Image source: © Tepic | Megapixl.com

Highlights

  • Caledonia Mining Corporation is a FTSE AIM All-share listed gold producer.
  • The company’s gross margin was 48.1% in Q1 FY23, against 35.2% in Q4 FY22.
  • The total gold produced in Q2 FY23 increased to 18,512 oz (ounces) as compared to 16,141 oz in Q1 FY23.

FTSE AIM All-share listed gold producer Caledonia Mining Corporation PLC (LSE: CMCL) hosts a profitable and cash generative business with a growth profile. Recently, the company announced the drilling results conducted at Blanket Mine which resulted in the gold assessment of approx. 15.56 g/t (grams/tonne), 6.62 g/t, and 4.03 g/t at various holes, whereas the historical results yielded approx. 4-5 g/t from Eroica mines.

During the first quarter of the fiscal year 2023, the gross margin of CMCL was 48.1% against 35.2% in the previous quarter (Q4 FY22). Also, the EBITDA margin of the group increased to 31.3% in Q1 FY23 as compared to the EBITDA margin of 31.3% in Q4 FY22.

The total gold produced in Q2 FY23 increased to 18,512 oz (ounces) as compared to 16,141 oz in the previous quarter (Q1 FY23). The major increase in production was from the Blanket mine-17,436 oz in the reported period Q2 FY23 versus 16,036 oz in Q1 FY23.

A snapshot of FY22 results

During FY22, the company posted 17.4% year-on-year growth in gross revenue to USD 142 million from USD 121 million in FY21. This rise in gross revenue can be attributed to the higher quantity of gold sold at an increased average realized sales price in FY22. Also, there was a 14.2% increase in the company’s gross profit to USD 61.80 million in FY22, from USD 54.10 million in FY21.

 

What’s the plan forward?

For the full fiscal year 2023, CMCL has set production guidance for Blanket to be between 75,000 ounces and 80,000 ounces of gold, while the on-mine cost at Blanket is likely to range from USD 770 per oz to USD 850 per oz of gold.

The company had started a 12.2 MWac solar plant in February this year which generated more than expected power. This led to a drop in the total fuel consumed at Blanket.

Top 10 shareholders
Over 46.62% of the total shareholdings is constituted by the top ten shareholders of the firm. Toziyana Trust holds the maximum number of shares with over 11.8% shareholding, while Allan Gray Proprietary Limited has around 11.28% of the total shareholding in the company.

Stock Price Performance
There has been a decrease of approximately 17.52% in the company’s stock price in the last three months, while it has fallen by around 21.86% in the last six months. The stock’s 52-week low and 52-week high price stands at GBX 805.00 and 1,380.00, respectively.

Data Source: EODHD/Others, Analysis done by Kalkine Group

Please note markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference data for all price data, currency, technical indicators, support, and resistance levels is 24 July 2023. The reference data in this report has been partly sourced from EODHD/Others.