Caledonia Mining Corporation PLC (AIM:CMCL, NYSEMKT:CMCL, FRA:9CD1) (AIM:CMCL) said its earnings doubled in the three months to end June as it set a new gold production record for a second quarter.
Underlying earnings (EBITDA) jumped to $14.0mln, from $6.9mln in the second quarter of 2020, as revenues grew 31% to $30.0mln.
"Higher production, lower costs and a higher gold price resulted in a significant increase in the underlying profitability of our business with gross profit increasing by 51 per cent compared to the comparable quarter in 2020,” said chief executive Steve Curtis.
The company produced 16,710 ounces of gold in the second quarter, up 24% year-on-year, and a new output record for a second quarter.
In an outlook, the company reported that production in July was 5,995 ounces, a further increase in average monthly output, and that the Blanket mine in Zimbabwe is on track to achieve its production guidance of 61,000-67,000 ounces for 2021.
"Production in July was slightly less than 6,000 ounces of gold, which demonstrates that Blanket continues to ramp-up production towards the target rate of 6,700 ounces per month that is required to achieve the production target of 80,000 ounces per annum from 2022,” said Curtis.
More than 165,000 tonnes of ore were mined and milled in the quarter - a new production record for any quarter – boosted by the contribution of the Central Shaft which was commissioned at the end of March 2021.
The gold producer also said it has decided not to exercise an option over the Glen Hume property in Zimbabwe due to disappointing exploration results.
READ: Caledonia Mining enters option agreement for Zimbabwe gold project
“Net profit was adversely affected by the impairment of the Glen Hume exploration asset following the board's decision not to proceed further with this project because the property does not meet Caledonia's strategic requirements in terms of size, grade and width,” said Curtis.
Caledonia will conduct exploration at Connemara North, the other optioned property in Zimbabwe, and will consider further investment opportunities in Zimbabwe and elsewhere.
“Our immediate strategic focus continues to be to increase production to 80,000 ounces in 2022, while undertaking further exploration and development with the objective of extending the life of mine beyond 2034 thereby safeguarding and enhancing Blanket's long-term future,” Curtis added.