…as full year PBT will be below market expectations
By Stephen Chandisareva
GOLD miner Caledonia Mining Corporation said on Monday it expects to report an adjusted profit before tax for the year ended December 31, 2023 that is materially below market expectations, largely due to increased operational costs.
Accordingly, the miner which is expected to publish its operating and financial results for the quarter ended 31 December 2023 on or before March 28, 2024, revealed that the full year’s profit was lower due to higher operational costs for 2023 and many large one-time, non-operating expenses in the latter quarter of the year.
“The increase in operating costs comprises of higher-than-expected overtime payments and power costs at Blanket Mine. In relation to non-operating costs, general and administrative costs rose with global inflation and these also included higher than expected staff termination costs.
“The Company also encountered higher financing costs, including hedging, interest, and foreign exchange losses and a one-off impairment charge in relation to a VAT refund claim at the Blanket Mine solar project,” the miner said in a trading update for the year ended December 31, 2023.
Caledonia indicated that a sizable amount of these expense increases is not anticipated to continue until 2024.
“Specifically, costs associated with Bilboes are now reduced to care and maintenance only and the project was cash neutral in the fourth quarter of 2023,” the company said.
“Production and costs at Blanket in 2024 to-date are also within expectations of full year guidance, and the company is introducing measures aimed at reducing electricity costs over the medium term.”
The miner ended 2023 with 75,416 ounces of gold.
“As a result, the company expects to report revenue for the full year in line with market expectations,” the company said.
As at 31 December 2023, the miner had cash on hand of US$6.7 million and overdrafts and term loans of US$17.7 million-HARARE