Nqobile Bhebhe, Senior Business Reporter
CALEDONIA Mining Corporation chief executive officer, Mr Mark Learmonth says the mining entity which is angling towards becoming a multi-asset gold producer in Zimbabwe sees huge geological potential in the country, a key part in their acquisition thrust.
In 2022, the resource group expanded its footprint by purchasing Motapa Mining Company UK Limited and signed a US$53,2 million agreement to buy Bilboes Gold Limited as part of its expansion drive.
Bilboes Gold is a gold mining entity that owns three major gold mines in Matabeleland North, 75km north of Bulawayo, and was once ranked among the country’s 10 biggest gold producers.
It has produced approximately 288 000 ounces of gold since 1989.
Now under the giant Victoria Falls Stock Exchange-listed group, Bilboes is projected to produce an average of 168 000 ounces per year over a 10-year lifespan of the mine.
In a trading update for the financial results for the year ended 31 December 31, Mr Learmonth said in the last couple of years, there has been tremendous change in the company as it moved towards becoming a multi-asset gold producer in Zimbabwe.
“We have always seen huge geological potential in the country and are very excited about the portfolio of attractive new assets that we have acquired,” he noted.
“In November we purchased Motapa, an asset we consider to be highly prospective and strategically important in our growth ambitions, as it is a large exploration property which is contiguous to the Bilboes gold project. In January 2023, following the satisfaction of conditions precedent, we closed the acquisition of the Bilboes Gold Project.”
A feasibility study prepared by the vendors indicates the potential for an open-pit gold mine producing an average of 168,000oz per year over a 10-year life of mine, he noted.
He said they have commissioned their own feasibility study to identify the most judicious way to commercialise the project to optimize shareholder returns.
“One approach that will be considered is a phased development which would minimise the initial capital investment and reduce the need for third party funding.
“The Company has also restarted the oxide operations at Bilboes providing immediate cash-flow and has given guidance of between 12,500 – 17,000oz for 2023.”
In the period under review, the firm achieved a record 80,775 ounces against a set target of 80 000 ounces as it plans to pour millions of dollars in capital expenditure.
“Operationally, the last 12 months have marked a turning point for the business, and I am delighted that we hit our long-term target of just over 80,000oz,” said the CEO.
Highlighting its financial performance, the firm said it posted gross revenues of $142 million up from $121 million in the prior year and gross profit of $61.8 million (2021: $54.1 million).
Net cash from operating activities was $42,6 million compared to $30,9 million in 2021 and dividend paid of 56 cents per share (2021: 50 cents per share).
On the dividend, Mr Learmonth noted that the quarterly dividend continues to be an important part of the Company’s strategy.
He said during the year under review, a quarterly dividend of 14 cents a share, providing a healthy yield to our shareholders was paid.
“We believe the dividend coupled with our growth strategy makes us an attractive investment and sets us apart from our industry peers.”