Caledonia Mining profits suffer after surprise charges

Caledonia Mining Corporation has cautioned investors that unexpected one-off costs will mean lower profits for the company this year. 

In a press release to investors, Caledonia Mining announced that while its Zimbabwean Blanket Gold Mine “continued to perform well” in the latter half of 2023, increased operating costs and “several significant one-off, non-operating costs in the final quarter” of 2023 have resulted in reduced profits for 2023.  

The company attributes increased operating costs to “higher than expected overtime payments and power costs at Blanket Mine”, as well as general and administrative costs that rose significantly due to global inflation. Caledonia Mining was also hit by higher financing costs and “a one-off impairment charge in relation to a VAT refund claim at the Blanket Mine solar project.” 

Caledonia Mining CEO Mark Learmonth said: “It is regrettable that, at a group level, we have been adversely affected by a series of higher-than-expected costs in the second half of 2023, which have had a negative effect on the full year profitability. The performance of Blanket Mine remains strong and, notwithstanding some unforeseen overtime and power cost issues in the second half, has met guidance and produced a robust performance for the second half of 2023.” 

However, he remains optimistic that the reduced profits are merely a temporary blip and is reassured that “a number of the other cost items are not anticipated to be recurring, whereas others have arisen from our decisions to invest in the business, most notably around personnel and advancing the Bilboes sulphide project”.  

“I am confident that many of these [issues] will not recur in 2024 which has started positively, and I look forward to the future with optimism as we pursue our goal of becoming a multi-asset production company.” 

Caledonia Mining will formally announce its operating and financial results for the quarter ended 31 December 2023 by 28 March.