NYSE- and Aim-listed gold miner Caledonia Mining delivered a strong quarter ended June 30, with record second-quarter gold production at its Blanket mine, in Zimbabwe, and a considerable increase in profitability, reflecting strong operational performance and a higher gold price environment, CEO Mark Learmonth says.

Blanket produced 21 070 oz of gold, a 1.4% increase on the 20 773 oz produced in the second quarter of 2024, owing to higher grades and better plant recoveries.

The plant recovery rate in the quarter under review was 94.4%, which represents a new record.

Revenue for the quarter was $65-million, a 30% year-on-year increase, mainly as a result of a higher gold price and slightly higher production.

Gross profit increased to $33.8-million from $22.9-million in the prior comparable quarter.

Net profit attributable to shareholders of the company more than doubled to $20.5-million from $8.3-million.  

A dividend of $0.14 apiece was declared on August 11.

On April 11, Caledonia sold its Zimbabwe subsidiary, Caledonia Mining Services (CMS), to CrossBoundary Energy Holdings for $22.35-million in cash. CMS owns the 12.2 MW solar plant powering the Blanket mine, which will continue supplying energy under an exclusive agreement.

“The successful sale of our solar plant in April has strengthened our balance sheet and ensures a reliable, long-term renewable-energy supply for Blanket mine,” Learmonth points out.

During the half-year ended June 30, Caledonia generated operating cash inflows of $41.3-million, driven by higher production at Blanket and a favourable gold price environment.

An additional $22.35-million (pre-tax) was received in the quarter from the sale of the solar plant, further strengthening the group’s cash position.

The strong cash generation supported continued investment in strategic growth.

“Our ongoing drilling campaign at Blanket mine continues to demonstrate encouraging results, further improving our confidence in the mineral resource and pointing to additional future mineral resource growth.

“The grades and widths we are seeing from this drilling campaign are as good as and, in some cases, considerably better than results from previous drilling campaigns,” Learmonth informs.  

He adds that the company is “encouraged” by the progress on the feasibility study for the Bilboes sulphide project and continues to evaluate opportunities that could materially improve project economics.

Concurrently, the exploration programme at the Motapa gold exploration property in southern Zimbabwe is indicated to be advancing well, with a clear focus on identifying both sulphide and oxide resources that could support near-term production and longer-term growth.

Consolidated on-mine cost increased by 10.9% to $1 123/oz from $1 013/oz, primarily owing to higher labour and consumables costs at Blanket, while labour costs increased owing to a higher headcount, inflationary salary increases, bonuses paid for higher production and overtime worked.

Consolidated all-in sustaining costs rose to $1 805/oz from $1 485/oz, as expected owing to higher on-mine costs and increased sustaining capital expenditure (capex).

Full-year sustaining capex remains on target.

“Looking ahead, we remain focused on delivering our increased production guidance at Blanket, and advancing our growth pipeline in a way that maximises long-term value for shareholders. With a strong operational base and a clear strategic roadmap, Caledonia is well positioned to continue building on this positive momentum,” Learmonth avers.