Caledonia Mining Plc(US:CMCL)2022-05-16 17:21Financial Data and Key Metrics Changes - Production ounces increased by 40% compared to the previous quarter and the same quarter in 2021, with revenues up by 37% due to higher gold prices [3][10] - Gross profit rose by 63%, while EBITDA increased by 49% compared to the comparable quarter [4][10] - Profit attributable to shareholders increased by 30%, with adjusted earnings per share rising to $62.5 [4][12] Business Line Data and Key Metrics Changes - The all-in sustaining costs decreased by 7%, demonstrating effective cost control despite increased production [4] - Production costs per ounce fell from $836 to $698, reflecting improved operational efficiency [17][19] Market Data and Key Metrics Changes - The average gold price increased by 6%, contributing to the overall revenue growth [10] - The company reported a net foreign exchange gain of just under $1 million, influenced by the devaluation of the local currency against the U.S. dollar [11] Company Strategy and Development Direction - The company is transitioning from being solely focused on Blanket Mine to exploring new projects, with Maligreen being a potential front-runner [30][34] - There is a commitment to resume deep-level exploration to improve resource confidence and discover new material [32][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining production guidance of 73,000 to 80,000 ounces for 2022, with April run rates indicating strong performance [9][63] - The company is actively managing working capital and is prepared for potential supply chain issues, particularly regarding consumable costs [45][47] Other Important Information - The solar farm project is progressing well, with commissioning expected by the end of July [27][29] - The company plans to invest approximately $3 million to improve electricity supply quality, which should help control costs [17] Q&A Session Summary Question: What are the plans for exploration expenditures? - The company intends to resume deep-level exploration with plans for 15,000 meters of drilling this year and 25,000 meters next year, focusing on both deeper and shallower areas [32][34] Question: How is the company managing rising costs? - Management noted that the increase in DNO costs is reflective of broader market trends, and they are paying workers entirely in U.S. dollars to mitigate local inflation impacts [35][36] Question: What is the status of the Maligreen project? - The company is confident in upgrading the resource at Maligreen and is about 80% complete with the work needed to compile a new resource report [38][39] Question: How will new projects be funded? - New projects will likely require a combination of debt and retained cash, with the company not solely relying on equity markets for funding [53] Question: What is the outlook for new mining projects? - Management anticipates that new projects could start contributing to production within the next few years, with a focus on balancing exploration and shareholder returns [52][54]