability Blanket, million Here, you a $X shows of cash-generating. that million to can and see compares at for is shows very the full million it's to from is running still asset, the We generate generated flows. very That group cash. it good And quarter that quarter. the it good does for flows. And Blanket's $X.X cash across $X our when cash that so we produces steam,

of for outflows to that payments. $X capital the working creditor legacy quarter, Our was million due

our capital $X pretty bonds, in and QX. to includes investing And that's in of and dividend spend. solar payments activities, related activities the QX equity the and and that issued net bond financing we net the year. We'll expenses latter raises, million some for catch Our the part million for much $XX.X up of settle capital

Looking at next the slide.

months, quarterly cash the the a for expect, We due on down come XX and in to has had bond. acquired. that balances, we've cash spend we also Our to that position we the solar as next X purchased That's solar money We Bilboes to paid the on basis. assets to bond. Maligreen, and all the holding improve,

[indiscernible]. continued any normally, from surplus balances are up not building cash RTGS and we Zimbabwe Our

Look at next slide.

doesn't said to It big improve balance Our there. we balances of acquired. that there balance changed acquisition our on story be going that new -- due And foresee the all cash should for aren't we've paid sheet has sheet. mostly any to now now the ratio Bilboes. I've our forward, we assets

Mark Learmonth

you, you, Chester. Unless Good. Thank thank --

as strong So month. I've July mentioned, a was

year. the just is July an to on-mine cost a a about information of was the per that X.Xg/t; over producing $XXX the X,XXX grade approximately annualized here's gold of gold comparable relating to recovery, just ounce year; of rate an equates last very in MD&A: $XXX, ounces XX,XXX ounces XX.X%; So -- competitive with at which ounce is

be July half we move the much a corner, on? we first looking hopefully year, hopefully, Could So the for half the should shows of that second we better year. turn and

on, suspend production. several We'd the we we didn't time ago restarted ago, because the January. exploration the at the doing as to development had exploration and deep-level have just capacity in same deep-level underground do few all weeks drilling Early a years to logistical

platform having the the out now the we've mine So capacity excavate, for commissioned, drilling then create cubbies, to Shaft got which deep got drilling. Central just

It's that fair currently, the we've targets. got of two to -- exploration say

much and on area of Blanket. target now, We've we which side the which reported, say a grade majority of mine at on substantial upside, other in a at -- and that the summarized But here, first supplies the is of terms holes very got on it's just The also, started Eroica at the is Eroica. second results to pretty we that fair in width. the

statement, be of at and access the we hopefully will assessment, what towards And the course, call Blanket. the impact reflect that we've Motapa resource from will can we're the drilling increasing end an year. year, the infrastructure results, existing the Motapa, mine, which life able be that a on the we environmental commence due will we extending of new to amount of of means that better terms mean that in submitted in material later invasive At and at the expect of activity we the in the going to

going with is on to an increasing regulators ESG. The ESG to now is that SEC evolving. be investors. say dealing and that standards involved; hear by environment get It's becoming accounting area of fair focus regulatory apparently keeps the going we to there's

So with are is put our in objective place business sustainable to practices that aligned our corporate strategy.

but have we ability, do, of to have to do. what do we'll to of So the best blazing not sort We'll we we're trail. a what our do

specific from published that of provides power. recent about summary, out with just of in which average terms plant, just sets information most involved at in Blanket's place put ESG lot the report, about perspective, a our level. a social We the projects daily an which solar XX% we've environmental a of But we're

expected, we'd is slightly very than good. I works better think which it

tailings We're exhausted. tailings existing is facility much currently constructing the facility; a now new pretty compliant

year. about production going -- has expense facility, years, and because $XX few be a will us new And years. and That's XX to XXX,XXX a plastic. the double-lined it XX the which about million over sort a the to tonnes clay spend is So rate with putting to next that of that of we're support in of for next is

got but then -- expenditure, that, and in upfront through So it's it. once the built we've we're

The of the its terms local paid In ownership, social, XX% us. the including loans and outstanding to employees got we community off community.

substantial Caxton our Mangezi, VP picture in over the Now, people. a check to there handing local shows Zimbabwe, the

move -- And there's requirements, we're in of to terms of the jurisdictions. we're very, in relevant in sort we report. all where you, this be think we ESG interests need with the I compliance. the of I area governance, And terms If of comply information loads on? Should

XX,XXX ore to of drilling so to our we ounces. initially, a decision at the if the for we as upgrading Okay, to at XX,XXX thereafter, to we the Blanket make is course higher and getting outlook, terms Blanket range can then looking sweetly of depth, in how then targeted do to commercialize it. achieving focus, with maintaining continue running existing then resource mineral deep-level and extensions production something, of due a do bodies inferred a objective, -- level, confidence find again We'll which in on really,

commenced optimizing year. the expect value present We've the feasibility work share. a we're start on Caledonia we at and the Bilboes, said therefore looking for growth exploring uplift studies we dilution, and as at before, we Motapa how I've minimizing later hopefully, balance also in And to with I'm saying net can

presentation So I finished. that's formal the think

questions. maybe to we Camilla? this So can open

Camilla Horsfall

Yes. a hand? just question, to can we If I ask you raise [Indiscernible] can And you. anyone has your unmute

Unidentified Analyst

me? you Can Hi. hear

Mark Learmonth

Yes.

Unidentified Analyst

had that cash disappoint, scenario the So I at the policy. what the where production would a and $X.XX In maintained a just that question continue is regarding to share? per dividend that likelihood be

Mark Learmonth

one the requirements the terms is, very question, Well, the -- what Bilboes? do do we substantial investment in the for other dividend that's of question to

Unidentified Analyst

Right.

Mark Learmonth

is pay also, we always forward, it's our we've And not is capital whether dividend to depends dividends thing allocation. continue again, And said we out to the dividend, to fact but that as really pay on our that just policy fund view given pay money it have to we've that said the maintain a affordability, about is the the in you we project. money dividend, the to Bilboes to raise right go do

Bilboes. relating work doing to all moment, of that's to So at how we're the commercialize that part and the parcel

Where would weren't you pegged that our always started formally -- to dividends performance. was from, the we idea

that. was profit this, As a aware, well, therefore production, in QX, the eight never we probably said, be is dividend quarter's quarter's you'd quarter, a

Now, we did that. never

given performance improvement the see right be canceling between for reason fund itself would comes was dividend. the fact to the not issue, a clear now, Bilboes. two. in we correlation really, there bigger operating we're to can that And how frankly, going The no So a substantial

Unidentified Analyst

questions, I just more get have few through Great. can a I those or?

Mark Learmonth

yes, Yes, yes.

Unidentified Analyst

Oh, okay, cool.

part, the the like, like, No. electricity systems. Can some in and X. at color what some Central of the was, add Jethro ask I is Can stalling old the problems extended with you commissioning there because Blanket maybe transition of of So costs in MD&A, Shaft? saw, that? use rose to I to power

Mark Learmonth

that you Yes, would up? to like pick Dana,

Dana Roets

as waste of year, last compared doing It's in year And actually twofold. by mean, the through Central Shaft. our will a started Central at through well we year, year, X at Shaft. end the the man, we reef end I of -- equip reefs of and this did Shaft will is the the Central go the When Central to only XX% we Shaft. beginning, through go XX% Shaft,

during migrate having Shaft going put, you the won't will working knew capacity, same basically, development. lot time, to white method, then that you of meters. we two to three a as years, a the still as late same the Jethro. investment. the at X XXX to there, But We Central sinking areas above next -- we towards Shaft standby Shaft, And with of the over find shaft, our were will a Central target on almost there's That's mine and had the our be happen because return

now, there that XXX areas And work we're as we got that's invested and sort up, are bonus and above areas. of meters opening targeting more certain

the will we stuff where X life, certain meters, take, than can you Shaft, side, point have can get like might and Other for of go XXX areas, through Eroica reefs meters, extra take trialed bit about X on can extend there areas Central Shaft. worse extra resistance actually the you through a a we Shaft. that find we we because the only work XXX are example, which to the above stuff already So

to not So that's when stop when We'll X we as going to why explore pin going Shaft, we're more. it's on stop find the what Jethro. we're clear-cut pull we

and started drain had last was a this we when to solar, week, we even it lot rain year, of tanker. this also, And a year, the with

better we that So electricity it's of And get from year, well. feel will and generate our better can budget a get initially, for bit solar with for what playing it hopefully, a solar. the using havoc we we third as

Mark Learmonth

performing quite that doesn't on But when cloudy What in those is days, days have saying solar general, and work is well plan. solar in Dana's days. rainy you

Now, in an Blanket is [indiscernible], in sunshine, is area afraid. raining Blanket of but in good pretty fortuitously located I'm August

week. Now happened that's what this early on

Dana Roets

throw then drops, forward, generation conditions, when we're And as And battery overcast the of got to -- solar then answer run the to I stable. that supplement have to over the keeps mean, when your and value solar. long to come couple clouds that a to get you that generators it going power afforded, you've is

Mark Learmonth

So We'll questions? if you had some -- further turn

Unidentified Analyst

I No, did. yeah,

get just to me them Let here.

infrastructure just have of, the okay? -- somethings some seems just that to issue growing about a I clarity underground issues It of seems job capital like addressed, but it this. like, wanted ask issues human of needed, there some some seems expertise. to is training, like it were So been like, or, like add you technical is lot skills, Can that it if the

Mark Learmonth

Dana? Yes.

Dana Roets

you if workforce a experience. stable, we -- it sign that as very growing lucky were up, was skills. at Blanket, And very stable, look building and on to started of had we at new and We lot the

new great fit. people. you always sign a new that's sign person you a is danger when Not Now, on every

fit: So strong and be the you've what that, [proclive], And also, correct will and allow. you've not want very to in, a you fit people got will some with you to that got vet culture some on to don't. allow

have saw that get now. about during do XXX get of of right, get actually we well-experienced culture we people where we But years, to get fitting grew that X,XXX last allow. what takes we we get And and a people way And people. our -- people. up and you've getting experienced building managed than very, actually with two more since And on the because to that culture our then in that currently, the stabilizing got people started work people, things the a we workforce to and the people And was very it and into workforce. got what building was we got of kind younger about, by some a And quite out also we to year stage point that, benefit mix explained because the old. actually includes to good of lost very I up

when So people you've sign and to get way positives everywhere them but to new things. negatives, you on it and you and got into there's and culture want train you the right see coach do to the

Unidentified Analyst

Right.

I Okay. think, questions. two I just have, more

so sounds the Okay, that a bit little is, similar gives an with first be better phase, that the this to you confidence, it work Motapa, accurate if Bilboes And around? it first Would time what phase. or? characterization, will it

Mark Learmonth

Motapa, Well, when for oxides saying? hunting that you're we're what so going to you is say, go at

Unidentified Analyst

Right.

Mark Learmonth

may not actually focus just we which hunting actually oxides, first sulfides, core go acquiring in Motapa place. Yes, on decide experience. the the is the We given the for for actually reason to may

Unidentified Analyst

Right.

Okay.

Mark Learmonth

Certainly, of you we the much. don't want at what oxide a thank very project, repetition Bilboes experienced we've

Unidentified Analyst

Right, right.

unclear one last I'm just something on. my then maybe and Okay, that is

FX said MD&A, to was losses two SGR. settlement like, was the So RTGS Like, it in due of receivables. were was the a it then weeks, your receivable the settlement part from it previously, that within that okay, cited of in delay three-week

the of the change devaluation rapid… that is only So due to

Mark Learmonth

three-week is I'll there; of period, and very, to coincidence between that? -- the does the point rapid that very I over to just a you if out same some normalized. answer, suspicious out leave appear really, good. there since there time, want leave do Chester, that pushing you, might Chester which devaluation would the But coincidence just has the of talk suspicious period, the the has out But to receivable there. about to I'll Chester at RTGS some be be

Chester Goodburn

goes by that weeks. about of within over three the Al delivering of Normally, our sure. they [Indiscernible] our us Fidelity, paying got I cash days the over we has period times Etihad. to been now of cash Fidelity XX% when from of all our outside weeks; company three regularly in cash Yes, two come to And receive weeks. them. to gold two rate just devalued the called three -- two you of to see, a have

So we long June. seen those again delays after haven't

far, been periods. And found so been maturing putting Fidelity's they've --

level So, so cost FX in lot was far, about it's only been that losses. one it well, us going a

Unidentified Analyst

cool. Okay, covers That me.

Mark Learmonth

else? Anything Good.

Unidentified Analyst

thanks. you. I don't know, Thank

Mark Learmonth

Good. Okay. you. Thank

questions Okay, anybody? from any further

Camilla Horsfall

more I questions. was are come down. back don't think but any there it's There hand another up,

So, that's I think it.

Mark Learmonth

second it Okay, case a shall No. give we has few thoughts? just minutes, in any just anybody

for well, more that, improvement Signs Thank the thank quarter, you Okay, of I Difficult in well, presentation. of and QX as and this we'll end attending. you. a on again be July, hopefully, cheerful said. at there'll do

Okay. much for attending. very Thank you

Caledonia Mining (CMCL) 14 Aug 232023 Q2 Earnings call transcript