Caledonia Mining Corporation PLC has released a trading update for the year ended December 31, 2023. The company reported that its Blanket Mine performed well, producing 75,416 ounces for the year. However, increased operating costs and significant one-off, non-operating costs in the final quarter of the year resulted in reduced profit for the full year. The increase in operating costs was attributed to higher than expected overtime payments and power costs at Blanket Mine. Additionally, the company encountered higher financing costs and a one-off impairment charge in relation to a VAT refund claim at the Blanket Mine solar project.
As a result, the company expects to report an adjusted profit before tax for the year ended December 31, 2023 materially below market expectations. The company reassured that a significant proportion of these cost increases are not expected to be carried through into 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 also mentioned that production and costs at Blanket in 2024 to-date are within expectations of full-year guidance, and measures are being introduced to reduce electricity costs over the medium term.
At the end of December 31, 2023, the company had cash on hand of $6.7 million and overdrafts and term loans of $17.7 million. The company's operating and financial results for the quarter ended December 31, 2023, will be published on or before March 28, 2024.
Mark Learmonth, Chief Executive Officer, commented on the update, expressing regret for the adverse effect of higher-than-expected costs in the second half of 2023 on the full-year profitability. He also expressed confidence that many of these cost items will not recur in 2024 and that the year has started positively. Learmonth looks forward to the future with optimism as the company pursues its goal of becoming a multi-asset production company.