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Caledonia Mining

Termination of coverage

Termination | Mining | 10 Jan 2019

Edison Investment Research is terminating coverage on Caledonia Mining (CMCL). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant.

Caledonia Mining

Expansion on track, a gold mine with purpose

Update | Mining | 01 May 2018

FY17 saw Caledonia Mining (CMCL) marginally beat its 54-56koz gold production guidance, drive down AISC costs, its head grade increase (which had a corresponding positive effect on gold recoveries) and add significantly to its code-compliant resource base. In relation to its investment plan to lift production to 80koz by 2021, we see capex peaking this financial year (FY18), which will then allow significantly improved free cash flow generation. Coupled with an improved political environment and regulatory changes seemingly favouring gold miners (with a key objective of improving Zimbabwe’s domestic US$ currency supply), Caledonia is very well placed to capitalise on the long-overdue opening up of one of Africa’s prime geological and mining gems.

Caledonia Mining

Record production and 14% increase in grade

Update | Mining | 12 Jan 2018

Caledonia’s Q3 results indicate record gold production with moderate unit cost decreases. The company is now firmly on target for its FY17 full-year guidance of 54-56koz of gold. We also consider the marked increase in gold grade mined compared with the previous quarter, as a major positive for the company. Following a marked increase in higher confidence category gold resources situated at depth, the central shaft development has been extended to add further long-term mining flexibility.

Caledonia Mining

Ore extraction hindered by IP implementation

Update | Mining | 14 Sep 2017

As Caledonia Mining (CMCL) continues to implement its investment plan (IP), logistical issues governing ore handling volumes and access to higher-grade ore bodies have affected gold production during Q2 and H117. Underground works to ameliorate material handling bottlenecks have taken place with successful completion, inter alia an underground tramming loop. However, grades are lower due to restricted access to the higher-grade Eroica and Lima ore bodies situated on the other side of the Central Shaft development area to the main surface haulage route – the No. 4 haulage shaft. We have adjusted our valuation to reflect this and the H117 financial results, leading to a valuation of 933p for successful implementation and operation of the Blanket IP.

Caledonia Mining

Doing everything you want a gold miner to do

Update | Mining | 12 Apr 2017

Caledonia Mining (CMCL) beat its FY16 production target of 50kozpa by recording 50.4koz Au produced, with AISC costs down 12% y-o-y to US$912/oz, while C1 costs dropped 9% due to a commensurate annual increase of 18% in gold ounces produced. Investment continues at Blanket to raise production towards 80kozpa by 2021, with US$36m spent in the past two years alone, and another US$18m due in 2017 before capex drops off markedly. The central shaft is on track and on budget for completion in mid-2018 and is two thirds-complete. While this investment takes place, CMCL carries a sound cash balance of US$14.3m at end December 2016. The dividend yield is a high 3.8% and the stock is trading on a very low P/E of c 4x vs the FTSE miners index at 2.1% and 40x respectively.

Caledonia Mining

Production in line, EPS down on macro factors

Update | Mining | 24 Nov 2016

Caledonia Mining's (CMCL) third-quarter results indicate the Blanket mine operating in line with expectations, bar a minor slip in the head grade, which is already improving through Q416. As such, revenue and costs remain in line with expectations and the company remains on track to meet its FY16 production target of 50koz Au. The main impacts to the company's cash flow are non-operational, relating to share-based payments, negative forex movements (with rand strengthening affecting certain costs), as well as a non-recurring cost relating to due diligence on an investment opportunity. As a result, we downgrade our 2016 adj. EPS estimate 25% from 24c to 18c, while noting that this still represents a year-on-year increase of 123% and a low P/E of 6.7x (cf FTSE Mining Index average of 27.1x). Caledonia's dividend yield is currently 4.5%.

Caledonia Mining

Production on track, 14th dividend declared

Flash note | Mining | 05 Oct 2016

Production at the Blanket gold mine continues to perform in line with expectations and remains on track to achieve 50koz of gold for 2016. Alongside gold production, Caledonia is also steadily progressing Blanket's ramp up to c 80koz by 2021 by implementing a series of planned mine expansions. To this end, a new ball mill has been installed, which will lift throughput capacity at Blanket by 20%, from 1,500tpd to 1,800tpd. Based on this announcement, we retain our 2016 forecasts published August.

Caledonia Mining

Production up, costs down, cash building

Update | Mining | 15 Aug 2016

Caledonia's interim results demonstrate improved financials due not only to the higher gold price, but also the effects of successfully implementing its Revised Investment Plan (RIP), including a higher gold grade from below the 750m level. Cash is starting to build again after a period of reduction due to RIP implementation and a weak H116 gold price.

Caledonia Mining

2016 to see marked increase in profit

Update | Mining | 04 Apr 2016

2015 for Caledonia featured stable gold production at Blanket, albeit at slightly higher costs due mainly to a reduced average gold grade and additional sustaining capex. Investment accelerated with the implementation of the revised investment plan (RIP), significantly yielding ore production for the first time from below the 750m reduced level (RL) via the completed No. 6 Winze. This level is a key ‘watermark' in that the company's longer-term growth hinges on gold production below this depth. Such an important milestone mirrors a management team that is delivering on its 2014 initiated RIP and one that has taken precautionary measures to ensure its successful completion (inter alia, a small gold hedge).

Caledonia Mining

Development gathers pace

Update | Mining | 24 Nov 2015

Caledonia's Q315 results indicate continuing steady progress in implementing its revised investment plan (RIP), with year-to-date gold production of 31.3koz making its FY15 guidance of 42koz of gold look eminently achievable. In US dollar terms, on-mine costs remained stable q o-q. Increased capex in Q3 reflects adherence to the RIP as well as normal run-of-mine equipment purchases. Accounting for the lower gold price environment, Caledonia will inject US$5m of its own treasury in FY16 to support implementation of the RIP, as well as to continue quarterly dividend payments.

Caledonia Mining

Executive Interview - Caledonia Mining

Edison TV: | Mining | 23 Oct 2015

Caledonia Mining (AIM: CMCL) is a mining exploration and development company focused on Southern Africa. CMCL mines gold at its main operating asset, the 49%-owned Blanket gold mine in southern Zimbabwe. It is also advancing a number of promising satellite projects close to Blanket.

Caledonia Mining

FY15 guidance maintained, expansion on track

Update | Mining | 24 Aug 2015

Caledonia's Q215 and H115 results indicate Blanket has met allinfrastructure and production milestones on budget or ahead of schedule.Cost pressures relating to increased electricity consumption and a lowergold grade have been partially offset by cost savings made closing itsZambian exploration office.