6-K
Caledonia Mining Corp Plc (CMCL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
Of the Securities Exchange Act of 1934
For the month of March 2025
Commission File Number: 001-38164
CALEDONIA MINING CORPORATION PLC
(Translation of registrant's name into English)
B006 Millais House
Castle Quay
St Helier
Jersey JE2 3EF
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CALEDONIA MINING CORPORATION PLC | |
|---|---|
| (Registrant) | |
| Date: March 31, 2025 | /s/ JOHN MARK LEARMONTH |
| John Mark Learmonth | |
| CEO and Director |
EXHIBIT INDEX
| Exhibit | Description |
|---|---|
| 99.1 | Annual Financial Statements/Report |
| 99.2 | Annual MD&A |
ex_794863.htm
Exhibit 99.1
Consolidated Financial Statements
2024
Caledonia Mining Corporation Plc
| MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL INFORMATION |
|---|
To the Shareholders of Caledonia Mining Corporation Plc:
Management has prepared the information and representations in this report. The consolidated financial statements of Caledonia Mining Corporation Plc and its subsidiaries (the “Group”) have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board and, where appropriate, these statements include some amounts that are based on best estimates and judgment. Management has determined such amounts on a reasonable basis in order to ensure that the consolidated financial statements are presented fairly, in all material respects.
Our independent auditor has the responsibility of auditing the consolidated financial statements and expressing an opinion on these financial statements.
The accompanying Management Discussion and Analysis (“MD&A”) also includes information regarding the impact of current transactions, sources of liquidity, capital resources, operating trends, risks and uncertainties. Actual results in the future may differ materially from our present assessment of this information because future events and circumstances may not occur as expected.
The Group maintains adequate systems of internal accounting and administrative controls, within reasonable cost. Such systems are designed to provide reasonable assurance that relevant and reliable financial information are produced.
Management is responsible for establishing and maintaining adequate internal controls over financial reporting (“ICOFR”). Any system of ICOFR, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Our management evaluated the effectiveness of the Group’s ICOFR as of December 31, 2024 based on the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission. As disclosed in note 41 to our financial statements, we are restating our consolidated financial statements for the fiscal year ended December 31, 2023 to correct an error related to the accounting treatment of deferred tax liabilities incorrectly accounted for from December 31, 2019. Our management concluded that our ICOFR was not effective from December 31, 2019 to December 31, 2024, due to a material weakness that was identified relating to a deficiency in the design of an existing internal control over the review and approval of the deferred taxation liability calculation of Blanket Mine (1983) (Private) Limited’s (“Blanket Mine” or “Blanket”). The error resulting in the restatement of our previous consolidated financial statements as indicated in note 41. Remediation to our ICOFR are presented in section 11 of the MD&A.
The Board of Directors, through its Audit Committee, is responsible for ensuring that management fulfils its responsibilities for financial reporting and internal control. The Audit Committee consists of five independent non-executive directors. This Committee meets periodically with management, the external auditor, and the internal auditor to review accounting, auditing, internal control, and financial reporting matters.
Caledonia Mining Corporation Plc
| MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL INFORMATION (continued) |
|---|
The consolidated financial statements as at and for the year ended December 31, 2024, 2023 and January 1, 2023 have been audited by the Group’s independent auditor, BDO South Africa Incorporated. The independent auditor’s report outlines the scope of their opinion.
The consolidated financial statements for the year ended December 31, 2024 were approved by the Board of Directors and signed on its behalf on March 31, 2025.
| (Signed) J.M. Learmonth | (Signed) C.O. Goodburn |
|---|---|
| Chief Executive Officer | Chief Financial Officer |
Caledonia Mining Corporation Plc
| Tel: +27 011 488 1700<br> Fax: +27 010 060 7000<br> www.bdo.co.za | Wanderers Office Park<br><br> <br>52 Corlett Drive<br><br> <br>Illovo, 2196<br><br> <br><br><br> <br>Private Bag X60500<br> Houghton, 2041<br> South Africa |
|---|
Independent Auditor’s Report
To the shareholders of Caledonia Mining Corporation Plc
Opinion
We have audited the consolidated financial statements of Caledonia Mining Corporation Plc and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at December 31, 2024, 2023 and 2022 and the consolidated statements of profit and loss and other comprehensive income, changes in equity and cash flows for the years ended December 31, 2024, 2023 and 2022, and notes to the consolidated financial statements, including material accounting policy information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2024, 2023 and 2022 and its consolidated financial performance and its consolidated cash flows for the years ended December 31, 2024, 2023 and 2022 in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter — Restated Comparative Information
We draw attention to Note 41 to the financial statements, which explains that certain comparative information presented for the year ended December 31, 2023 and 2022 has been restated. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.
BDO South Africa Incorporated
Registration number: 1995/002310/21
Practice number: 905526
VAT number: 4910148685
Chief Executive Officer: LD Mokoena
A full list of all company directors is available on www.bdo.co.za
Caledonia Mining Corporation Plc
The company’s principal place of business is at The Wanderers Office Park, 52 Corlett Drive, Illovo, Johannesburg where a list of directors’ names is available for inspection. BDO South Africa Incorporated, a South African personal liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.
| Key audit matter | How the key audit matter was addressed in the audit | ||
|---|---|---|---|
| Impairment assessment of the recoverable amounts of the cash generating units of the group (Note 3.1.3) | Our audit procedures included, amongst others: | ||
| Management assesses its group and individual cash generating units (“CGU”) at each reporting period to determine the recoverable amount, which is then compared to the carrying amount of non-financial assets. In accordance with IAS36, the comparison must be done at a consolidated and at a CGU level. If the recoverable amount is lower than the carrying amount, an impairment expense should be recognized. | ●<br><br> <br><br><br> <br>● | We evaluated management’s assessment of impairment indicators over the CGUs;<br><br> <br><br><br> <br>We obtained an understanding of the controls in respect of the Group’s value in use calculations and the reviews thereof, including confirming that the value in use calculations have been approved by the Board; | |
| Management have identified the following cash generating units for impairment assessment: | ● | We evaluated Management’s value in use calculation against the approved LOM plan and our understanding of the operations, and assessed key estimates and assumptions used by Management; | |
| ● | Caledonia Mining Corporation Group | ||
| ● | Blanket Mine CGU | ● | We compared the trading performance against budget for FY 2024 to evaluate the quality of Management’s forecasting ability. Where underperformance against budget was highlighted, we evaluated the impact on the forecasts; |
| Impairment indicators were identified by management as at 31 December 2024 and therefor management was required to assess the recoverable amount of the CGU’s. | ● | We assessed key inputs and assumptions used in the value in use calculation for reasonability, considering specifically the operating cashflow projections, ore reserves and resources, discount rate, forecasted production volumes and forecasted gold price and compared these to external sources where appropriate, taking into account our knowledge of the industry; | |
| The recoverable amount of the CGU is determined as the higher of the value in use and fair value less cost to sell. | ● | We made use of our internal valuation expertise to assess the valuation model and the related key inputs and assumptions for reasonability, to assess whether the methods applied are consistent with IFRS Accounting Standards; | |
| There is a high level of inherent uncertainty, and critical judgements and estimates applied by management in the assessment of the value in use calculation of the CGU. | ● | We evaluated managements sensitivity analysis for the value in use model and performed additional sensitivity analysis on the model where considered necessary; and | |
| The estimates of future cashflows are based on financial budgets and the life of mine (“LOM”) plan, including significant judgements and assumptions related to: | ● | We evaluated the adequacy of the Group’s disclosures in terms of the IFRS Accounting Standards. | |
| ● | Ore reserves and mineral resources; | ||
| ● | Forecasted gold price; | ||
| ● | Discount rate; and | ||
| ● | Production volumes and grades | ||
| There was no impairment required based on the value in use calculation of the CGU. | |||
| As a result of the estimation uncertainty, judgements, and new information presented by management which is applied in the discounted cashflow model to calculate the value in use, the impairment assessment was considered a matter of most significance in our current year audit of the consolidated financial statements. |
Caledonia Mining Corporation Plc
Other Information
Management is responsible for the other information. The other information comprises:
| ● | The Management’s Discussion and Analysis report of the consolidated operating results and financial position of the Group for the quarter ended December 31, 2024. |
|---|---|
| ● | The Annual Report – referred to as Form 20-F which is expected to be made available to us after that date. |
| --- | --- |
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We obtained the Management’s Discussion and Analysis report to the date of this auditor’s report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor’s report. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
| ● | Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. |
|---|---|
| ● | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. |
| --- | --- |
| ● | Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. |
| --- | --- |
| ● | Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. |
| --- | --- |
Caledonia Mining Corporation Plc
| ● | Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. |
|---|---|
| ● | Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. |
| --- | --- |
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Servaas Kranhold.
BDO South Africa Incorporated
Registered Auditors
Wanderers Office Park
52 Corlett Drive
Ilovo
2196
March 31, 2025
Caledonia Mining Corporation Plc
Consolidated statements of profit or loss and other comprehensive income
(in thousands of United States Dollars, unless indicated otherwise)
| For the years ended December 31 | Note | 2024 | 2023<br><br> <br>Restated^*^ | 2022<br><br> <br>Restated^*^ | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 7 | **** | 183,018 | 146,314 | 142,082 | |||||
| Royalty | **** | **** | (9,263 | ) | (7,637 | ) | (7,124 | ) | ||
| Production costs | 8 | **** | (80,744 | ) | (82,709 | ) | (62,998 | ) | ||
| Depreciation | 18 | **** | (16,021 | ) | (14,486 | ) | (10,141 | ) | ||
| Gross profit | **** | **** | 76,990 | 41,482 | 61,819 | |||||
| Net foreign exchange loss | 9 | **** | (9,722 | ) | (6,772 | ) | (5,677 | ) | ||
| Administrative expenses | 10 | **** | (15,658 | ) | (17,429 | ) | (11,941 | ) | ||
| Net derivative financial instrument expense | 11 | **** | (831 | ) | (1,119 | ) | (1,198 | ) | ||
| Equity-settled share-based expense | 12.2 | **** | (1,054 | ) | (640 | ) | (484 | ) | ||
| Cash-settled share-based expense | 12.1 | **** | (201 | ) | (463 | ) | (609 | ) | ||
| Other expenses | 13 | **** | (6,940 | ) | (4,367 | ) | (11,782 | ) | ||
| Other income | 14 | **** | 1,090 | 263 | 60 | |||||
| Operating profit | **** | **** | 43,674 | 10,955 | 30,188 | |||||
| Finance income | 15 | **** | 26 | 39 | 17 | |||||
| Finance cost | 15 | **** | (3,157 | ) | (3,024 | ) | (657 | ) | ||
| Profit before tax | **** | **** | 40,543 | 7,970 | 29,548 | |||||
| Tax expense | 16 | **** | (17,489 | ) | (12,810 | ) | (14,359 | ) | ||
| Profit (loss) for the year | **** | **** | 23,054 | (4,840 | ) | 15,189 | ||||
| Other comprehensive income | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Items that are or may be reclassified to profit or loss | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Exchange differences on translation of foreign operations | **** | **** | (116 | ) | (622 | ) | (462 | ) | ||
| Total comprehensive income for the year | **** | **** | 22,938 | (5,462 | ) | 14,727 | ||||
| Profit (loss) attributable to: | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Owners of the Company | **** | **** | 17,899 | (7,862 | ) | 11,239 | ||||
| Non-controlling interests | 28 | **** | 5,155 | 3,022 | 3,950 | |||||
| Profit (loss) for the year | **** | **** | 23,054 | (4,840 | ) | 15,189 | ||||
| Total comprehensive income attributable to: | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Owners of the Company | **** | **** | 17,783 | (8,484 | ) | 10,777 | ||||
| Non-controlling interests | 28 | **** | 5,155 | 3,022 | 3,950 | |||||
| Total comprehensive income for the year | **** | **** | 22,938 | (5,462 | ) | 14,727 | ||||
| Earnings (loss) per share | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Basic earnings (loss) per share ($) | 27 | **** | 0.91 | (0.44 | ) | 0.85 | ||||
| Diluted earnings (loss) per share ($) | 27 | **** | 0.91 | (0.44 | ) | 0.85 |
^*^ Refer to note 41.
The accompanying notes on pages 13 to 82 are an integral part of these consolidated financial statements.
On behalf of the Board: “J.M. Learmonth”- Chief Executive Officer and “C.O. Goodburn”- Chief Financial Officer.
8
Caledonia Mining Corporation Plc
Consolidated statements of financial position
(in thousands of United States Dollars, unless indicated otherwise)
| As at | Note | December 31, 2024 | December 31, 2023<br><br> <br>Restated^*^ | January 1, 2023<br><br> <br>Restated^*^ | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Assets | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Exploration and evaluation assets | 17 | **** | 97,326 | 94,272 | 17,579 | |||||
| Property, plant and equipment | 18 | **** | 189,456 | 179,649 | 178,983 | |||||
| Deferred tax asset | 16 | **** | 264 | 153 | 202 | |||||
| Total non-current assets | **** | **** | 287,046 | 274,074 | 196,764 | |||||
| Income tax receivable | 16 | **** | 355 | 1,120 | 40 | |||||
| Inventories | 20 | **** | 23,768 | 20,304 | 18,334 | |||||
| Derivative financial assets | 11.1 | – | 88 | 440 | ||||||
| Trade and other receivables | 21 | **** | 12,675 | 9,952 | 9,185 | |||||
| Prepayments | 22 | **** | 6,748 | 2,538 | 3,693 | |||||
| Cash and cash equivalents | 23 | **** | 4,260 | 6,708 | 6,735 | |||||
| Assets held for sale | 24 | **** | 13,512 | 13,519 | – | |||||
| Total current assets | **** | **** | 61,318 | 54,229 | 38,427 | |||||
| Total assets | **** | **** | 348,364 | 328,303 | 235,191 | |||||
| Equity and liabilities | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Share capital | 25 | **** | 165,408 | 165,068 | 83,471 | |||||
| Reserves | 26 | **** | 138,465 | 137,819 | 137,801 | |||||
| Retained loss | **** | **** | (89,996 | ) | (97,143 | ) | (80,529 | ) | ||
| Equity attributable to shareholders | **** | **** | 213,877 | 205,744 | 140,743 | |||||
| Non-controlling interests | 28 | **** | 20,587 | 18,456 | 16,946 | |||||
| Total equity | **** | **** | 234,464 | 224,200 | 157,689 | |||||
| Liabilities | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Deferred tax liabilities | 16 | **** | 48,418 | 46,123 | 40,893 | |||||
| Provisions | 29 | **** | 9,664 | 10,985 | 2,958 | |||||
| Loans and borrowings | 30 | **** | 1,500 | – | – | |||||
| Loan note instruments | 31 | **** | 8,313 | 6,447 | – | |||||
| Cash-settled share-based payment | 12.1 | **** | 411 | 374 | 1,029 | |||||
| Lease liabilities | 19 | **** | 199 | 41 | 181 | |||||
| Total non-current liabilities | **** | **** | 68,505 | 63,970 | 45,061 | |||||
| Cash-settled share-based payment | 12.1 | **** | 634 | 920 | 1,188 | |||||
| Income tax payable | 16 | **** | 2,958 | 10 | 1,324 | |||||
| Lease liabilities | 19 | **** | 95 | 167 | 132 | |||||
| Loans and borrowings | 30 | **** | 1,174 | – | – | |||||
| Loan note instruments | 31 | **** | 855 | 665 | 7,104 | |||||
| Trade and other payables | 32 | **** | 26,647 | 20,503 | 17,454 | |||||
| Overdrafts | 23 | **** | 12,928 | 17,740 | 5,239 | |||||
| Liabilities associated with assets held for sale | 24 | **** | 104 | 128 | – | |||||
| Total current liabilities | **** | **** | 45,395 | 40,133 | 32,441 | |||||
| Total liabilities | **** | **** | 113,900 | 104,103 | 77,502 | |||||
| Total equity and liabilities | **** | **** | 348,364 | 328,303 | 235,191 |
* Refer to note 41.
The accompanying notes on pages 13 to 82 are an integral part of these consolidated financial statements.
9
Caledonia Mining Corporation Plc
Consolidated statements of changes in equity
For the years ended December 31,
(in thousands of United States Dollars, unless indicated otherwise)
| Note | Share capital | Foreign currency<br><br> <br>translation reserve | Contributed<br><br> <br>surplus | Equity-settled<br><br> <br>share-based<br><br> <br>payment reserve | Retained loss | Total | Non-controlling<br><br> <br>interests (“NCI”) | Total equity | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance January 1, 2022^*^ | 82,667 | (9,325 | ) | 132,591 | 14,513 | (82,793 | ) | 137,653 | 14,810 | 152,463 | ||||||||||||
| Transactions with owners: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Dividends declared | 35 | – | – | – | – | (8,975 | ) | (8,975 | ) | (1,814 | ) | (10,789 | ) | |||||||||
| Share-based payments: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Shares issued on settlement of incentive plan awards | 12.1 | 804 | – | – | – | – | 804 | – | 804 | |||||||||||||
| Equity-settled share-based expense | 12.2 | – | – | – | 484 | – | 484 | – | 484 | |||||||||||||
| Total comprehensive income: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Profit for the year^*^ | – | – | – | – | 11,239 | 11,239 | 3,950 | 15,189 | ||||||||||||||
| Other comprehensive income for the year | – | (462 | ) | – | – | – | (462 | ) | – | (462 | ) | |||||||||||
| Balance December 31, 2022^*^ | 83,471 | (9,787 | ) | 132,591 | 14,997 | (80,529 | ) | 140,743 | 16,946 | 157,689 | ||||||||||||
| Transactions with owners: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Dividends declared | 35 | – | – | – | – | (8,752 | ) | (8,752 | ) | (1,512 | ) | (10,264 | ) | |||||||||
| Share-based payments: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Shares issued on settlement of incentive plan awards | 12.1 | 351 | – | – | – | – | 351 | – | 351 | |||||||||||||
| Equity-settled share-based expense | 12.2 | – | – | – | 640 | – | 640 | – | 640 | |||||||||||||
| Shares issued: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Equity raise (net of transaction cost) | 25 | 15,569 | – | – | – | – | 15,569 | – | 15,569 | |||||||||||||
| Bilboes acquisition | 65,677 | – | – | – | – | 65,677 | – | 65,677 | ||||||||||||||
| Total comprehensive income: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| (Loss) profit for the year^*^ | – | – | – | – | (7,862 | ) | (7,862 | ) | 3,022 | (4,840 | ) | |||||||||||
| Other comprehensive income for the year | – | (622 | ) | – | – | – | (622 | ) | – | (622 | ) | |||||||||||
| Balance at December 31, 2023^*^ | 165,068 | (10,409 | ) | 132,591 | 15,637 | (97,143 | ) | 205,744 | 18,456 | 224,200 |
* Restated, refer to note 41.
10
Caledonia Mining Corporation Plc
Consolidated statements of changes in equity (continued)
For the years ended December 31,
(in thousands of United States Dollars, unless indicated otherwise)
| Note | Share capital | Foreign currency<br><br> <br>translation reserve | Contributed<br><br> <br>surplus | Equity-settled<br><br> <br>share-based<br><br> <br>payment reserve | Retained loss | Total | Non-controlling<br><br> <br>interests (“NCI”) | Total equity | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance December 31, 2023 | 165,068 | (10,409 | ) | 132,591 | 15,637 | (97,143 | ) | 205,744 | 18,456 | 224,200 | |||||||||||||
| Transactions with owners: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Dividends declared | 35 | – | – | – | – | **** | (10,752 | ) | **** | (10,752 | ) | **** | (3,024 | ) | **** | (13,776 | ) | ||||||
| Share-based payments: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Share issued on settlement of incentive plan awards | 12 | **** | 303 | – | – | – | – | **** | 303 | – | **** | 303 | |||||||||||
| Equity-settled share-based expense | 12.2 | – | – | – | **** | 762 | – | **** | 762 | – | **** | 762 | |||||||||||
| Shares issued: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Options exercised | 12.2 | **** | 37 | – | – | – | – | **** | 37 | – | **** | 37 | |||||||||||
| Total comprehensive income: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Profit for the year | – | – | – | – | **** | 17,899 | **** | 17,899 | **** | 5,155 | **** | 23,054 | |||||||||||
| Other comprehensive income for the year | – | **** | (116 | ) | – | – | – | **** | (116 | ) | – | **** | (116 | ) | |||||||||
| Balance at December 31, 2024 | **** | **** | **** | 165,408 | **** | (10,525 | ) | **** | 132,591 | **** | 16,399 | **** | (89,996 | ) | **** | 213,877 | **** | 20,587 | **** | 234,464 | |||
| Note | 25 | 26 | 26 | 26 | 28 |
The accompanying notes on pages 13 to 82 are an integral part of these consolidated financial statements.
11
Caledonia Mining Corporation Plc
Consolidated statements of cash flows
For the years ended December 31,
(in thousands of United States Dollars, unless indicated otherwise)
| Note | 2024 | 2023 | 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Cash inflow from operations | 33 | **** | 55,438 | 26,398 | 49,657 | |||||
| Interest received | **** | **** | 26 | 39 | 17 | |||||
| Finance costs paid | 15 | **** | (2,864 | ) | (2,462 | ) | (192 | ) | ||
| Tax paid | 16 | **** | (10,645 | ) | (9,206 | ) | (6,866 | ) | ||
| Net cash inflow from operating activities | **** | **** | 41,955 | 14,769 | 42,616 | |||||
| Cash flows used in investing activities | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Acquisition of property, plant and equipment | 18 | **** | (27,477 | ) | (28,556 | ) | (41,495 | ) | ||
| Acquisition of exploration and evaluation assets | 17 | **** | (3,835 | ) | (1,837 | ) | (2,596 | ) | ||
| Proceeds from derivative financial instruments | – | 178 | – | |||||||
| Acquisition of Put options | 11.1 | **** | (743 | ) | (946 | ) | (478 | ) | ||
| Proceeds from call options | – | – | 416 | |||||||
| Acquisition of call options | – | – | (176 | ) | ||||||
| Net cash used in investing activities | **** | **** | (32,055 | ) | (31,161 | ) | (44,329 | ) | ||
| Cash flows from financing activities | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Dividends paid | 35 | **** | (12,302 | ) | (11,099 | ) | (8,906 | ) | ||
| Payment of lease liabilities | 19 | **** | (182 | ) | (184 | ) | (150 | ) | ||
| Shares issued – equity raise (net of transaction cost) | 25 | – | 15,569 | – | ||||||
| Proceeds from loans and borrowings | 30 | **** | 3,000 | – | – | |||||
| Repayments of loans and borrowings | 30 | **** | (326 | ) | – | – | ||||
| Loan notes - Motapa payment | – | (7,250 | ) | – | ||||||
| Loan notes - solar bond issue receipts (net of transaction cost) | 31.1 | **** | 1,970 | 6,895 | – | |||||
| Repayment of gold loan | – | – | (3,698 | ) | ||||||
| Proceeds from share options exercised | 25 | **** | 37 | – | – | |||||
| Net cash (used in) / from financing activities | **** | **** | (7,803 | ) | 3,931 | (12,754 | ) | |||
| Net increase / (decrease) in cash and cash equivalents | **** | **** | 2,097 | (12,461 | ) | (14,467 | ) | |||
| Effect of exchange rate fluctuations on cash and cash equivalents | **** | **** | 267 | (67 | ) | (302 | ) | |||
| Net cash and cash equivalents at the beginning of the year | **** | **** | (11,032 | ) | 1,496 | 16,265 | ||||
| Net cash and cash equivalents at the end of the year | 23 | **** | (8,668 | ) | (11,032 | ) | 1,496 |
The accompanying notes on pages 13 to 82 are an integral part of these consolidated financial statements.
12
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 1 | Reporting entity |
|---|
Caledonia Mining Corporation Plc (“Caledonia” or the “Company”) is a company domiciled in Jersey, Channel Islands. The Company’s registered office address is B006 Millais House, Castle Quay, St Helier, Jersey, Channel Islands.
These consolidated financial statements of the Company and its subsidiaries (the “Group”) comprise the consolidated statements of financial position as at December 31, 2024 and 2023 and January 1, 2023, the consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for each of the years ended December 31, 2024, 2023 and 2022, disclosure notes, material accounting policies and other explanatory information. The Group’s primary involvement is in the operation of a gold mine and the exploration and development of mineral properties for precious metals.
Caledonia’s shares are listed on the NYSE American LLC stock exchange (symbol – “CMCL”). Depository interests in Caledonia’s shares are admitted to trading on AIM of the London Stock Exchange plc (symbol – “CMCL”). Caledonia listed on the Victoria Falls Stock Exchange (“VFEX”) (symbol – “CMCL”) on December 2, 2021. Caledonia voluntary delisted from the Toronto Stock Exchange (the “TSX”) on June 19, 2020. After the delisting the Company remains a Canadian reporting issuer and has to comply with Canadian securities laws until it demonstrates that Canadian shareholders represent less than 2% of issued share capital.
| 2 | Basis of preparation |
|---|---|
| 2.1 | Statement of compliance |
| --- | --- |
The consolidated financial statements have been prepared on a going concern basis, in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board.
The consolidated financial statements were approved for issue by the Board of Directors on March 31, 2025.
| 2.2 | Basis of measurement |
|---|
The consolidated financial statements have been prepared on the historical cost basis except for:
| • | cash-settled share-based payment arrangements measured at fair value on grant and re-measurement dates; |
|---|---|
| • | equity-settled share-based payment arrangements measured at fair value on the grant date; and |
| • | derivative financial assets and derivative financial liabilities measured at fair value. |
| 2.3 | Functional currency |
| --- | --- |
The consolidated financial statements are presented in United States Dollars (“$” or “US Dollars” or “USD” or “US$”), which is also the functional currency of the Company. All financial information presented in US Dollars has been rounded to the nearest thousand, unless indicated otherwise. Refer to note 9 for foreign exchange effects related to Zimbabwean real-time gross settlement, bond notes or bond coins (“RTGS$”) and the Zimbabwe Gold ("ZiG").
13
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 2 | Basis of preparation (continued) |
|---|---|
| 2.4 | Prior year error |
| --- | --- |
In preparation of the consolidated financial statements for the year ended December 31, 2024, an error was identified in the calculation of the deferred tax liabilities of Blanket. The change impacts the Company’s previously filed consolidated financial statements from December 31, 2019. The non-cash restatement was corrected in the opening balances from January 1, 2022 in these consolidated financial statements, as presented in note 41.
| 3 | Use of accounting assumptions, estimates and judgements |
|---|
In preparing these consolidated financial statements, management has made accounting assumptions, estimates and judgements that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Changes in estimates are recognised prospectively.
| 3.1 | Assumptions and estimation uncertainties |
|---|---|
| 3.1.1 | Depreciation of property, plant and equipment |
| --- | --- |
Depreciation on mine development, infrastructure and other assets in the production phase is computed on the units-of-production method over the life-of-mine based on the estimated quantities of reserves (proven and probable) and resources (measured, indicated and inferred), which are planned to be extracted in the future from known mineral deposits. Where mine development, infrastructure and other assets have a shorter useful life than the life-of-mine, they are depreciated over their useful life. Confidence in the existence, commercial viability and economical recovery of reserves and resources included in the life-of-mine may be based on historical experience and available geological information. This is in addition to the drilling results obtained by the Group and management’s knowledge of the geological setting of the surrounding areas, which would enable simulations and extrapolations to be done with a sufficient degree of accuracy. In instances where management is able to demonstrate the economic recovery of resources with a high level of confidence, such additional resources, are included in the calculation of depreciation.
Other items of property, plant and equipment are depreciated as described in 4.9.3.
| 3.1.2 | Mineral reserves and resources |
|---|
Mineral reserves and resources are estimates of the amount of product that can be economically and legally extracted. In order to calculate the reserves and resources, estimates and assumptions are required about a range of geological, technical and economic factors, including but not limited to quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity prices and exchange rates. Estimating the quantity and grade of mineral reserves and resources requires the size, shape and depth of orebodies to be determined by analysing geological data such as the logging and assaying of drill samples. This process may require complex and difficult geological assumptions and calculations to interpret the data. Estimates of mineral reserves and resources may change due to the change in economic assumptions used to estimate mineral reserves and resources and due to additional geological data becoming available during the course of operations.
14
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 3 | Use of accounting assumptions, estimates and judgements (continued) |
|---|---|
| 3.1 | Assumptions and estimation uncertainties (continued) |
| --- | --- |
| 3.1.2 | Mineral reserves and resources (continued) |
| --- | --- |
The Group estimates its reserves (proven and probable) and resources (measured, indicated and inferred) based on information compiled by a Qualified Person in terms of the Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and the United States Securities and Exchange Commission’s Subpart 1300 of Regulation S-K (“Subpart 1300”) relating to geological and technical data of the size, depth, shape and grade of the ore body and suitable production techniques and recovery rates. Such an analysis requires geological and engineering assumptions to interpret the data. These assumptions include:
| • | correlation between drill-hole intersections where multiple reefs intersect; |
|---|---|
| • | continuity of mineralisation between drill-hole intersections within recognised reefs; and |
| --- | --- |
| • | appropriateness of the planned mining methods. |
| --- | --- |
The Group estimates and reports reserves and resources in accordance with Subpart 1300 and NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) – CIM Definition Standards for Mineral Resources and Mineral Reserves. Complying with the CIM code, NI 43-101 requires the use of reasonable assumptions to calculate the recoverable resources. These assumptions include:
| • | the gold price based on current market price and the Group’s assessment of future prices; |
|---|---|
| • | estimated future on-mine costs, sustaining and non-sustaining capital expenditures; |
| --- | --- |
| • | cut-off grade; |
| --- | --- |
| • | dimensions and extent, determined both from drilling and mine development, of ore bodies; and |
| --- | --- |
| • | planned future production from measured, indicated and inferred resources. |
| --- | --- |
Changes in reported reserves and resources may affect the Group’s financial results and position in several ways, including the following:
| • | asset carrying values may be affected due to changes in the estimated cash flows (i.e. Impairment); |
|---|---|
| • | depreciation and amortisation charges to profit or loss may change as these are calculated on the unit-of production method or where useful lives of an asset change; and |
| --- | --- |
| • | decommissioning, site restoration and environmental provisions and resources which may affect expectations about the timing or cost of these activities. |
| --- | --- |
| 3.1.3 | Impairment |
| --- | --- |
Non-financial assets
At each reporting date, the Group determines if impairment indicators exist and, if present, performs an impairment review of the non-financial assets held in the Group. The exercise is subject to various assumptions and estimates. Refer to note 4.3 for more information.
15
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 3 | Use of accounting assumptions, estimates and judgements (continued) |
|---|---|
| 3.1 | Assumptions and estimation uncertainties (continued) |
| --- | --- |
| 3.1.3 | Impairment (continued) |
| --- | --- |
Non-derivative financial assets
The Group uses a simplified approach in accounting for trade receivables and records the loss allowance as lifetime expected credit losses. When measuring expected credit losses, the Group uses reasonable and supportable forward-looking information, which is based on the assumptions for the future movement of different economic drivers and how these drivers will affect each other. Loss given default is an estimate of the loss arising on default. It is based on the expected shortfalls in contractual cash flows. The Group uses a provision matrix to calculate the probability of default, which includes historical data, assumptions and expectations of future conditions.
| 3.1.4 | Share-based payment transactions |
|---|
Equity-settled share-based payment arrangements
The Group measures the cost of equity-settled share-based payment transactions with employees, directors and Blanket’s indigenous shareholders (refer to note 5) by reference to the fair value of the equity instruments on the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the appropriate valuation model and considering the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model, including the expected life of the share option, volatility and dividend yield.
Where the Company granted the counterparty to a share-based payment award the choice of settlement in cash or shares, the equity component is measured as the difference between the fair value of the goods and services and the fair value of the cash-settled share-based payment liability at the date when the goods and services are received at the measurement date. For transactions with employees, the equity component is zero.
Option pricing models require the input of assumptions, including the expected price volatility. Changes in the subjective input assumptions can materially affect the fair value estimate. Therefore, the existing models may not necessarily provide a reliable single measure of the fair value of the Group’s share options.
Additional information about significant assumptions and estimates used to determine the fair value of equity-settled share-based payment transactions are disclosed in note 12.2.
Cash-settled share-based payment arrangements
The fair value of the amount payable to employees regarding share-based awards that will be settled in cash is recognised as an expense with a corresponding increase in liabilities over the period over which the employee becomes unconditionally entitled to payment. The liability is re-measured at each reporting date. Any change in the fair value of the liability is recognised in profit or loss.
Additional information about significant assumptions and estimates used to determine the fair value of cash-settled share-based payment transactions are disclosed in note 12.1.
16
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 3 | Use of accounting assumptions, estimates and judgements(continued) |
|---|---|
| 3.1 | Assumptions and estimation uncertainties (continued) |
| --- | --- |
| 3.1.5 | Taxes |
| --- | --- |
Significant assumptions and estimates are required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain.
In October 2018, the RTGS$ was introduced in Zimbabwe at 1:1 to the USD. It was deemed the only legal tender in Zimbabwe and all liabilities held previously were assumed to be denominated in RTGS$. From January 1, 2019 Blanket Mine was required to implement Public Notice 26 of 2019 - Submission of Income Tax Returns and Payments of QPDs:2019 (“PN26”). Paragraph (a) of PN26 set the exchange rate between the RTGS$ and the USD at 1:1 on day 1 (Subsequently, the RTGS$ devalued to 30,674:1 USD before it was replaced by the ZiG on April 5, 2024 using an exchange rate of ZiG1: RTGS$ 2,499). PN26 (b) stated that “All taxable income is therefore expressed in RTGS$ and tax calculated thereon”. As a result of PN26, taxable income at Blanket Mine was calculated in RTGS$ for the period January 1, 2019 to December 31, 2022. Future tax regime changes required future RTGS$ allowances during this period to be claimed against RTGS$ taxable income.
In 2023, the Zimbabwe Revenue Authority (“ZIMRA”) issued Public Notice 20 (“PN20”). PN20 provided clarity on the interpretation of Section 37AA of the Income Tax Act [Chapter 23:06] of Zimbabwe, which requires taxpayers to submit separate tax returns where any part of the income from trade or investment is earned in foreign currency.
Section 37AA stated that the calculation of taxable income is expressed in the currency of the transaction and that the payment of the tax payable be made in proportion with the currency the revenue is earned in. The section further provides that the RTGS$ should be converted to US$ using the average auction rate of exchange for the year of assessment, with the same applying to US$ amounts that need to be converted to RTGS$.
On April 5, 2024 the RTGS$ was replaced by the ZiG.
In 2024, the Finance Act stated that with effect from July 1, 2024, where a company received or accrued more than 50% of the total income in foreign currency, such a company shall account for tax as if half of the income is earned in foreign currency. Management believes they have adequately provided for the probable outcome of tax-related matters; however, the final outcome or future outcomes anticipated in calculating the tax liabilities may result in a materially different outcome than the amount included in the tax liabilities. In addition, the Group further makes assumptions and estimates when recognising deferred tax assets relating to tax losses carried forward to the extent that there are sufficient future taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same taxable entity against which the unused tax losses may be utilised or sufficient estimated future taxable income against which the losses can be utilised.
17
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 3 | Use of accounting assumptions, estimates and judgements(continued) |
|---|---|
| 3.1 | Assumptions and estimation uncertainties (continued) |
| --- | --- |
| 3.1.6 | Blanket Mine's indigenisation transaction |
| --- | --- |
The initial indigenisation transaction and modifications to the indigenisation transaction of Blanket Mine required management to make significant assumptions and estimates which are explained in note 5.
| 3.1.7 | Exploration and evaluation ("E&E") assets |
|---|
The Group also makes assumptions and estimates regarding the technical feasibility and commercial viability of its mineral projects and the possible impairment of E&E assets by evaluating whether it is likely that future economic benefits will flow to the Group, which may be based on assumptions about future events or circumstances e.g. such as the completion of a feasibility study indicating construction, funding and economic returns that are sufficient. Assumptions and estimates made may change if new information becomes available. If information becomes available suggesting that the recovery of expenditures is unlikely, the amount capitalised is written off in profit or loss in the period the new information becomes available.
The recoverability of the carrying amount of exploration and evaluation assets depends on the availability of sufficient funding to bring the properties into commercial production, the price of the products to be recovered and the undertaking of profitable mining operations. As a result of these uncertainties, the actual amount recovered may vary significantly from the carrying amount.
| 3.1.8 | Site restoration provision |
|---|
A site restoration provision has been calculated for the Blanket Mine and the Bilboes, Maligreen and Motapa projects based on an independent analysis of the rehabilitation costs as performed in 2024. For projects, that gets capitalised to exploration and evaluation projects, the restoration costs are recognised at the current estimated cost of restoration and is undiscounted. Subsequently the costs capitalised are not amortised and the provision is not unwound. For the Blanket Mine the inflationary effect on current restoration costs are applied and then discounted to arrive at the present value of the provision. Assumptions, based on the current economic environment, have been made that management believes are a reasonable basis for estimating the future liability. These estimates take into account any material changes to the assumptions that occur when reviewed by management. Significant changes in estimates of contamination estimates, restoration standards, and techniques will result in changes to the provision from period to period. Actual rehabilitation costs will ultimately depend on future market prices for the rehabilitation. The final cost of the currently recognised site rehabilitation provision may be higher or lower than currently provided for (refer to note 29).
Also refer to note 29 for how site restoration provisions are estimated for properties in the exploration and evaluation phase.
| 3.2 | Judgements |
|---|
For judgement applied to:
| • | determine functional currency of entities in the Group and the use of the interbank rate of exchange to translate RTGS$ (before April 5, 2024)/ ZiG, refer to note 9, |
|---|---|
| • | impairments, refer to note 17 and 18. |
| --- | --- |
18
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 4 | Material accounting policies |
|---|
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements. In addition, the accounting policies have been applied consistently by the Group.
| 4.1 | Basis of consolidation |
|---|---|
| 4.1.1 | Subsidiaries and structured entities |
| --- | --- |
Subsidiaries and certain structured entities are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variability in returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
| 4.2 | Revenue |
|---|
Revenue comprises the sale of bullion.
Revenue is measured based on the consideration specified in a contract with the customer. Revenue is recognised when bullion is transferred to the customer and the sales price is fixed. It is at this point that the customer obtains control of the bullion and recovery of the consideration is probable.
In accordance with the requirements of the Zimbabwe Government, all gold must be delivered to Fidelity Gold Refinery (Private) Limited (Fidelity), a subsidiary of the Reserve Bank of Zimbabwe, for initial in-country refining.
| 4.2.1 | Blanket |
|---|
In accordance with the requirements of the Zimbabwe Government, 25% of the gold had to be sold to Fidelity and 75% may have been exported under the gold dealing licence held by Fidelity and proceeds were received 75% in USD and 25% in RTGS$ before April 5, 2024 and from April 5, 2024 in ZiG.
On February 6, 2025, the RBZ issued a Monetary Policy Statement which, inter alia, included a provision that with immediate effect exporters such as Blanket are required to “surrender” 30% of their export proceeds in return for ZiG. This means the arrangement outlined above has changed such that Blanket exports 70% of its gold production and sells the remaining 30% to Fidelity for ZiG.
A portion of unrefined metals produced by Blanket is exported by Caledonia to Al Etihad Gold FZCO (“AEG”, an accredited Dubai Good Delivery refinery) and Stonex Financial Limited, which make payment to Caledonia's bank account in Zimbabwe in USD.
| 4.2.2 | Bilboes |
|---|
Revenue from the sale of precious metals at Bilboes is recognised when the unrefined metal is accepted at the refinery (“Local lodgment date”) by Fidelity. Control is transferred and the receipt of proceeds is substantially assured at point of delivery to the refiner. Bilboes revenue during the year was recognised from sales to Fidelity as a “small-scale producer” measured at the previous day’s 6pm London Bullion Market Association price less a 5% discount. The revenue was received 100% in USD and settlement occurs immediately after the bullion is delivered.
19
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 4 | Material accounting policies (continued) |
|---|---|
| 4.3 | Impairment |
| --- | --- |
| 4.3.1 | Expected credit losses on financial assets |
| --- | --- |
The Group applies the IFRS 9 simplified model and recognises lifetime expected credit losses for all trade receivables as these items do not have a significant financing component. In measuring the expected credit losses, the trade receivables have been assessed individually as they possess different credit risk characteristics. Trade receivables have been assessed based on the days past due. The expected loss rates are based on the payment profile for gold sales over the past 48 months prior to December 31, of each year reported. The historical rates are adjusted to reflect current and forward-looking macroeconomic factors, i.e. (interest rate, country risk, and risk-free rate) affecting the customer’s ability to settle the amount outstanding. The Group considers a trade receivable to be in default when the amount is 90 days past due from export- or local lodgement date. Failure to make payments within 90 days from the lodgement date and failure to engage with the Group on alternative payment arrangements, amongst others, are considered indicators of no reasonable expectation of recovery. Trade and other receivables are written off (i.e. derecognised) when there is no reasonable expectation of recovery.
| 4.3.2 | Non-financial assets |
|---|
The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit” or “CGU”). The Group’s corporate assets do not generate separate cash inflows. If there is an indication that a CGU to which a corporate asset is allocated may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs.
An impairment loss is recognised if the carrying amount of a CGU exceeds its estimated recoverable amount. Impairment losses recognised in respect of CGUs are allocated to reduce the carrying amount of assets in the unit (group of units) on a pro rata basis. Impairment losses recognised in prior years are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been an indication of reversal and a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Refer to note 18 for impaired property, plant and equipment.
20
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 4 | Material accounting policies (continued) |
|---|---|
| 4.3 | Impairment (continued) |
| --- | --- |
| 4.3.3 | Impairment of Explorations and evaluation ("E&E") assets |
| --- | --- |
The test for impairment of E&E assets can combine several CGUs as long as the combination is not larger than a segment. The definition of a CGU does, however, change once development activities have begun. There are specific impairment triggers for E&E assets. Despite certain relief in respect of impairment triggers and the level of aggregation, the impairment standard is applied in measuring the impairment of E&E assets. Reversals of impairment losses are required in the event that the circumstances that resulted in impairment have changed.
E&E assets are assessed for impairment only when facts and circumstances suggest that the carrying amount of an E&E asset may exceed its recoverable amount. Indicators of impairment include the following:
| • | The entity's right to explore in the specific area has expired or will expire in the near future and is not expected to be renewed. |
|---|---|
| • | Substantive expenditure on further E&E activities in the specific area is neither budgeted nor planned in future. |
| --- | --- |
| • | The entity has not discovered resources with economic potential and as a result has decided to discontinue such activities in the specific area. |
| --- | --- |
| • | Even if development is likely to proceed, the entity has sufficient data indicating that the carrying amount of the asset is unlikely to be recovered in full from successful development or by sale. |
| --- | --- |
| 4.4 | Share-based payment transactions |
| --- | --- |
| 4.4.1 | Equity-settled share-based payments |
| --- | --- |
The grant date fair value of equity-settled share-based payment awards granted to employees and directors is recognised as an expense, with a corresponding increase in equity, over the vesting period of the award. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market vesting conditions at the vesting date.
Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in profit or loss.
Additional information about significant judgements, estimates and the assumptions used to estimate the fair value of equity-settled share-based payment transactions are disclosed in note 12.2.
| 4.4.2 | Cash-settled share-based payments to employees and directors |
|---|
The grant date fair value of cash-settled awards granted to employees and directors is recognised as an expense, with a corresponding increase in the liability, over the vesting period of the awards. At each reporting date the fair value of the awards is re-measured with a corresponding adjustment to profit or loss. Additional information about significant judgements, estimates and the assumptions used to estimate the fair value of cash-settled share-based payment transactions are disclosed in note 12.1.
21
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 4 | Material accounting policies (continued) |
|---|---|
| 4.5 | Foreign currency |
| --- | --- |
| 4.5.1 | Foreign operations |
| --- | --- |
As stated in note 2.3 the presentation currency of the Group is the US Dollars. The functional currency of the Company and all its subsidiaries is the US Dollars except for the South African subsidiary that uses the South African Rand (“ZAR”) as its functional currency. Subsidiary financial statements have been translated to the presentation currency as follows:
| • | assets and liabilities are translated using the exchange rate at year end; and |
|---|---|
| • | income, expenses and cash flow items are translated using the rate that approximates the exchange rates at the dates of the transactions. |
| --- | --- |
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from the item are considered to form part of the net investment in a foreign operation and are recognised in Other Comprehensive Income (“OCI”).
If settlement is planned or likely in the foreseeable future, foreign exchange gains and losses are included in profit or loss. When settlement occurs, the settlement will not be regarded as a partial disposal and accordingly the foreign exchange gain or loss previously recognised in OCI is not reclassified to profit or loss/reallocated to NCI.
When the Group disposes of its entire interest in a foreign operation or loses control over a foreign operation, the foreign currency gains or losses accumulated in OCI related to the foreign operation are reclassified to profit or loss. If the Group disposes of part of an interest in a foreign operation which remains a subsidiary, a proportionate amount of foreign currency gains or losses accumulated in OCI related to the subsidiary are reattributed between controlling and non-controlling interests.
All resulting translation differences are reported in OCI and accumulated in the foreign currency translation reserve.
| 4.5.2 | Foreign currency translation |
|---|
In preparing the financial statements of the Group entities, transactions in currencies other than the functional currency (foreign currencies) of these Group entities are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting date, monetary assets and liabilities are translated using the spot foreign exchange rate. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All gains and losses on translation of these foreign currency transactions are included in profit or loss for the year.
In applying IAS 21, management determined that the US Dollars remained the primary currency in which the Group’s Zimbabwean entities operate, as:
| • | the majority of revenue is received in US Dollars; |
|---|---|
| • | the gold price receivable was calculated in US Dollars; |
| --- | --- |
| • | the majority of costs are calculated by reference to the US Dollars if denominated in RTGS$ (before April 5, 2024)/ ZiG or is paid in US Dollars; and |
| --- | --- |
| • | Income tax liabilities calculated in RTGS$ (before April 5, 2024)/ ZiG are settled predominantly in US Dollars. |
| --- | --- |
22
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 4 | Material accounting policies (continued) |
|---|---|
| 4.5 | Foreign currency (continued) |
| --- | --- |
| 4.5.2 | Foreign currency translation (continued) |
| --- | --- |
The application of IAS 21, the advent of Statutory Instrument 142 (issued by Zimbabwean Government) and the devaluation of the RTGS$ (before April 5, 2024)/ ZiG against the US Dollars had an impact on the US Dollars value of RTGS$ (before April 5, 2024)/ ZiG denominated monetary assets and liabilities such as income and deferred tax liabilities, loans and borrowings, trade and other payables and to a lesser extent monetary asset such as cash held in RTGS$ (before April 5, 2024)/ ZiG.
Refer to note 9 for more information.
| 4.6 | Finance income and finance cost |
|---|
Finance income comprises interest income on funds invested. Finance income is recognised as it accrues in profit or loss, using the effective interest method. Finance cost comprise interest expense on the rehabilitation provisions, interest on bank overdraft balances, effective interest on leases, loans and borrowings, loan notes and also includes commitment costs on overdraft facilities. Finance cost is recognised in profit or loss using the effective interest rate method.
| 4.7 | Taxes |
|---|---|
| 4.7.1 | Income tax |
| --- | --- |
Tax expense comprises current and deferred tax. These expenses are recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.
| 4.7.2 | Current tax |
|---|
Current tax is the tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date. Current tax includes withholding tax on management fees and dividends paid between companies within the Group.
| 4.7.3 | Deferred tax |
|---|
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future. The tax and exchange rates applied are based on the laws that have been enacted, substantively enacted or the interbank exchange rates that prevail at the reporting date.
23
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 4 | Material accounting policies (continued) |
|---|---|
| 4.7 | Taxes (continued) |
| --- | --- |
| 4.7.3 | Deferred tax (continued) |
| --- | --- |
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
| 4.8 | Earnings per share |
|---|
The Group presents basic and diluted earnings per share (“EPS”) data for its shares. Basic EPS is calculated by dividing the adjusted profit or loss attributable to shareholders of the Group (see note 27) by the weighted average number of shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to shareholders and the weighted average number of shares outstanding, adjusted for own shares held, for the effects of all dilutive potential shares, which comprise share options granted.
| 4.9 | Property, plant and equipment |
|---|---|
| 4.9.1 | Recognition and measurement |
| --- | --- |
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, borrowing costs on qualifying assets, the costs of dismantling and removing the items and restoring the site on which they are located. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised in profit or loss. Refer to note 4.3.2 for the impairment of non-financial assets.
| 4.9.2 | Subsequent costs |
|---|
The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
24
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 4 | Material accounting policies (continued) |
|---|---|
| 4.9 | Property, plant and equipment (continued) |
| --- | --- |
| 4.9.3 | Depreciation |
| --- | --- |
Depreciation is calculated to write off the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. When the asset is ready for use in the manner intended by management, depreciation of mine development, infrastructure and other assets is calculated on the unit-of-production method using the measured, indicated and estimated economical inferred mineral resources in Blanket’s life-of-mine plan (“LoMP”). Resources that are not included in the LoMP are not included in the calculation of depreciation.
For other categories, depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.
Mineral resources and reserves categorised and reported in compliance with the definitions embodied in the CIM Definition Standards as incorporated into the NI 43-101 are reported inclusive of mineral reserves. Mineral resources and reserves categorised and reported in compliance with Subpart 1300 are reported exclusive of mineral reserves.
Inferred mineral resources are considered in the LoMP to the extent these mineral resources are above the cut-off, economically viable and of sufficient confidence, are expected to be upgraded and form part of eventual extraction and as a result are included in the calculation of depreciation. Refer to note 18 for the evaluation of the cut-off.
Mineral resources are sub-divided, in order of increasing geological confidence, into inferred, indicated and measured categories. An inferred mineral resource has a lower level of confidence than that applied to an indicated mineral resource. An indicated mineral resource has a higher level of confidence than an inferred mineral resource but has a lower level of confidence than a measured mineral resource.
Mineral resources in the measured and indicated mineral resource classifications have been converted into proven and probable mineral reserves respectively, by applying the applicable modifying factors and reasonable prospects of economic extraction.
Land is not depreciated.
The calculation of the production rate units could be affected to the extent that actual production in the future is different from the current forecast production. This would generally result from the extent to which there are significant changes in any of the factors or assumptions used in estimating mineral reserves and resources.
These factors include:
| • | changes in mineral reserves and resources; |
|---|---|
| • | differences between actual commodity prices and commodity price assumptions; |
| --- | --- |
| • | unforeseen operational issues at mine sites; and |
| --- | --- |
| • | changes in capital, operating, mining, processing and reclamation costs, discount rates and foreign exchange rates. |
| --- | --- |
25
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 4 | Material accounting policies (continued) |
|---|---|
| 4.9 | Property, plant and equipment (continued) |
| --- | --- |
| 4.9.3 | Depreciation (continued) |
| --- | --- |
The estimated useful lives for 2024, 2023 and 2022 are as follows:
| • | buildings 10 to 15 years; |
|---|---|
| • | plant and equipment 5 to 10 years; |
| --- | --- |
| • | fixtures and fittings including computers 3 to 10 years; |
| --- | --- |
| • | motor vehicles 4 years; |
| --- | --- |
| • | right of use assets 3 to 6 years (determined by lease term); and |
| --- | --- |
| • | mine development, infrastructure and other assets in production, units-of-production method. |
| --- | --- |
Depreciation methods, useful lives and residual values are reviewed each financial year and adjusted if appropriate. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Assets under construction’s useful life and residual values will be assessed once the asset is available for use.
| 4.10 | Exploration and evaluation assets |
|---|
Qualifying exploration costs are capitalised as incurred. Costs incurred before the legal rights to explore are obtained are recognised in profit or loss. The costs related to speculative drilling on unestablished orebodies at the Blanket Mine, general administrative or overhead costs are expensed as incurred. Exploration and evaluation costs capitalised are disclosed under Exploration and evaluation assets. Qualifying direct expenditures include such costs as mineral rights, options to acquire mineral rights, materials used, surveying costs, drilling costs, payments made to contractors, direct administrative costs and depreciation on property, plant and equipment during the exploration phase.
Costs not directly attributable to exploration and evaluation activities, including general administrative overhead costs, are expensed in the year they occur.
Once the technical feasibility and commercial viability of extracting the mineral resource have been determined, the property is considered to be a mine under development and moved to the mine development, infrastructure and other asset category within property, plant and equipment. Capitalised direct costs related to the acquisition, exploration and development of mineral properties remain capitalised, at their initial cost, until the properties to which they relate are ready for their intended use, sold, abandoned or management has determined there to be impairment. Exploration and evaluation assets are tested for impairment and before the assets are transferred to mine development, infrastructure and other assets or when an indicator of impairment is identified.
Exploration and evaluation assets are not depreciated.
26
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 4 | Material accounting policies (continued) |
|---|---|
| 4.11 | Inventories |
| --- | --- |
Consumable stores are measured at the lower of cost and net realisable value. The cost of consumable stores is based on the weighted average cost principle. It includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. Gold in process is measured at the lower of cost and net realisable value. The cost of gold in process includes an appropriate share of production overheads based on normal operating capacity and is valued on the weighted average cost principle. Net realisable value is the estimated selling price of gold in the ordinary course of business, less the estimated costs of completion and selling expenses.
| 4.12 | Cash and cash equivalents |
|---|
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less. Bank overdrafts are repayable on demand and form an integral part of the Group’s cash management process. The bank overdraft is included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
| 4.13 | Assets and liabilities associated with assets held for sale |
|---|
Non-current assets, or disposal groups comprising assets and liabilities, are classified as held for sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use.
Such assets, or disposal groups, are generally measured at the lower of their carrying amount or fair value less costs to sell. Impairment losses on initial classification as held for sale or held for distribution and subsequent gains and losses on remeasurement are recognised in profit or loss.
Once classified as held for sale property, plant and equipment are no longer depreciated.
| 4.14 | Financial instruments |
|---|---|
| 4.14.1 | Financial assets |
| --- | --- |
The Group had the following financial assets:
Financial assets at amortised cost
Financial assets at amortised cost comprise trade receivables. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method, less any impairment losses. A trade receivable without a significant financing component is initially measured at the transaction price. Refer to note 4.3.1 for the impairment of receivables.
Fair value through profit or loss
This category comprises the Gold ETF, gold hedge and Put options. These instruments are carried at fair value with changes in fair value recognised in profit or loss as fair value losses on derivative financial instruments. Transaction costs are recognised in profit or loss immediately when incurred. The Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss. Estimations made and further information is referred to in note 11.
27
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 4 | Material accounting policies (continued) |
|---|---|
| 4.14 | Financial instruments (continued) |
| --- | --- |
| 4.14.2 | Financial liabilities |
| --- | --- |
The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired.
Fair value through profit or loss
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value. This category comprises the Gold ETF, gold hedge and Put options.. Estimations made and further information is in note 11. All changes in the fair value of derivative instruments are accounted for in profit or loss and all proceeds and acquisitions are classified under investing activities in the consolidated cash flow statement.
Financial liabilities at amortised cost
Non-derivative financial liabilities are recognised initially on the date at which the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.
Non-derivative financial liabilities consist of bank overdrafts, loans and borrowings and trade and other payables.
Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method.
| 4.15 | Share capital |
|---|
Share capital is classified as equity. Incremental costs directly attributable to the issue, consolidation and repurchase of fractional items of shares and share options are recognised as a deduction from equity, net of any tax effects.
| 4.16 | Provisions |
|---|
A provision is a liability of uncertain timing and amount. A liability is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability if the time value of money is considered significant. The unwinding of the discount is recognised as a finance cost.
28
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 4 | Material accounting policies (continued) |
|---|---|
| 4.17 | Site restoration |
| --- | --- |
The Group recognises liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of property, plant and equipment and exploration and evaluation assets, when those obligations result from the acquisition, construction, development or normal operation of these assets. Production phase restoration costs are recognised at the net present value of future rehabilitation cost estimates arising from the decommissioning of plant and other site preparation work is capitalised to mineral properties along with a corresponding increase in the rehabilitation provision in the period incurred. Future rehabilitation costs are discounted using a pre-tax risk-free rate that reflects the time-value of money. For assets in the exploration and the evaluation phase the restoration costs are recognised at the undiscounted current cost.
The Group’s estimates of rehabilitation costs, which are reviewed annually, could change as a result of changes in regulatory requirements, discount rates, new acquisitions, major events, effects of inflation and assumptions regarding the amount and timing of the future expenditures. Every three years the restoration liability is reviewed and calculated by an independent expert unless a material event occurs that requires an earlier review. These changes are recorded directly to mineral properties with a corresponding entry to the rehabilitation provision. The periodic unwinding of the discount shall be recognised in the profit or loss as a finance costs.
| 4.18 | Employee benefits |
|---|---|
| 4.18.1 | Short-term employee benefits |
| --- | --- |
Short-term employee benefits are expensed when the related services are provided. A liability is recognised for the amount expected to be paid, in respect of salaries, annual leave, bonuses and severance packages, if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
| 4.18.2 | Defined contribution plans |
|---|
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution plan that are due more than 12 months after the end of the period in which the employees render the service are discounted to their present value.
29
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 4 | Material accounting policies (continued) |
|---|---|
| 4.19 | Standards issued but not yet effective |
| --- | --- |
The following standards, amendments to standards and interpretations to existing standards may possibly have an impact on the Group:
| Standard/ Interpretation | Effective date and expected adoption date ^*^ | ||
|---|---|---|---|
| Amendments to the Classification and Measurement of Financial Instruments –Amendments to IFRS 9 and IFRS 7 | On May 30, 2024, the IASB issued targeted amendments to IFRS 9 and IFRS 7 to respond to recent questions arising in practice, and to include new requirements not only for financial institutions but also for corporate entities.<br><br> <br><br><br> <br>These amendments: | January 1, 2026 | |
| ● | clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system; | ||
| ● | clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest criterion; | ||
| ● | add new disclosures for certain instruments with contractual terms that can change cashflows (such as some financial instruments with features linked to the achievement of environment, social and governance targets); and | ||
| ● | update the disclosures for equity instruments designated at fair value through other comprehensive income. | ||
| The Group has completed its assessment of the impact of the above standards and concluded that the standard amendments would not have a material impact on the consolidated financial statements. |
30
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 4 | Material accounting policies (continued) | |||
|---|---|---|---|---|
| 4.19 | Standards issued but not yet effective (continued) | |||
| --- | --- | |||
| Standard/ Interpretation | Effective date and expected adoption date ^*^ | |||
| --- | --- | --- | --- | --- |
| Annual improvements to IFRS Accounting Standards - Volume 11 | On July 18, 2024 the International Accounting Standards Board (IASB) issued the Annual Improvements to IFRS Accounting Standards-Volume 11.<br><br> <br><br><br> <br>The IASB's annual improvements are limited to amendments that either clarify the wording of an IFRS standard or correct relatively minor unintended consequences, oversights or conflicts between requirements in the standards.<br><br> <br><br><br> <br>The amendments contained in the Annual Improvements relate to: | January 1, 2026 | ||
| ● | IFRS 1 First-time Adoption of International Financial Reporting Standards - Hedge Accounting by a First-time Adopter | |||
| ● | IFRS 7 Financial Instruments: Disclosures: | |||
| o | Gain or loss on derecognition | |||
| o | Disclosure of differences between the fair value and the transaction price | |||
| o | Disclosures on credit risk | |||
| ● | IFRS 9 Financial Instruments: | |||
| o | Derecognition of lease liabilities | |||
| o | Transaction price | |||
| ● | IFRS 10 Consolidated Financial Statements - Determination of a ‘de facto agent’ | |||
| ● | IAS 7 Statement of Cash Flows - Cost Method. | |||
| The Group is still in the process of assessing the impact of the above standards. |
31
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 4 | Material accounting policies (continued) | ||
|---|---|---|---|
| 4.19 | Standards issued but not yet effective (continued) | ||
| --- | --- | ||
| Standard/ Interpretation | Effective date and expected adoption date ^*^ | ||
| --- | --- | --- | --- |
| IFRS 18 - Presentation and Disclosure in Financial Statements | IFRS 18 will replace IAS 1 Presentation of Financial Statements. The new standard introduces the following key new requirements. | January 1, 2027 | |
| ● | Entities are required to classify all income and expenses into five categories in the statement of profit or loss, namely the operating, investing, financing, discontinued operations and income tax categories. Entities are also required to present a newly-defined operating profit subtotal. Entities’ net profit will not change. | ||
| ● | Management-defined performance measures (“MPMs”) are disclosed in a single note in the financial statements. | ||
| ● | Enhanced guidance is provided on how to group information in the financial statements. | ||
| In addition, all entities are required to use the operating profit subtotal as the starting point for the statement of cash flows when presenting operating cash flows under the indirect method.<br><br> <br><br><br> <br>The Group is still in the process of assessing the impact of the new standard, particularly with respect to the structure of the Group’s statement of profit or loss, the statement of cash flows and the additional disclosure required for MPMs. |
^*^ Annual periods ending on or after.
New standards, amendments to standards and interpretations adopted from January 1, 2024 had no significant effect on the Group’s accounting policies.
32
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 5 | Blanket Zimbabwe Indigenisation Transaction |
|---|
On February 20, 2012 the Group announced it had signed a Memorandum of Understanding (“MoU”) with the Minister of Youth, Development, Indigenisation and Empowerment of the Zimbabwean Government pursuant to which the Group agreed that indigenous Zimbabweans would acquire an effective 51% ownership interest in the Zimbabwean company owning the Blanket Mine (also referred to herein as “Blanket” or “Blanket Mine” as the context requires) for a paid transactional value of US$30.09 million. Pursuant to the above, members of the Group entered into agreements with each indigenous shareholder to transfer 51% of the Group’s ownership interest in Blanket Mine whereby it:
| • | sold a 16% interest to the National Indigenisation and Economic Empowerment Fund (“NIEEF”) for $11.74 million; |
|---|---|
| • | sold a 15% interest to Fremiro Investments (Private) Limited (“Fremiro”), which is owned by indigenous Zimbabweans, for $11.01 million; |
| --- | --- |
| • | sold a 10% interest to Blanket Employee Trust Services (Private) Limited (“BETS”) for the benefit of present and future managers and employees for $7.34 million. The shares in BETS are held by the Blanket Mine Employee Trust (“Employee Trust”) with Blanket Mine’s employees holding participation units in the Employee Trust; and |
| --- | --- |
| • | donated a 10% ownership interest to the Gwanda Community Share Ownership Trust (“Community Trust”). In addition, Blanket Mine paid a non-refundable donation of $1 million to the Community Trust. |
| --- | --- |
The Group facilitated the vendor funding of these transactions which is repaid by way of dividends from Blanket Mine. 80% of dividends declared by Blanket Mine are used to repay such loans and the remaining 20% unconditionally accrues to the respective indigenous shareholders. Following a modification to the interest rate on June 23, 2017, outstanding balances on these facilitation loans attract interest at a rate of the lower of a fixed 7.25% per annum payable quarterly or 80% of the Blanket Mine dividend in the quarter. The timing of the loan repayments depends on the future financial performance of Blanket Mine and the extent of future dividends declared by Blanket Mine. The Group related facilitation loans were transferred as dividends in specie intra-group and now the loans and most of the interest thereon is payable to the Company.
Accounting treatment
The directors of Caledonia Holdings Zimbabwe (Private) Limited (“CHZ”), a wholly-owned subsidiary of the Company, performed an assessment using the requirements of IFRS 10: Consolidated Financial Statements (IFRS 10). It was concluded that CHZ should consolidate Blanket Mine after the indigenisation. The subscription agreements with the indigenous shareholders have been accounted for accordingly as a transaction with non-controlling interests and as a share-based payment transaction.
33
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 5 | Blanket Zimbabwe Indigenisation Transaction (continued) |
|---|
Accounting treatment (continued)
The subscription agreements, concluded on February 20, 2012, were accounted for as follows:
| • | Non-controlling interests (“NCI”) were recognised on the portion of shareholding upon which dividends declared by Blanket Mine will accrue unconditionally to equity holders as follows: |
|---|---|
| (a) | 20% of the 16% shareholding of NIEEF; |
| --- | --- |
| (b) | 20.0% of the 15.0% shareholding of Fremiro; and |
| --- | --- |
| (c) | 100% of the 10% shareholding of the Community Trust. |
| --- | --- |
| • | This effectively means that NCI was initially recognised at 16.2% of the net assets of Blanket Mine, until the completion of the transaction with Fremiro, whereby the NCI reduced to 13.2% (see below). |
| --- | --- |
| • | The remaining 80% of the shareholding of NIEEF and Fremiro was recognised as NCI to the extent that their attributable share of the net asset value of Blanket Mine exceeds the balance on the facilitation loans, including interest. |
| --- | --- |
| • | The transaction with BETS is accounted for in accordance with IAS 19 Employee Benefits (profit sharing arrangement) as the ownership of the shares does not ultimately pass to the employees. The employees are entitled to participate in 20% of the dividends accruing to the 10% shareholding in Blanket Mine if they are employed at the date of such distribution. To the extent that 80% of the attributable dividends exceeds the balance on the BETS facilitation loan, they will accrue to the employees at the date of such declaration. |
| --- | --- |
| • | BETS is an entity effectively controlled and consolidated by Blanket Mine. Accordingly, the shares held by BETS are effectively treated as treasury shares in Blanket Mine and no NCI is recognised. |
| --- | --- |
Fremiro purchase agreement
On November 5, 2018 the Company and Fremiro entered into a sale agreement for Caledonia to purchase Fremiro’s 15% shareholding in Blanket Mine. On January 20, 2020 all substantive conditions to the transaction were satisfied. The Company issued 727,266 shares to Fremiro for the cancellation of their facilitation loan and purchase of Fremiro’s 15% shareholding in Blanket Mine. The transaction was accounted for as a repurchase of a previously vested equity instrument. As a result, the Fremiro share of the NCI of $3,600 was derecognised, shares were issued at fair value, the share-based payment reserve was reduced by $2,247 and the Company’s shareholding in Blanket Mine increased to 64% on the effective date.
Blanket Mine’s indigenisation shareholding percentages and facilitation loan balances
| USD | Shareholding | Effective interest & NCI recognised | NCI subject to facilitation loan | Balance of facilitation<br><br> <br>loan^3^ | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| **** | **** | **** | **** | **** | **** | **** | **** | **** | December 31, 2024 | December 31, 2023 | |||
| NIEEF | 16 | % | 3.2 | % | 12.8 | % | **** | 6,723 | 8,489 | ||||
| Community Trust | 10 | % | 10.0 | % | – | % | – | – | |||||
| BETS^1, 2^ | 10 | % | – | % | – | % | **** | 3,535 | 4,908 | ||||
| 36 | % | 13.2 | % | 12.8 | % | **** | 10,258 | 13,397 |
^1^ The shares held by BETS are effectively treated as treasury shares.
^2^ Accounted for under IAS19 Employee Benefits.
^3^ Facilitation loans are accounted for as equity instruments and are accordingly not recognised as loans receivable.
34
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 5 | Blanket Zimbabwe Indigenisation Transaction (continued) |
|---|
Accounting treatment (continued)
The balance on the facilitation loans is reconciled as follows:
| 2024 | 2023 | |||||
|---|---|---|---|---|---|---|
| Balance at January 1 | **** | 13,397 | 15,026 | |||
| Interest incurred | **** | 637 | 259 | |||
| Dividends used to repay loan | **** | (3,776 | ) | (1,888 | ) | |
| Balance at December 31 | **** | 10,258 | 13,397 | |||
| 6 | Capital management | |||||
| --- | --- |
When managing capital, the Group’s objectives are to safeguard its ability to continue as a going concern in order to pursue the mining operations and exploration potential of the mineral properties. The Group’s capital includes shareholders’ equity, comprising issued share capital (refer to note 25), reserves (refer to note 26), accumulated other comprehensive income, retained loss, bank financing (refer to note 23) and non-controlling interests (refer to note 28).
| 2024 | ^*^2023 | |||
|---|---|---|---|---|
| Total equity | **** | 234,464 | 224,200 |
* Restated, refer to note 41.
The Group’s primary objective regarding its capital management is to ensure that it has sufficient cash resources to maintain its on-going operations, provide returns for shareholders, accommodate any rehabilitation provisions and pursue growth opportunities that Management has assessed as adequate. It assesses its short term needs and funds these by available cash, overdrafts and short to medium term loans. Capital requirements for future project are evaluated on a case-by-case basis. As at December 31, 2024, there has been no change with respect to the overall capital risk management strategy.
| 7 | Revenue | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Bilboes^*^ | Total | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2023 | 2022 | 2024 | 2023 | 2024 | 2023 | 2022 | |||||||||
| Revenue | 179,368 | 140,615 | 142,082 | **** | 3,650 | 5,699 | **** | 183,018 | 146,314 | 142,082 | |||||
| Revenue - silver sales | 132 | 114 | 116 | – | 4 | **** | 132 | 118 | 116 | ||||||
| Revenue - gold sales | 179,236 | 140,501 | 141,966 | **** | 3,650 | 5,695 | **** | 182,886 | 146,196 | 141,966 | |||||
| Total ounces gold sold | 76,271 | 73,482 | 80,094 | **** | 1,646 | 3,050 | **** | 77,917 | 76,532 | 80,094 | |||||
| Net work in progress (oz) | 385 | 1,934 | 681 | – | – | **** | 385 | 1,934 | 681 | ||||||
| Gold produced (oz) | 76,656 | 75,416 | 80,775 | **** | 1,646 | 3,050 | **** | 78,302 | 78,466 | 80,775 | |||||
| Realised gold price (/oz) | 2,350 | 1,912 | 1,772 | **** | 2,218 | 1,867 | **** | 2,347 | 1,910 | 1,772 |
All values are in US Dollars.
| * | Bilboes Holdings was acquired on January 6, 2023. No production for 2022. |
|---|---|
| ^&^ | Bilboes Holdings does not have this information for 2024 as the current production method does not have all these statistics. |
35
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 8 | Production costs | |||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Blanket Mine | **** | 77,358 | 69,591 | 62,998 | ||
| Salaries and wages | **** | 30,042 | 25,042 | 23,037 | ||
| Consumable materials | **** | 23,653 | 24,087 | 23,601 | ||
| Consumable materials – COVID-19 | – | – | 311 | |||
| Electricity costs | **** | 14,870 | 13,496 | 9,634 | ||
| Safety | **** | 1,112 | 1,155 | 998 | ||
| Share-based expense (note 12) | **** | 412 | 637 | 853 | ||
| On mine administration | **** | 4,648 | 2,783 | 2,736 | ||
| Security | **** | 1,528 | 1,020 | 1,093 | ||
| Solar operations and maintenance services | **** | 595 | 647 | – | ||
| Write down of inventory (note 20) | **** | 312 | 283 | 563 | ||
| Pre-feasibility exploration costs | **** | 186 | 441 | 172 | ||
| Bilboes | **** | 3,386 | 13,118 | – | ||
| Salaries and wages | **** | 1,276 | 2,796 | – | ||
| Consumable materials | **** | 784 | 8,402 | – | ||
| Electricity costs | **** | 451 | 553 | – | ||
| Share-based expense (note 12) | **** | 22 | 23 | – | ||
| On mine administration | **** | 853 | 1,344 | – | ||
| **** | 80,744 | 82,709 | 62,998 |
36
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 9 | Net foreign exchange loss |
|---|
The 2024 Monetary Policy Statement issued by the Governor of the Reserve Bank of Zimbabwe (“RBZ”) on April 5, 2024 replaced the RTGS$ with a new currency that co-circulates with other foreign currencies in the Zimbabwean economy, named Zimbabwe Gold (“ZiG”). The ZiG was introduced at a rate of ZiG13.56:USD1 on April 5, 2024 and all RTGS$ balances were converted from RTGS$ to ZiG using an exchange rate of ZiG1:RTGS$2,499.
The official exchange rate of the ZiG weakened from ZiG13.99:USD1 to ZiG24.88:USD1 at September 30, 2024 and ZiG25.80:USD1 at December 31, 2024 resulting in significant foreign exchange losses on the ZiG-denominated VAT and Bullion sales receivables as indicated in the table below in the first nine months of 2024.
The retention threshold on gold receipts in 2024 was 75% in US Dollars and the balance in ZiG. The retention threshold was revised downwards to 70% in US Dollars effective February 6, 2025. The table below illustrates the effect the weakening of the ZiG, RTGS$ and other foreign currencies had on the consolidated statement of profit or loss.
| 2024 | 2023 | 2022 | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ZiG | RTGS | Other | Total | RTGS | Other | Total | RTGS | Other | Total | |||||||||||||||||
| Unrealised foreign exchange (losses) gains | **** | (1,706 | ) | **** | 23 | **** | (1,683 | ) | #(614 | ) | 609 | ^#^(5 | ) | #2,645 | 3 | ^#^2,648 | ||||||||||
| Taxation and VAT | **** | (1,363 | ) | – | **** | (1,363 | ) | #(554 | ) | – | ^#^(554 | ) | #3,147 | – | ^#^3,147 | |||||||||||
| Other | **** | (343 | ) | **** | 23 | **** | (320 | ) | ) | 609 | 549 | ) | 3 | (499 | ) | |||||||||||
| Realised foreign exchange (losses) gains | **** | (1,217 | ) | ) | **** | (30 | ) | **** | (8,039 | ) | ) | (27 | ) | (6,767 | ) | ) | 7 | (8,325 | ) | |||||||
| Bullion sales receivable | **** | (373 | ) | ) | – | **** | (1,810 | ) | ) | – | (2,554 | ) | ) | – | (405 | ) | ||||||||||
| Cash and cash equivalents | **** | (152 | ) | ) | **** | (30 | ) | **** | (3,188 | ) | ) | 27 | (1,482 | ) | ) | 7 | (1,905 | ) | ||||||||
| Taxation, VAT and other receivables | **** | (1,040 | ) | ) | – | **** | (4,530 | ) | ) | (54 | ) | (3,857 | ) | ) | – | (8,582 | ) | |||||||||
| Trade and other payables | **** | 348 | – | **** | 1,489 | – | 1,126 | – | 2,567 | |||||||||||||||||
| Net foreign exchange (loss) gain | **** | (2,923 | ) | ) | **** | (7 | ) | **** | (9,722 | ) | #(7,354 | ) | 582 | ^#^(6,772 | ) | #(5,687 | ) | 10 | ^#^(5,677 | ) |
All values are in US Dollars.
* Losses incurred due to cash held by way of Letter of credit ("LC") denominated in RTGS$. Delays in conversion of the LC resulted in a devaluation of the asset when the RTGS$ devaluated.
^#^ Restated, refer to note 41.
Refer to note 34.3.1 for the sensitivity analysis on the currency risk.
37
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 10 | Administrative expenses | |||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Investor relations | **** | 743 | 576 | 663 | ||
| Audit fee | **** | 566 | 396 | 294 | ||
| Advisory services fees | **** | 2,547 | 4,406 | 1,459 | ||
| Listing fees | **** | 630 | 749 | 512 | ||
| Directors fees – Company | **** | 675 | 571 | 569 | ||
| Directors fees – Blanket | **** | 83 | 61 | 56 | ||
| Employee costs | **** | 8,029 | 6,734 | 5,855 | ||
| Employee costs – settlements group | **** | 115 | 1,784 | – | ||
| Other office administration cost | **** | 334 | 445 | 468 | ||
| Information technology and communication cost – Group related | **** | 249 | 241 | 391 | ||
| Management liability insurance | **** | 907 | 897 | 985 | ||
| Travel costs | **** | 780 | 569 | 689 | ||
| **** | 15,658 | 17,429 | 11,941 | |||
| 11 | Derivative financial instruments | |||||
| --- | --- |
The fair value of derivative financial instruments (Gold loan) not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where available and were classified as level 2 in the fair value hierarchy. The fair value of derivative financial instruments traded in an active market were classified as level 1 in the fair value hierarchy. The company did not apply hedge accounting to the derivative financial instruments and all fair value losses were recorded in the consolidated statements of profit or loss and other comprehensive income. Transaction costs are recognised in profit or loss as incurred.
| Derivative financial instrument expenses | **** | 2024 | 2023 | 2022 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Put options | 11.1.1 | **** | 831 | 1,097 | 38 | |||||
| Gold purchase options | – | 22 | – | |||||||
| Gold loan | – | – | (228 | ) | ||||||
| Call options (December 13, 2021) | – | – | (240 | ) | ||||||
| Cap and collar options and Call options | – | – | 832 | |||||||
| Call options transaction costs (March 9, 2022) | – | – | 796 | |||||||
| Gold exchange-traded fund ("Gold ETF") | – | – | – | |||||||
| Net derivative financial instrument expense | **** | **** | 831 | 1,119 | 1,198 | |||||
| Cash flows arising from investing activities | **** | 2024 | 2023 | 2022 | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Acquisition of Put options | 11.1.1 | **** | (743 | ) | (946 | ) | (478 | ) | ||
| Proceeds from derivative financial liabilities – Gold purchase options | – | 178 | – | |||||||
| Call options (March 9, 2022) acquisition | – | – | (176 | ) | ||||||
| Call options (March 9, 2022) proceeds | – | – | 416 | |||||||
| **** | **** | (743 | ) | (768 | ) | (238 | ) |
38
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 11 | Derivative financial instruments (continued) | ||||||
|---|---|---|---|---|---|---|---|
| Cash flows arising from financing activities | 2024 | 2023 | 2022 | ||||
| --- | --- | --- | --- | --- | --- | --- | --- |
| Gold loan repayment | – | – | (3,698 | ) | |||
| – | – | (3,698 | ) | ||||
| 11.1 | Derivative financial assets | ||||||
| --- | --- | ||||||
| **** | 2024 | 2023 | |||||
| --- | --- | --- | --- | --- | --- | ||
| Put options | 11.1.1 | – | 88 | ||||
| – | 88 | ||||||
| 11.1.1 | Put options | ||||||
| --- | --- |
From December 2022 to December 31, 2024 the Company had the following put options to hedge gold price risk:
| Purchase date | Ounces hedged | Strike price | Period of hedge |
|---|---|---|---|
| December 22, 2022 | 16,672 oz | $1,750 | December 2022 to May 2023 |
| May 22, 2023 | 28,000 oz | $1,900 | June to December 2023 |
| December 19, 2023 | 12,000 oz | $1,950 | January to March 2024 |
| March 7, 2024 | 12,000 oz | $2,050 | April to June 2024 |
| April 10, 2024 | 12,000 oz | $2,100 | July to September 2024 |
| October 4, 2024 | 12,000 oz | $2,600 | October to December 2024 |
On September 29, 2023 and October 6, 2023 the Company purchased two gold purchase options of 1,000 ounces each at a market price of $1,875 and $1,841 per ounce.
During February, 2025 the Company purchased Asian put options to hedge 43,439 ounces of gold, spread according to our planned production profile, over a period of eleven months from February to December 2025 at a strike price of $2,600.
The put options were entered into to protect the Company against gold prices lower than the strike price over the period hedged. The options are “out-of-the-money" put options which lock in a minimum price over the number of ounces that are subject to the hedge for an initial option price. These arrangements carry no further financial obligations, such as margin calls.
All put options were classified as level 1 in the fair value hierarchy.
| 12 | Share-based payments |
|---|---|
| 12.1 | Cash-settled share-based payments |
| --- | --- |
| 12.1.1 | Restricted Share Units and Performance Units |
| --- | --- |
Certain management and employees within the Group are granted Restricted Share Units (“RSUs”) and Performance Units (”PUs”) pursuant to provisions of the 2015 Omnibus Equity Incentive Compensation Plan (“OEICP”). All PUs were granted and approved at the discretion of the Compensation Committee of the Board of Directors.
39
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 12 | Share-based payments (continued) |
|---|---|
| 12.1 | Cash-settled share-based payments (continued) |
| --- | --- |
| 12.1.1 | Restricted Share Units and Performance Units (continued) |
| --- | --- |
PUs have a performance condition, determined on their grant date, based on metrics, such as, gold production, average normalised controllable cost per ounce of gold, resource development at Blanket Mine, financing and construction of Bilboes sulphide project and a performance period of one to three years. The number of PUs that vest will be the relevant portion of the PUs granted multiplied by the performance multiplier, which will reflect the actual performance in terms of the performance conditions compared to expectations on the date of the award.
PUs have rights to dividends only after they have vested.
PUs allow for settlement of the vesting date value in cash or, subject to conditions, shares issuable at fair market value or a combination of both at the discretion of the unitholder.
The fair value of the PUs at the reporting date was based on the Black Scholes option valuation model. At the reporting date it was assumed that there is a 28% - 110% probability that the performance conditions will be met and therefore a 28% - 110% (2023: 93-100%) average performance multiplier was used in calculating the estimated liability.
The liability as at December 31, 2024 amounted to $1,045 (December 31, 2023: $1,294). Included in the liability as at December 31, 2024 is an amount of $324 (2023: $660 2022: $853) that was expensed and classified as production costs; refer to note 8.
The cash-settled share-based expense for PUs for the period amounted to $201 (2023: $463, 2022: $609). During the period PUs to the value of $83 were settled in share capital (net of employee tax) (2023: $351, 2022: $804) with the employee tax portion recognised in profit or loss.
The following assumptions were used in estimating the fair value of the cash-settled share-based payment liability on:
| December 31, 2023 | |||||
|---|---|---|---|---|---|
| PUs | |||||
| Risk free rate | 4.55 | % | 3.88 | % | |
| Fair value () | 9.41 | 12.20 | |||
| Share price () | 9.41 | 12.20 | |||
| Performance multiplier percentage | 28% - 110 | % | 93-100 | % | |
| Volatility | 0.77 | 0.90 | |||
| January exercise price – 2020 awards () | – | 13.10 | |||
| January exercise price – 2021 awards () | 11.89 | 13.10 | |||
| January exercise price – 2022 awards () | 11.89 | 13.10 | |||
| April exercise price – 2023 awards () | 10.87 | – |
All values are in US Dollars.
40
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 12 | Share-based payments (continued) | |||||
|---|---|---|---|---|---|---|
| 12.1 | Cash-settled share-based payments (continued) | |||||
| --- | --- | |||||
| 12.1.1 | Restricted Share Units and Performance Units (continued) | |||||
| --- | --- | |||||
| December 31, 2024 | December 31, 2023 | |||||
| --- | --- | --- | --- | --- | --- | --- |
| Share units granted: | PUs | PUs | ||||
| Grant - January 11, 2021 | **** | 35,341 | 56,244 | |||
| Grant - May 14, 2021 | **** | 482 | 964 | |||
| Grant - June 1, 2021 | **** | 375 | 1,310 | |||
| Grant - June 14, 2021 | **** | 199 | 398 | |||
| Grant - September 6, 2021 | **** | 229 | 458 | |||
| Grant - September 20, 2021 | **** | 230 | 460 | |||
| Grant - October 1, 2021 | **** | 508 | 1,016 | |||
| Grant - October 11, 2021 | **** | 225 | 450 | |||
| Grant - November 12, 2021 | **** | 923 | 1,846 | |||
| Grant - December 1, 2021 | **** | 225 | 900 | |||
| Grant - January 11, 2022 | **** | 41,381 | 75,198 | |||
| Grant - January 12, 2022 | **** | 556 | 825 | |||
| Grant - May 13, 2022 | **** | 1,894 | 2,040 | |||
| Grant - June 1, 2022 | – | 1,297 | ||||
| Grant - July 1, 2022 | **** | 1,899 | 2,375 | |||
| Grant - October 1, 2022 | **** | 1,800 | 2,024 | |||
| Grant - April 7, 2023 | **** | 73,462 | 79,521 | |||
| Grant - May 15, 2023 | – | 581 | ||||
| Grant - June 1, 2023 | **** | 617 | 617 | |||
| Grant - June 7, 2023 | **** | 572 | 572 | |||
| Grant - August 10, 2023 | **** | 5,514 | 5,514 | |||
| Grant - September 1, 2023 | **** | 1,617 | 1,617 | |||
| Grant - October 3, 2023 | **** | 14,258 | 14,258 | |||
| Grant - April 8, 2024 | **** | 169,141 | – | |||
| Grant - June 10, 2024 | **** | 1,406 | – | |||
| Grant - June 17, 2024 | **** | 1,155 | – | |||
| Grant - July 1, 2024 | **** | 1,461 | – | |||
| Grant - August 12, 2024 | **** | 1,554 | – | |||
| RSU dividends reinvested | – | – | ||||
| Settlements/ terminations | **** | (110,235 | ) | (68,171 | ) | |
| Total awards outstanding | **** | 246,789 | 182,314 |
41
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 12 | Share-based payments (continued) |
|---|---|
| 12.2 | Restricted Share Units and Performance Units |
| --- | --- |
| 12.2.1 | EPUs |
| --- | --- |
PUs which are classified as equity-settled (i.e. there is no option to vest in cash) (“EPUs”) have a performance condition, determined on their grant date, based on gold production, average normalised controllable cost per ounce of gold, resource development at Blanket Mine, financing and construction of Bilboes sulphide project and a performance period of three years. The number of EPUs that vest will be the relevant portion of the EPUs granted multiplied by the performance multiplier, which will reflect the actual performance in terms of the performance conditions compared to expectations on the date of the award.
EPUs have rights to dividends only after they have vested.
The shares issued are subject to a minimum holding period of until at least the first anniversary of the EPUs vesting date.
The fair value of the EPUs at the reporting date was based on the Black Scholes option valuation model less the fair value of the expected dividends during the vesting period multiplied by the performance percentage. At the reporting date it was assumed that there is a 42% - 105% probability that the performance conditions will be met and therefore a 42% - 105% (2023: 100%) performance multiplier was used in calculating the expense. The equity-settled share-based expense for EPUs as at December 31, 2024 amounted to $652 (2023: $640, 2022: $417). An amount of $110 (2023: $Nil; 2022: $Nil) was expensed and classified as production costs; refer to note 8.
The following assumptions were used in estimating the fair value of the equity-settled share-based payment on:
| Grant date | April 7, 2023 | April 8, 2024 | May 13, 2024 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Number of units – remaining at reporting date | 113,693 | 80,773 | 125,433 | 13,140 | |||||||
| Share price () - grant date | 11.50 | 16.91 | 10.91 | 10.01 | |||||||
| Fair value () - grant date | 10.15 | 15.33 | 9.53 | 10.02 | |||||||
| Performance multiplier percentage at grant date | 100 | % | 100 | % | 100 | % | 100 | % | |||
| Performance multiplier percentage at December 31, 2024 | 105 | % | 42 | % | 97 | % | 97 | % |
All values are in US Dollars.
| 12.2.2 | Equity Restricted Share Units |
|---|
RSUs which are classified as equity-settled (i.e. there is no option to vest in cash) (“ERSUs”) vest on the date as specified in the ERSUs agreement given that the service conditions of the relevant employees have been fulfilled. The value of the vested ERSUs is the number of ERSUs vested multiplied by the fair market value of the Company’s shares, as specified by the OEICP, on the date of settlement.
ERSU holders are entitled to receive dividends over the vesting period. Such dividends will be reinvested in additional ERSUs at the then applicable share price. The fair value of the RSUs at the grant date was based on the Black Scholes option valuation model less the fair value of the expected dividends during the vesting period multiplied by the performance multiplier expectation.
42
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 12 | Share-based payments (continued) |
|---|---|
| 12.2 | Restricted Share Units and Performance Units (continued) |
| --- | --- |
| 12.2.2 | Equity Restricted Share Units (continued) |
| --- | --- |
The following assumptions were used in estimating the fair value of the equity-settled share-based payment that are in issue on:
| Grant date | ||
|---|---|---|
| Vesting date | ||
| Number of units granted | 26,404 | |
| Share price () - grant date | 10.01 | |
| Fair value () - grant date | 10.02 | |
| Performance multiplier percentage at grant date | 100 | % |
All values are in US Dollars.
The equity-settled share-based expense for ERSUs as at December 31, 2024 amounted to $402 (2023: $Nil; 2022: $Nil). During the year ERSUs to the value of $220 were settled in share capital (net of employee tax) with the employee tax portion recognised in profit or loss.
| 12.2.3 | Share option programs |
|---|
The maximum term of the options under the OEICP is ten years. Equity-settled share-based payments under the OEICP will be settled by physical delivery of shares. Under the OEICP the aggregate number of shares that may be issued pursuant to the grant of options, or under any other share compensation arrangements of the Company, will not exceed 10% of the aggregate issued and outstanding shares issued of the Company. At December 31, 2024 the Company had 10,000 (2023: 20,000) options outstanding granted to the employees of 3PPB Plc (providing US investor relations services to Caledonia), P Chidley and P Durham in equal units each.
The fair value of share-based payments noted above was estimated using the Black-Scholes valuation model as the fair value of the services could not be estimated reliably. Service and non-market performance conditions attached to the arrangements were not taken into account in measuring fair value
The equity-settled share-based expense relating to grants amounted to $Nil (2023: $Nil, 2022: $67). Options to the value of $37 were exercised during the year.
43
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 13 | Other expenses | |||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Intermediated Money Transaction Tax^*^ | **** | 1,387 | 1,266 | 1,378 | ||
| Community and social responsibility cost | **** | 1,326 | 1,504 | 898 | ||
| Impairment of property, plant and equipment (note 18) | **** | 1,711 | 877 | 8,209 | ||
| Impairment of exploration and evaluation assets | – | – | 467 | |||
| Impairment Solar - VAT and duty receivables | – | 720 | – | |||
| Impairment Solar - replacement part (note 24) | **** | 385 | – | – | ||
| Bilboes pre-acquisition cost | – | – | 830 | |||
| Retirement benefits ^@^ | **** | 2,099 | – | – | ||
| Loss on sale of property, plant and equipment | **** | 32 | – | – | ||
| **** | 6,940 | 4,367 | 11,782 | |||
| * | Intermediated Money Transfer Tax ("IMTT”) is tax chargeable in Zimbabwe on transfer of physical money, electronically or by any other means, and charged at 2% per transaction in Zimbabwe. | |||||
| --- | --- | |||||
| ^@^ | Caledonia awarded discretionary payments to selected employees at Blanket Mine and Bilboes over 60 years of age as retirement amounting to $2.1 million (excluding Share-based payment awards granted that remained unaffected). Group related retirements were classified as administrative expenses. | |||||
| 14 | Other income | |||||
| --- | --- | |||||
| 2024 | 2023 | 2022 | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Reversal of interest and penalties | **** | 656 | – | – | ||
| Eersteling sale receipts | **** | 200 | – | – | ||
| Other | **** | 234 | 263 | 60 | ||
| **** | 1,090 | 263 | 60 | |||
| 15 | Finance income and finance cost | |||||
| --- | --- | |||||
| 2024 | 2023 | 2022 | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Finance income received - Bank | **** | 26 | 39 | 17 | ||
| Unwinding of rehabilitation provision - Blanket (note 29) | **** | 197 | 109 | 132 | ||
| Finance cost - Leases (note 19) | **** | 10 | 22 | 31 | ||
| Zimbabwe Electricity Supply Authority interest | – | 68 | – | |||
| Finance cost – Overdrafts | **** | 1,811 | 1,657 | 192 | ||
| Finance cost - Motapa loan notes payable | – | 619 | 302 | |||
| Finance cost - Solar loan notes payable (note 31) | **** | 846 | 549 | – | ||
| Finance cost – Loans and borrowings (note 30) | **** | 293 | – | – | ||
| Total finance cost | **** | 3,157 | 3,024 | 657 |
44
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 15 | Finance income and finance cost (continued) | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Finance cost paid | 2024 | 2023 | 2022 | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Finance cost | **** | 3,157 | 3,024 | 657 | |||||
| Non cash - loan note interest (note 31) | **** | (86 | ) | (363 | ) | (302 | ) | ||
| Non cash - Unwinding of rehabilitation provision (note 29) | **** | (197 | ) | (109 | ) | (132 | ) | ||
| Non cash - Trade payables | – | (68 | ) | – | |||||
| Non cash - Finance cost on leases (note 19) | **** | (10 | ) | (22 | ) | (31 | ) | ||
| **** | 2,864 | 2,462 | 192 | ||||||
| 16 | Tax expense | ||||||||
| --- | --- | ||||||||
| Tax recognised in profit or loss | 2024 | 2023 | 2022 | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | ||
| Current tax | **** | 15,310 | 7,642 | 9,932 | |||||
| Income tax - current year | **** | 14,382 | 4,821 | 8,707 | |||||
| Income tax - change in tax estimate | – | 1,944 | (46 | ) | |||||
| Withholding tax - current year | **** | 928 | 867 | 1,271 | |||||
| Acquisition of Bilboes Gold tax liability | – | 10 | – | ||||||
| Deferred tax expense | **** | 2,179 | 5,168 | *4,427 | |||||
| Origination and reversal of temporary differences | **** | 2,179 | 5,168 | *4,427 | |||||
| Tax expense – recognised in profit or loss | **** | 17,489 | 12,810 | *14,359 | |||||
| Tax recognised in other comprehensive income | |||||||||
| Income tax - current year | – | – | – | ||||||
| Tax expense | **** | 17,489 | 12,810 | *14,359 |
^*^ Restated, refer to note 41.
| Unrecognised deferred tax assets | 2024 | 2023 | 2022 | |||
|---|---|---|---|---|---|---|
| Bilboes Holdings (Private) Limited | **** | 4,428 | *4,447 | — | ||
| Caledonia Holdings Zimbabwe (Private) Limited – mining | **** | 2,942 | 2,942 | — | ||
| Caledonia Holdings Zimbabwe (Private) Limited - services | **** | 3,438 | 1,805 | 1,805 | ||
| Blanket Employee Trust Services (Private) Limited | **** | 330 | 260 | 227 | ||
| Caledonia Mining Services (Private) Limited | — | — | 69 | |||
| Greenstone Management Services (Pty) Ltd (UK)^@^ | **** | 359 | 144 | 176 | ||
| Tax losses carried forward | **** | 11,497 | 9,598 | 2,277 |
Taxable losses do not expire for the entities incurring taxable losses within the Group, unless the entities cease trading. Tax losses carried forward relate to Caledonia Holdings Zimbabwe (Private) Limited and Bilboes Holdings (Private) Limited. Deferred tax assets have not been recognised in these entities as future taxable income is not deemed probable to utilise these losses against.
^*^ Assessed losses of Bilboes of $3,763 was acquired during 2023.
^@^ Assessed losses of Greenstone Management Services (Pty) Ltd (UK) are not carried over and reset to zero each year.
45
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 16 | Tax expense (continued) | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Tax paid | 2024 | 2023 | 2022 | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Net income tax receivable/ (payable) at January 1 | **** | 1,110 | (1,284 | ) | (1,461 | ) | |||
| Current tax expense | **** | (15,310 | ) | (7,642 | ) | (9,932 | ) | ||
| Acquisition of Bilboes Gold tax liability | – | (10 | ) | – | |||||
| VAT allocated against income tax | **** | 1,112 | – | – | |||||
| Foreign currency movement | **** | (160 | ) | 840 | 3,243 | ||||
| Tax paid | **** | 10,645 | 9,206 | 6,866 | |||||
| Net income tax (payable)/ receivable at December 31 | **** | (2,603 | ) | 1,110 | (1,284 | ) | |||
| Reconciliation of tax rate | ^(3)^2023 | ^(3)^2022 | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| Profit (loss) for the year | 23,054 | (4,840 | ) | 15,189 | |||||
| Total tax expense | 17,489 | 12,810 | 14,359 | ||||||
| Profit before tax | 40,543 | 7,970 | 29,548 | ||||||
| Income tax at Company's domestic tax rate (1) | – | – | – | ||||||
| Tax rate differences in foreign jurisdictions (2) | 13,626 | 5,808 | 12,600 | ||||||
| Effect of income tax calculated in RTGS as required by PN26 | – | – | 713 | ||||||
| Management fee – withholding tax on deemed dividend portion | 313 | 398 | 247 | ||||||
| Management fee – non-deductible deemed dividend | 615 | 675 | 735 | ||||||
| Management fee – withholding tax - current year | 139 | 169 | 174 | ||||||
| Withholding tax on intercompany dividends | 476 | 300 | 850 | ||||||
| Non-deductible expenditure | |||||||||
| - Donations | 289 | 318 | 269 | ||||||
| - Other non-deductible expenditure and income | (257 | ) | 37 | 1,613 | |||||
| Unrealised foreign exchange gains (loss) | 245 | (642 | ) | (3,733 | ) | ||||
| Change in tax estimates | |||||||||
| - Zimbabwean income tax | – | 1,891 | – | ||||||
| - South African income tax | – | 53 | (46 | ) | |||||
| Change in unrecognised tax losses | 2,043 | 3,803 | 937 | ||||||
| Tax expense - recognised in profit or loss | 17,489 | 12,810 | 14,359 |
All values are in US Dollars.
| ^(1)^ | The tax rate in Jersey, Channel Islands is 0% (2023: 0%, 2022:0%). |
|---|---|
| ^(2)^ | The effective tax rate of 43.14% (2023: 160.73%, 2022: 48.60%) exceeds the statutory tax rates of subsidiaries of the Company, as certain expenditures are incurred by the Company that are not tax-deductible against taxable income in Zimbabwe, South Africa, United Kingdom and Jersey, Channel Islands. |
| --- | --- |
| ^(3)^ | Restated, refer to note 41. |
| --- | --- |
46
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 16 | Tax expense (continued) |
|---|
Recognised deferred tax assets and liabilities
| Assets | Liabilities | Net | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | ^(2)^2023 | 2024 | ^(2)^2023 | 2024 | ^(2)^2023 | |||||||||||
| Property, plant and equipment | – | – | **** | (49,037 | ) | (46,570 | ) | **** | (49,037 | ) | (46,570 | ) | ||||
| Exploration and evaluation assets | – | – | **** | (159 | ) | (146 | ) | **** | (159 | ) | (146 | ) | ||||
| Inventories – obsolete stock | **** | 418 | 365 | – | – | **** | 418 | 365 | ||||||||
| Prepayments | – | – | **** | (9 | ) | (9 | ) | **** | (9 | ) | (9 | ) | ||||
| Trade and other payables | **** | 296 | 91 | – | – | **** | 296 | 91 | ||||||||
| Provisions | **** | 295 | 233 | – | – | **** | 295 | 233 | ||||||||
| Other | **** | 42 | 66 | – | – | **** | 42 | 66 | ||||||||
| Tax assets/ (liabilities) | **** | 1,051 | 755 | **** | (49,205 | ) | (46,725 | ) | **** | (48,154 | ) | (45,970 | ) | |||
| (1) | (1) | |||||||||||||||
| (1) | The net deferred tax liability consists of a deferred tax asset of $264 (2023: $153) from the South African operation and a net deferred tax liability of $48,418 (2023: $46,123) due to the Zimbabwean operation. The amounts are in different tax jurisdictions and cannot be offset. The amounts are presented as part of non-current assets and non-current liabilities in the statements of financial position. The deferred tax asset recognised is supported by evidence of probable future taxable income. | |||||||||||||||
| --- | --- | |||||||||||||||
| (2) | Restated, refer to note 41. |
Movement in recognised deferred tax assets and liabilities
| Balance January 1, 2024 | Recognised in profit or loss | Foreign exchange movement | Balance December 31, 2024 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Property, plant and equipment | **** | (46,570 | ) | **** | (2,468 | ) | **** | 1 | **** | (49,037 | ) | |
| Exploration and evaluation assets | **** | (146 | ) | **** | (13 | ) | – | **** | (159 | ) | ||
| Inventories – obsolete stock | **** | 365 | **** | 53 | – | **** | 418 | |||||
| Prepayments | **** | (9 | ) | – | – | **** | (9 | ) | ||||
| Trade and other payables | **** | 91 | **** | 211 | **** | (6 | ) | **** | 296 | |||
| Provisions | **** | 233 | **** | 62 | – | **** | 295 | |||||
| Other | **** | 66 | **** | (24 | ) | – | **** | 42 | ||||
| Tax (liabilities)/ assets | **** | (45,970 | ) | **** | (2,179 | ) | **** | (5 | ) | **** | (48,154 | ) |
| ^*^Balance January 1, 2023 | ^*^Recognised in profit or loss | ^*^Foreign exchange movement | ^*^Balance December 31, 2023 | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Property, plant and equipment | (41,810 | ) | (5,332 | ) | 572 | (46,570 | ) | |||||
| Exploration and evaluation assets | (2 | ) | – | (144 | ) | (146 | ) | |||||
| Inventories - obsolete stock | 64 | 49 | 252 | 365 | ||||||||
| Prepayments | (5 | ) | (5 | ) | 1 | (9 | ) | |||||
| Unrealised foreign exchange | 733 | – | (733 | ) | – | |||||||
| Trade and other payables | 712 | (44 | ) | (577 | ) | 91 | ||||||
| Provisions | (383 | ) | 98 | 518 | 233 | |||||||
| Other | – | 66 | – | 66 | ||||||||
| Tax (liabilities)/ assets | (40,691 | ) | (5,168 | ) | (111 | ) | (45,970 | ) |
^*^ Restated, refer to note 41.
47
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 17 | Exploration and evaluation assets | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Bilboes Gold | Motapa | Maligreen | GG | Sabiwa | Abercorn | Valentine | Total | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Balance at January 1, 2023 | – | 7,844 | 5,626 | 3,723 | 294 | 27 | 65 | 17,579 | |||||||||||
| Acquisition at costs: | |||||||||||||||||||
| - Mining claims acquired | 73,198 | – | – | – | – | – | – | 73,198 | |||||||||||
| Decommissioning asset estimation adjustment | – | 1,466 | 152 | – | – | – | – | 1,618 | |||||||||||
| Exploration costs: | |||||||||||||||||||
| - Consumables and drilling | – | 903 | 102 | – | – | – | – | 1,005 | |||||||||||
| - Contractor | – | 2 | – | – | – | – | – | 2 | |||||||||||
| - Labour | – | 377 | 111 | – | – | – | – | 488 | |||||||||||
| - Power | – | – | 7 | – | – | – | – | 7 | |||||||||||
| - Other | 375 | – | – | – | – | – | – | 375 | |||||||||||
| Balance at December 31, 2023 | 73,573 | 10,592 | 5,998 | 3,723 | 294 | 27 | 65 | 94,272 | |||||||||||
| Balance at January 1, 2024 | **** | 73,573 | **** | 10,592 | **** | 5,998 | **** | 3,723 | **** | 294 | **** | 27 | **** | 65 | **** | 94,272 | |||
| Decommissioning asset estimation adjustment | **** | (961 | ) | **** | (882 | ) | **** | 8 | – | – | – | – | **** | (1,835 | ) | ||||
| Exploration costs: | |||||||||||||||||||
| - Consumables and drilling | – | **** | 1,792 | **** | 19 | – | – | – | – | **** | 1,811 | ||||||||
| - Contractor | – | **** | 14 | **** | 5 | – | – | – | – | **** | 19 | ||||||||
| - Labour | – | **** | 576 | – | **** | 51 | – | – | – | **** | 627 | ||||||||
| - Power | – | **** | 74 | **** | 3 | – | – | – | – | **** | 77 | ||||||||
| - Other | – | **** | 67 | – | – | – | – | – | **** | 67 | |||||||||
| Preliminary economic assessment and feasibility study | **** | 2,288 | – | – | – | – | – | – | **** | 2,288 | |||||||||
| Balance at December 31, 2024 | **** | 74,900 | **** | 12,233 | **** | 6,033 | **** | 3,774 | **** | 294 | **** | 27 | **** | 65 | **** | 97,326 |
Non cash acquisitions of exploration and evaluation assets for the year consist of $1,054 (2023: $73,198 Bilboes acquisition, $1,618 decommissioning and $40 Bilboes lease right of use asset) included in trade and other payables at December 31, 2024.
There were no impairment indicators during 2024 on exploration and evaluation assets.
48
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 17 | Exploration and evaluation assets (continued) |
|---|---|
| 17.1 | Bilboes Gold |
| --- | --- |
Caledonia signed a conditional agreement (the “Sale and Purchase Agreement”) to purchase 100% of Bilboes Gold Limited (“Bilboes Gold”) on July 21, 2022. Bilboes Gold is the holding company of Bilboes Holdings that owns high-grade sulphide resources and the mining claims to the oxide mine deposit. It was agreed that Caledonia would purchase Bilboes Gold for a consideration to be settled by issue to the sellers of 5,123,044 new shares in Caledonia, comprising initial consideration shares, escrow consideration shares and deferred consideration shares. In addition to the shares a 1% net smelter royalty (“NSR”) was granted on the Bilboes’ future revenues to one of the sellers, Baker Steel Resources Trust Limited (“Baker Steel”). The Sale and Purchase Agreement gave Caledonia the rights to the sulphide project in addition to the right to mine the Bilboes oxide mine.
On January 6, 2023, following the satisfaction of conditions precedent, Caledonia completed the acquisition of Bilboes Gold.
The acquisition of Bilboes Gold was classified as an asset and liability acquisition as there were no inputs, processes and outputs and it was not a business combination in terms of IFRS 3 Business Combinations.
Upon completion of the transaction on January 6, 2023, the initial consideration shares were issued, in the amount of 4,425,797 common shares, to the three sellers of Bilboes Gold Limited and the NSR agreement was signed.
The escrow consideration shares of 441,095 common shares of Caledonia were issued to one of the sellers in settlement of a separate commercial arrangement between its subsidiary and the holding company of another seller, and upon receipt by the Company of a “share adjustment notice” instructing the issue of the shares. The share adjustment notice was only issued once approval had been obtained from the Reserve Bank of Zimbabwe for such commercial arrangement. On March 30, 2023, the 441,095 common shares were issued after the share adjustment notice was received.
Deferred consideration shares of 256,152 common shares of Caledonia were issued to the sellers on April 11, 2023. Total consideration shares issued for the acquisition of Bilboes Gold amounted to 5,123,044 shares with the value of the consideration shares set at US$65.677 million. The value of the initial consideration shares issued was based on the last trading day's closing share price on NYSE American LLC before completion of US$12.82 per share.
| 17.2 | Motapa |
|---|
On November 1, 2022 Caledonia entered into a share purchase agreement with Bulawayo Mining Company Limited (“Bulawayo Mining”) to acquire all the shares of Motapa Mining Company UK Limited (“Motapa”), along with its wholly owned subsidiary Arraskar Investments (Private) Limited (“Arraskar”) (“Share Purchase Agreement”).
Caledonia considers Motapa to be highly prospective and strategically important to its growth ambitions in Zimbabwe in terms of both location and scale. Motapa is a large exploration property which is contiguous to the Bilboes gold project.
49
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 17 | Exploration and evaluation assets (continued) |
|---|---|
| 17.2 | Motapa (continued) |
| --- | --- |
The Motapa asset has been mined throughout most of the second half of the 20th century, Caledonia understands that during this period the region produced as much as 300,000 ounces of gold. Whilst none of the mining infrastructure remains, the evidence of historical mining will provide guidance to our exploration team in best understanding the prospectivity of the region.
The acquisition was accounted for as an asset acquisition as the net assets acquired do not meet the definition of a business. The purchase price of the net assets acquired was allocated to exploration and evaluation assets based on management’s estimation of the fair value at acquisition.
The initial purchase price of $1 million was paid on November 1, 2022. Stamp duties of $41 were paid on November 9, 2022. There were no liabilities assumed with the acquisition of Motapa and Arraskar. The remainder of the purchase price was settled by way of loan notes. The final settlement was made on July 3, 2023.
Exploration drilling at Motapa has been focused on three main areas which have historically been commercially mined i.e. Motapa North, Motapa Central and Motapa South. The Motapa North area abuts directly on the southern lease boundary of Bilboes. A fourth area, Mpudzi, where there is no historic evidence of open pit mining, was identified through surface trenching and was followed up with drilling.
To date, 7,728 samples from drilling activities have been submitted and 5,512 assay results have been received. With Motapa's location adjacent to Bilboes, significant synergies could be obtained should a viable resource body be identified through the planned exploration program.
| 17.3 | Maligreen |
|---|
On November 3, 2021 the mining claims over the Maligreen project (“Maligreen”), a property situated in the Gweru mining district in the Zimbabwe Midlands, were transferred to Caledonia Holdings Zimbabwe (Private) Limited for a total cash consideration of US$4 million.
Maligreen is a substantial brownfield exploration opportunity with significant historical exploration and evaluation work having been conducted on the property over the last 30 years including:
| • | An estimated 60,000 meters of diamond core and percussion drilling |
|---|---|
| • | 3.5 tonnes of bulk metallurgical test work |
| --- | --- |
| • | Aeromagnetic and ground geophysical surveys |
| --- | --- |
The total land area of Maligreen is approximately 550 hectares comprising two historic open pit mining operations which produced approximately 20,000 oz of gold mined from oxides between 2000 and 2002 after which the operation was closed.
50
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 17 | Exploration and evaluation assets (continued) |
|---|---|
| 17.3 | Maligreen (continued) |
| --- | --- |
On November 7, 2022 the Company published an announcement and an updated technical report on SEDAR updating the estimated mineral resources at Maligreen. The report has an effective date of September 30, 2022 and estimates measured and indicated mineral resources of 8.03 million tonnes at a grade of 1.71g/t containing approximately 442,000 ounces of gold and inferred mineral resources of 6.17 million tonnes at a grade of 2.12g/t containing approximately 420,000 ounces of gold. The upgrade to the mineral resources at Maligreen improves the geological confidence of approximately half the mineral resources from inferred to measured and indicated mineral resources from the previous mineral resources statement.
51
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 18 | Property, plant and equipment | ||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost | Land and Buildings | Right of use asset | Mine development,<br><br> <br>infrastructure<br><br> <br>and other | Assets under<br><br> <br>construction and<br><br> <br>decommissioning<br><br> <br>assets | Plant & Equipment | Furniture & Fittings | Motor Vehicles | Solar Plant | Total | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Balance at January 1, 2023 | 15,194 | 525 | 82,154 | 46,453 | 70,485 | 1,563 | 3,314 | 14,138 | 233,826 | ||||||||||||||||||
| Additions^*^ | – | – | – | 28,276 | 538 | 335 | 294 | 163 | 29,606 | ||||||||||||||||||
| Impairments | – | – | (872 | ) | – | (36 | ) | – | – | – | (908 | ) | |||||||||||||||
| Disposals | – | – | – | – | (33 | ) | – | – | – | (33 | ) | ||||||||||||||||
| Reallocations between asset classes | 1,492 | – | 37,116 | (39,099 | ) | 491 | – | – | – | – | |||||||||||||||||
| Reallocate to assets held for sale | – | – | – | – | – | – | – | (14,301 | ) | (14,301 | ) | ||||||||||||||||
| Foreign exchange movement | – | (24 | ) | – | (2 | ) | – | (37 | ) | (3 | ) | – | (66 | ) | |||||||||||||
| Balance at December 31, 2023 | 16,686 | 501 | 118,398 | 35,628 | 71,445 | 1,861 | 3,605 | – | 248,124 | ||||||||||||||||||
| Balance at January 1, 2024 | **** | 16,686 | **** | 501 | **** | 118,398 | **** | 35,628 | **** | 71,445 | **** | 1,861 | **** | 3,605 | – | **** | 248,124 | ||||||||||
| Additions^*^ | **** | 214 | **** | 265 | **** | 128 | **** | 25,012 | **** | 1,532 | **** | 243 | **** | 187 | – | **** | 27,581 | ||||||||||
| Impairments^~^ | **** | (29 | ) | – | – | – | **** | (3,367 | ) | – | – | – | **** | (3,396 | ) | ||||||||||||
| Disposals | – | – | – | – | – | **** | (3 | ) | **** | (233 | ) | – | **** | (236 | ) | ||||||||||||
| Derecognition | – | **** | (256 | ) | – | – | – | – | – | – | **** | (256 | ) | ||||||||||||||
| Reallocations between asset classes | – | – | **** | 24,900 | **** | (25,573 | ) | **** | 673 | – | – | – | – | ||||||||||||||
| Foreign exchange movement | – | **** | (4 | ) | – | – | – | **** | (11 | ) | – | – | **** | (15 | ) | ||||||||||||
| Balance at December 31, 2024 | **** | 16,871 | **** | 506 | **** | 143,426 | **** | 35,067 | **** | 70,283 | **** | 2,090 | **** | 3,559 | – | **** | 271,802 | ||||||||||
| ^*^ | Included in additions is the change in estimate for the decommissioning asset of $317 (2023: $1,962). | ||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||
| ^~^ | Included in the 2024 impairments are drill rigs with a net book value amount of $309, Lima plant at $1,204, sinking headgear of $91 and other assets of $107. These assets were impaired to a net book value amount of $Nil, as management no longer intends to use it in the manner originally intended and being derecognised. |
52
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 18 | Property, plant and equipment (continued) | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Accumulated depreciation and Impairment losses | Land and Buildings | Right of use asset | Mine development,<br><br> <br>infrastructure<br><br> <br>and other | Assets under<br><br> <br>construction and<br><br> <br>decommissioning<br><br> <br>assets | Plant & Equipment | Furniture & Fittings | Motor Vehicles | Solar Plant | Total | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Balance at January 1, 2023 | 8,350 | 230 | 12,368 | 693 | 29,257 | 1,100 | 2,845 | – | 54,843 | |||||||||||||||||
| Depreciation for the year | 1,012 | 124 | 5,459 | 93 | 6,573 | 185 | 258 | 782 | 14,486 | |||||||||||||||||
| Accumulated depreciation for assets reallocated to assets held for sale | – | – | – | – | – | – | – | (782 | ) | (782 | ) | |||||||||||||||
| Accumulated depreciation - impairments | – | – | (21 | ) | – | (10 | ) | – | – | – | (31 | ) | ||||||||||||||
| Foreign exchange movement | – | (9 | ) | – | – | – | (30 | ) | (2 | ) | – | (41 | ) | |||||||||||||
| Balance at December 31, 2023 | 9,362 | 345 | 17,806 | 786 | 35,820 | 1,255 | 3,101 | – | 68,475 | |||||||||||||||||
| Balance at January 1, 2024 | **** | 9,362 | **** | 345 | **** | 17,806 | **** | 786 | **** | 35,820 | **** | 1,255 | **** | 3,101 | – | **** | 68,475 | |||||||||
| Depreciation for the year | **** | 1,102 | **** | 127 | **** | 7,189 | **** | 77 | **** | 7,099 | **** | 205 | **** | 222 | – | **** | 16,021 | |||||||||
| Impairment for the year | **** | 22 | – | – | – | **** | 1,689 | – | – | – | **** | 1,711 | ||||||||||||||
| Accumulated depreciation and impairment - impairments | **** | (29 | ) | – | – | – | **** | (3,367 | ) | – | – | – | **** | (3,396 | ) | |||||||||||
| Accumulated depreciation on disposals | – | – | – | – | – | **** | (2 | ) | **** | (202 | ) | – | **** | (204 | ) | |||||||||||
| Accumulated depreciation derecognised assets | – | **** | (256 | ) | – | – | – | – | – | – | **** | (256 | ) | |||||||||||||
| Foreign exchange movement | – | **** | 2 | – | – | – | **** | (7 | ) | – | – | **** | (5 | ) | ||||||||||||
| Balance at December 31, 2024 | **** | 10,457 | **** | 218 | **** | 24,995 | **** | 863 | **** | 41,241 | **** | 1,451 | **** | 3,121 | – | **** | 82,346 | |||||||||
| Carrying amounts | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| At December 31, 2023 | 7,324 | 156 | 100,592 | 34,842 | 35,625 | 606 | 504 | – | 179,649 | |||||||||||||||||
| At December 31, 2024 | **** | 6,414 | **** | 288 | **** | 118,431 | **** | 34,204 | **** | 29,042 | **** | 639 | **** | 438 | – | **** | 189,456 |
53
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 18 | Property, plant and equipment (continued) |
|---|---|
| 18.1 | Impairment considerations |
| --- | --- |
At year end management identified indicators of impairment at the Blanket CGU. The Blanket CGU excluded the Solar plant that is classified as held for sale at December 31, 2024. No impairment indicators were identified at other CGUs nor at a consolidated level, excluding the Blanket CGU. In calculating the recoverable amount of the Blanket CGU, management used the following assumptions as their best estimate:
| • | Gold price per ounce ranging from $2,136 to $2,575. |
|---|---|
| • | Life of mine (“LoM”) to 2041 (that is inclusive of inferred resources and it based on an internal estimate representing management’s best estimate of the LoM inclusive of the latest drilling results). |
| --- | --- |
| • | grade ranging between 2.81g/t to 3.81g/t. |
| --- | --- |
| • | Production ounces between 71,082 and 96,284 per annum over the LoM. |
| --- | --- |
| • | On mine cost of between $838 to $1,135 (real) over the LoM. |
| --- | --- |
| • | Peak capex of $34.9 million. |
| --- | --- |
| • | Weighted average cost of capital of 16.6%. |
| --- | --- |
| • | Income tax of 25.75% on taxable income. |
| --- | --- |
No impairments were identified at Blanket.
Items of property, plant and equipment are depreciated over the LoM, which includes planned production from inferred resources. These inferred resources are included in the calculation when the economic recovery thereof is demonstrated by the achieved recovered grade relative to the mine’s cut off grade for the period 2006 to 2024. The cut off grade is 2.10 g/t (2023: 2.10 g/t) while the recovered grade is expected to range from 2.63 g/t to 3.57 g/t over the period. All-in-sustaining-cost has remained consistently below the gold price received over this period resulting in economic recovery of the inferred resources.
| 18.2 | Cash flow used in acquisition of property, plant and equipment: | |||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | |||||
| --- | --- | --- | --- | --- | --- | --- |
| Additions | **** | 27,581 | 29,606 | |||
| Adjustments for: | ||||||
| Net property, plant and equipment included in prepayments | **** | 679 | 329 | |||
| Net property, plant and equipment included in trade and other payables | **** | (201 | ) | 583 | ||
| Right of use asset recognition (note 19) | **** | (265 | ) | – | ||
| Change in estimate for decommissioning asset - adjustment capitalised in property, plant and equipment (note 29) | **** | (317 | ) | (1,962 | ) | |
| **** | 27,477 | 28,556 | ||||
| 18.3 | Capital commitments | |||||
| --- | --- |
The amount of contractual commitment for the acquisition of property, plant and equipment at December 31, 2024 amounted to $2,503 (2023: $2,035).
54
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 19 | Leases |
|---|
Leases as lessee
The Group leases administrative offices and a warehouse. The leases, which the Group normally enters into, typically run for a period of 3 to 6 years, with an option to renew the lease after that date. Three leases for the administrative offices expired in 2024 (South Africa and Zimbabwe) and one lease will expire in 2025 (Jersey, Channel Islands). Only one administrative office lease (South Africa) was renewed and expires in 2028. The warehouse lease entered in during 2024 expires in 2026.
Information about leases for which the Group is a lessee is presented below.
| 19.1 | Amounts recognised in the statement of financial position |
|---|
Right of use assets
Right of use assets related to leased properties are presented as part of property, plant and equipment (refer to note 18).
| 2024 | 2023 | |||||
|---|---|---|---|---|---|---|
| Balance at January 1 | **** | 156 | 295 | |||
| Depreciation | **** | (127 | ) | (124 | ) | |
| Additions | **** | 265 | – | |||
| Derecognition | **** | (256 | ) | – | ||
| Derecognition – accumulated depreciation | **** | 256 | – | |||
| Foreign currency movement | **** | (6 | ) | (15 | ) | |
| Balance at December 31 | **** | 288 | 156 |
Lease liabilities
| 2024 | 2023 | ||||||
|---|---|---|---|---|---|---|---|
| Balance at January 1 | **** | 208 | 313 | ||||
| Additions to lease liability | **** | 265 | 67 | ||||
| Finance cost | **** | 10 | 22 | ||||
| Lease payments | **** | (182 | ) | (184 | ) | ||
| Foreign currency movement | **** | (7 | ) | (10 | ) | ||
| Balance at December 31 | **** | 294 | 208 | ||||
| 19.2 | Amounts recognised in profit or loss | ||||||
| --- | --- | ||||||
| 2024 | 2023 | 2022 | |||||
| --- | --- | --- | --- | --- | --- | --- | --- |
| Finance cost on lease liabilities (note 15) | **** | 10 | 22 | 31 | |||
| Unrealised foreign exchange gain (loss) | **** | 1 | (5 | ) | 19 | ||
| Depreciation (note 18) | **** | 127 | 124 | 137 | |||
| **** | 138 | 141 | 187 |
55
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 19 | Leases (continued) | |||||
|---|---|---|---|---|---|---|
| 19.3 | Amounts recognised in statement of cash flows | |||||
| --- | --- | |||||
| 2024 | 2023 | 2022 | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Total cash outflow for leases - principal | **** | 172 | 162 | 119 | ||
| Total cash outflow for leases - finance cost | **** | 10 | 22 | 31 | ||
| Total cash outflow for leases - payments | **** | 182 | 184 | 150 | ||
| 19.4 | Maturity of lease liabilities | |||||
| --- | --- |
The maturity of lease liabilities are as follows as at December 31:
| 2024 | 2023 | |||||
|---|---|---|---|---|---|---|
| Less than one year | **** | 121 | 175 | |||
| One to two years | **** | 82 | 42 | |||
| Two to three years | **** | 73 | – | |||
| Three to four years | **** | 79 | – | |||
| Total lease payments | **** | 355 | 217 | |||
| Finance cost | **** | (61 | ) | (9 | ) | |
| Present value of lease liabilities | **** | 294 | 208 | |||
| 20 | Inventories | |||||
| --- | --- | |||||
| 2024 | 2023 | |||||
| --- | --- | --- | --- | --- | ||
| Consumable stores^*^ | **** | 20,712 | 18,001 | |||
| Gold in progress and Ore Stockpile^@^ | **** | 3,056 | 2,303 | |||
| **** | 23,768 | 20,304 | ||||
| ^*^ | Included in consumables stores is an amount of ($2,105) (2023: ($1,793)) for provision for obsolete stock for items that are not compatible with plant and equipment currently in use. Write down of inventory amounted to $312 for 2024 (2023:$283). | |||||
| --- | --- | |||||
| ^@^ | Gold work in progress balance as at December 31, 2024 consists of 3,442 ounces (2023: 3,057 ounces) of gold. The ore stockpile relates to a surface stockpile of approximately 8,487 tonnes (2023: Nil tonnes) of crushed ore containing approximately 700 ounces of recoverable gold. Stockpiles are measured by estimating the number of tons added and removed from the stockpile, the number of contained gold ounces is based on assay data, and the estimated recovery percentage based on the expected processing method. |
56
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 21 | Trade and other receivables | |||
|---|---|---|---|---|
| 2024 | 2023 | |||
| --- | --- | --- | --- | --- |
| Bullion sales receivable | **** | 4,095 | 5,403 | |
| VAT receivables | **** | 8,164 | 4,259 | |
| Deposits for stores, equipment and other receivables | **** | 416 | 290 | |
| **** | 12,675 | 9,952 |
The carrying value of trade receivables is considered a reasonable approximation of fair value and are short term in nature. No provision for expected credit losses was recognised in the current or prior period as none of the debtors were past due and there has been no historic credit losses on debtors. Up to the date of approval of these financial statements all of the outstanding bullion sales receivable were settled in full. A Blanket VAT receipt of $4.9 million was delayed by the Zimbabwean Revenue Authority ("ZIMRA") and applied against our revenue royalty tax payments. This resulted in a dual deduction of revenue royalties by ZIMRA and Fidelity on behalf of ZIMRA. The remaining VAT receivable was applied against our other taxes payable in quarter 1 of 2025.
| 22 | Prepayments | ||
|---|---|---|---|
| 2023 | |||
| --- | --- | --- | --- |
| Caledonia Mining South Africa (Proprietary) Limited (“CMSA”) suppliers | 462 | 527 | |
| Blanket Mine third party suppliers - | 1,689 | 808 | |
| Blanket Mine third party suppliers - ZiG | 4,289 | – | |
| Blanket Mine third party suppliers - RTGS | – | 938 | |
| Other prepayments | 308 | 265 | |
| 6,748 | 2,538 |
All values are in US Dollars.
| 23 | Cash and cash equivalents | |||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | |||||
| --- | --- | --- | --- | --- | --- | --- |
| Bank balances | **** | 4,260 | 4,252 | |||
| Restricted cash^*^ | – | 2,456 | ||||
| Cash and cash equivalents | **** | 4,260 | 6,708 | |||
| Overdrafts | **** | (12,928 | ) | (17,740 | ) | |
| Net cash and cash equivalents | **** | (8,668 | ) | (11,032 | ) | |
| ^*^ | Cash of $2,456 (denominated in RTGS$) held by Blanket Mine was earmarked by Stanbic Bank Zimbabwe as a letter of credit in favour of CMSA. The letter of credit was issued by Stanbic Bank Zimbabwe on November 28, 2023 and settled in January, 2024. The cash on maturity was transferred to CMSA’s bank account, denominated in South African Rands. | |||||
| --- | --- |
57
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 23 | Cash and cash equivalents (continued) | |||||
|---|---|---|---|---|---|---|
| Expiry | Repayment term | Principal value<br><br> <br>(million) | Balance drawn at December 31, 2024 (million) | |||
| --- | --- | --- | --- | --- | --- | --- |
| Overdraft facilities | ||||||
| Stanbic Bank Limited - ZiG | Mar-25 | On demand | ZiG6.7 | $ | Nil | |
| Stanbic Bank Limited - | Mar-25 | On demand | $ | 4.0 | $ | 1.5 |
| CABS Bank - | Oct-25 | On demand | $ | 0.8 | $ | 0.7 |
| Ecobank - | Feb-25 | On demand | $ | 6.0 | $ | 4.4 |
| Nedbank - | Apr-25 | On demand | $ | 7.0 | $ | 6.3 |
| Letter of credit | ||||||
| Stanbic Bank Limited – | Mar-25 | $ | 2.5 | $ | Nil |
All values are in US Dollars.
| 24 | Assets and liabilities associated with assets held for sale | |||
|---|---|---|---|---|
| 2024 | 2023 | |||
| --- | --- | --- | --- | --- |
| Non-current assets held for sale | **** | **** | **** | **** |
| Solar plant | **** | 13,512 | 13,519 | |
| Liabilities associated with assets held for sale | **** | **** | **** | **** |
| Site restoration liability | **** | 104 | 128 |
In the second quarter of 2023 management embarked on a marketing process to locate a buyer for the Company’s solar plant located next to Blanket Mine. Various offers were received and a counterparty with a non-binding offer was given exclusivity to further negotiate the sale of the plant after proving their ability to operate and fund solar plants of similar size and complexity in Africa. The offer was received from a reputable global renewable energy operator and management is in an advanced stage of executing agreements to sell the solar plant. It is proposed that the new owners will exclusively supply Blanket with electricity from the plant, on a take-or-pay basis and in doing so secure Blanket’s future power supply. This has the benefit of realising a cash profit on the sale of the plant and generate cash for reinvestment in our gold projects. In addition, management can focus on Caledonia’s core business of gold mining.
On September 28, 2023 the Board approved management to further negotiate the purchase of the solar plant with the potential buyer. The assets were available for sale in their condition on September 28, 2023 and therefore met the criteria to be classified as held for sale.
Management determined the value of the solar plant as the lower of the fair value less cost to sell and the carrying amount. The proceeds of the disposal are expected to substantially exceed the carrying amount of the related net assets and accordingly no impairment losses have been recognised on the classification of the solar plant. The asset was classified as property, plant and equipment before the reclassification to assets held for sale.
58
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 24 | Assets and liabilities associated with assets held for sale (continued) |
|---|
The change in estimate for the liability held for sale is mainly due to the Blanket Mine’s LoM that was extended to 2041 (that is inclusive of inferred resources and is based on an internal estimate representing management’s best estimate of the LoM inclusive of the latest drilling results).
Caledonia announced on October 1, 2024 that it has signed a conditional sale agreement for the entire issued share capital of its Zimbabwe subsidiary, Caledonia Mining Services (Private) Limited ("CMS"), which owns and operates the 12.2MWac solar plant that supplies power to Blanket Mine. CMS is to be sold to CrossBoundary Energy Holdings ("CBE") for $22.4 million, subject to the fulfilment of outstanding conditions precedent. The extension of the classification of the solar plant as an asset held for sale beyond the 12 months is supported by the ongoing commitment from the board to sell the solar plant to CBE. The time for the outstanding conditions to be fulfilled in line with the agreement is outside of management’s control. Management believes that the sale remains highly probable.
During 2024 the faulty transformers were impaired at a carrying amount of $385 and replaced at a cost of $408.
The purchase consideration of $22.4 million is payable in cash, and the power generation of the solar plant will continue to be sold to Blanket Mine by way of a power purchase agreement. Upon completion of the sale, Caledonia will realise a pre-tax profit of $9 million on the $13.4 million construction cost of the solar plant.
| 25 | Share capital |
|---|
Authorised
Unlimited number of ordinary shares of no par value.
Unlimited number of preference shares of no par value.
Issued ordinary shares
| Number of<br><br> <br>fully paid shares | Amount | |||
|---|---|---|---|---|
| January 1, 2023 | 12,833,126 | 83,471 | ||
| Shares issued: | ||||
| - share-based payment - employees (note 12.1.1) | 24,389 | 351 | ||
| - equity raise | 1,207,514 | 15,569 | ||
| - Bilboes Gold Limited acquisition | 5,123,044 | 65,677 | ||
| December 31, 2023 | 19,188,073 | 165,068 | ||
| Shares issued: | ||||
| - share-based payment - employees (note 12.1.1) | **** | 6,787 | **** | 83 |
| - share-based payment - employees (note 12.2.2) | **** | 14,694 | **** | 220 |
| - options exercised (note 12.2.3) | **** | 5,000 | **** | 37 |
| December 31, 2024 | **** | 19,214,554 | **** | 165,408 |
59
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 26 | Reserves |
|---|
Foreign currency translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations with functional currencies that differ from the presentation currency.
Share-based payment reserve
The share-based payment reserve comprises the fair value of equity instruments granted to employees, directors and service providers under share option plans (refer to note 12) and equity instruments issued to Blanket’s indigenous shareholders under Blanket Mine’s Indigenisation Transaction (refer note 5).
Contributed surplus
The contributed surplus reserve comprises the reduction in stated capital as approved by shareholders at the special general meeting on January 24, 2013 to be able to commence dividend payments.
Reserves
| 2024 | 2023 | |||||
|---|---|---|---|---|---|---|
| Foreign currency translation reserve | **** | (10,525 | ) | (10,409 | ) | |
| Contributed surplus | **** | 132,591 | 132,591 | |||
| Equity-settled share-based payment reserve | **** | 16,399 | 15,637 | |||
| Total | **** | 138,465 | 137,819 | |||
| 27 | Earnings per share | |||||
| --- | --- | |||||
| Weighted average number of shares – Basic earnings per share | **** | **** | **** | **** | ||
| --- | --- | --- | --- | --- | --- | --- |
| (in number of shares) | 2024 | 2023 | 2022 | |||
| Issued shares at the beginning of year (note 25) | **** | 19,188,073 | 12,833,126 | 12,756,606 | ||
| Weighted average shares issued | **** | 12,934 | 5,792,435 | 74,214 | ||
| Weighted average number of shares at December 31 | **** | 19,201,007 | 18,625,561 | 12,830,820 | ||
| Weighted average number of shares - Diluted earnings per share | **** | **** | **** | **** | ||
| --- | --- | --- | --- | --- | --- | --- |
| (in number of shares) | 2024 | 2023 | 2022 | |||
| Weighted average at December 31 | **** | 19,201,007 | 18,625,561 | 12,830,820 | ||
| Effect of dilutive options | **** | 1,594 | 6,550 | 6,482 | ||
| Weighted average number of shares (diluted) at December 31 | **** | 19,202,601 | 18,632,111 | 12,837,302 |
The average market value of the Company’s shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the year during which the options were outstanding. Options of 8,406 (2023: 13,450, 2022: 13,518) were excluded from the dilutive earnings per share calculation as these options were anti-dilutive.
The quantity of options outstanding as at year end that were out of the money amounted to $1 (2023: $Nil, 2022: $Nil) options.
60
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 27 | Earnings per share (continued) |
|---|
The calculation of total basic and diluted earnings per share for the year ended December 31, 2024 was calculated as follows:
| ^*^2023 | *2022 | ||||||
|---|---|---|---|---|---|---|---|
| Profit for the year attributable to owners of the Company (basic and diluted) | 17,899 | (7,862 | ) | 11,239 | |||
| Blanket Mine Employee Trust Adjustment | (389 | ) | (262 | ) | (363 | ) | |
| Profit attributable to ordinary shareholders (basic and diluted) | 17,510 | (8,124 | ) | 10,876 | |||
| Basic earnings (loss) per share - | 0.91 | (0.44 | ) | 0.85 | |||
| Diluted earnings (loss) per share - | 0.91 | (0.44 | ) | 0.85 |
All values are in US Dollars.
^*^ Restated, refer to note 41.
Basic earnings are adjusted for the amounts that accrue to other equity holders of subsidiaries upon the full distribution of post-acquisition earnings to shareholders.
Diluted earnings are calculated on the basis that the unpaid ownership interests of Blanket Mine’s indigenous shareholders are effectively treated as options whereby the weighted average fair value for the period of the Blanket Mine shares issued to the indigenous shareholders and which are subject to settlement of the loan accounts is compared to the balance of the loan accounts and any excess portion is regarded as dilutive. The difference between the number of Blanket Mine shares subject to the settlement of the loan accounts and the number of Blanket Mine shares that would have been issued at the average fair value, is treated as the issue of shares for no consideration and regarded as dilutive shares. The calculated dilution is taken into account with additional earnings attributable to the dilutive shares in Blanket Mine, if any. The interest of the NIEEF shareholding was anti-dilutive (i.e., the value of the options was less than the outstanding loan balance). Accordingly, there was no adjustment to fully diluted earnings attributable to shareholders.
| 28 | Non-controlling interest |
|---|
Blanket Mine’s (incorporated in Zimbabwe) NCI share is recognised at an effective share and voting rights of 13.2% (2023: 13.2%, 2022: 13.2%) based on summarised results as follows:
| 2024 | ^*^2023 | *2022 | ||||||
|---|---|---|---|---|---|---|---|---|
| Current assets | **** | 40,915 | 33,126 | 30,397 | ||||
| Non-current assets | **** | 197,701 | 188,134 | 172,611 | ||||
| Current liabilities | **** | (4,320 | ) | (10,277 | ) | (9,583 | ) | |
| Non-current liabilities | **** | (55,123 | ) | (50,893 | ) | (43,832 | ) | |
| Net assets of Blanket Mine (100%) | **** | 179,173 | 160,090 | 149,593 | ||||
| Carrying amount of NCI of 13.2% (2023: 13.2%, 2022: 13.2%) | **** | 20,587 | 18,456 | 16,946 | ||||
| Revenue | **** | 179,368 | 146,314 | 142,082 | ||||
| Profit after tax | **** | 39,053 | 22,899 | 29,920 | ||||
| Total comprehensive income of Blanket Mine (100%) | **** | 39,053 | 22,899 | 29,920 | ||||
| Profit allocated to NCI of 13.2% (2023: 13.2%, 2022: 13.2%) | **** | 5,155 | 3,022 | 3,950 | ||||
| Dividend allocated to NCI of 13.2% (2023: 13.2%, 2022: 13.2%) | **** | (3,024 | ) | (1,512 | ) | (1,814 | ) |
61
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 28 | Non-controlling interest (continued) | |||||||
|---|---|---|---|---|---|---|---|---|
| 2024 | ^*^2023 | *2022 | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Net cash inflow from operating activities | **** | 42,592 | 28,087 | 50,048 | ||||
| Net cash outflow from investing activities | **** | (27,916 | ) | (28,146 | ) | (37,798 | ) | |
| Net cash outflow from financing activities | **** | (11,174 | ) | (5,017 | ) | (16,506 | ) | |
| Net cash inflow (outflow) | **** | 3,502 | (5,076 | ) | (4,256 | ) |
^*^ Restated, refer to note 41.
| 29 | Provisions |
|---|
Site restoration
Site restoration relates to the estimated cost of closing down the mines and projects and represent the site and environmental restoration costs, estimated to be paid as a result of mining activities or previous mining activities. For the Blanket Mine site restoration costs are capitalsed in property, plant and equipment with an increase in the provision at the net present value of the estimated future and inflated cost of site rehabilitation. Subsequently the capitalised cost are amortised over the life of the mine and the provision is unwound over the period to estimated restoration. For properties in the exploration and evaluation phase, such as the Bilboes, Maligreen and Motapa projects, site restoration costs are capitalised in exploration and evaluation assets with an increase in the provision at the undiscounted value of the estimated cost of site rehabilitation. Subsequently the costs capitalised are not amortised and the provision is not unwound.
| Reconciliation of site restoration provisions | 2024 | 2023 | |||
|---|---|---|---|---|---|
| Blanket Mine | |||||
| Balance January 1 | **** | 4,766 | 2,823 | ||
| Unwinding of discount (note 18) | **** | 197 | 109 | ||
| Change in estimate (Blanket Mine) (note 18) | **** | 317 | 1,834 | ||
| Balance December 31 | **** | 5,280 | 4,766 | ||
| Motapa, Maligreen and Bilboes Gold | |||||
| Balance January 1 | **** | 6,219 | 135 | ||
| Change in estimate (Motapa) (note 17) | **** | (882 | ) | 1,466 | |
| Change in estimate (Maligreen) (note 17) | **** | 8 | 152 | ||
| Change in estimate (Bilboes Gold) (note 17) | **** | (961 | ) | 4,466 | |
| Balance December 31 | **** | 4,384 | 6,219 | ||
| Total balance December 31 | **** | 9,664 | 10,985 | ||
| Current | – | – | |||
| Non-current | **** | 9,664 | 10,985 | ||
| **** | 9,664 | 10,985 |
The discount rate in calculating the present value of the Blanket Mine provision is 4.86% (2023: 4.14%) and is based on a risk-free rate and cash flows are estimated at an average 2.14% inflation (2023: 2.40%). The gross rehabilitation costs, before discounting, amounted to $7,491 (2023: $5,629) for Blanket Mine as at December 31, 2024.
62
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 29 | Provisions (continued) |
|---|
The undiscounted gross rehabilitation costs for exploration and evaluation assets as at December 31, 2024, amounted to $3,505 (2023: $4,466) for Bilboes Holdings, $584 (2023: $1,466) for Motapa and $295 (2023: $287) for Maligreen.
| 30 | Loans and borrowings | ||||
|---|---|---|---|---|---|
| 2024 | 2023 | ||||
| --- | --- | --- | --- | --- | --- |
| Balance January 1 | – | – | |||
| Cashflows | |||||
| Amounts received | **** | 3,000 | – | ||
| Repayment - capital | **** | (326 | ) | – | |
| Repayment - finance cost | **** | (293 | ) | – | |
| Non-cashflows | |||||
| Finance cost^*^ | **** | 293 | – | ||
| Balance December 31 | **** | 2,674 | – |
^*^ Finance cost are accounted for in note 15 on the effective interest rate method.
| Current | 1,174 | – | ||
|---|---|---|---|---|
| Non-current | 1,500 | – | ||
| 2,674 | – | |||
| Currency | Nominal interest rate | Face Value | Carrying value | |
| --- | --- | --- | --- | --- |
| Unsecured bank loan - CABS | USD | 8.25% + 12 months SOFR^#^ | 2,674 | 2,674 |
^#^ Secured Overnight Funding Rates (“SOFR”)
| 31 | Loan note instruments | ||||
|---|---|---|---|---|---|
| Loan note instruments - finance costs | **** | 2024 | 2023 | ||
| --- | --- | --- | --- | --- | --- |
| Motapa loan notes | – | 619 | |||
| Solar loan notes | 31.1 | **** | 846 | 549 | |
| **** | **** | 846 | 1,168 | ||
| Loan note instruments - financial liabilities | **** | 2024 | 2023 | ||
| --- | --- | --- | --- | --- | --- |
| Solar loan notes | 31.1 | **** | 9,168 | 7,112 | |
| **** | **** | 9,168 | 7,112 | ||
| Current | **** | **** | 855 | 665 | |
| Non-current | **** | **** | 8,313 | 6,447 | |
| **** | **** | 9,168 | 7,112 |
63
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 31 | Loan note instruments (continued) |
|---|---|
| 31.1 | Solar loan notes |
| --- | --- |
Following the commissioning of Caledonia’s wholly owned solar plant on February 2, 2023, the decision was taken to optimise the capital structure of the Group and provide additional debt instruments to the Zimbabwean financial market by way of issuing loan notes pursuant to a loan note instrument (“bonds”). The bonds were issued by the Zimbabwean registered entity owning the solar plant, Caledonia Mining Services (Private) Limited. The bonds carry an interest rate of 9.5% payable bi-annually and have a tenure of 3 years from the date of issue. The bond repayments are guaranteed by the Company. $9 million of bonds were in issue at December 31, 2024 (December 31, 2023: $7 million). During January 2025, $2.5 million of bonds were issued. All bonds were issued to Zimbabwean registered commercial entities. The bonds were transferred to Caledonia Holdings Zimbabwe (Private) Limited (“CHZ”) a subsidiary of the Company, except for the bonds issued in April 2024 and January 2025 which were directly issued by CHZ.
A summary of the bonds is as follows:
| 2024 | 2023 | |||||
|---|---|---|---|---|---|---|
| Balance January 1 | **** | 7,112 | – | |||
| Amounts received | **** | 2,000 | 7,000 | |||
| Transaction costs | **** | (30 | ) | (105 | ) | |
| Finance cost accrued | **** | 846 | 549 | |||
| Repayment - finance cost paid | **** | (760 | ) | (332 | ) | |
| Balance December 31 | **** | 9,168 | 7,112 | |||
| Current | **** | 855 | 665 | |||
| Non-current | **** | 8,313 | 6,447 | |||
| **** | 9,168 | 7,112 | ||||
| 32 | Trade and other payables | |||||
| --- | --- | |||||
| 2024 | 2023 | |||||
| --- | --- | --- | --- | --- | ||
| Trade payables | **** | 8,036 | 6,166 | |||
| Electricity accrual | **** | 1,670 | 2,676 | |||
| Audit fee | **** | 562 | 395 | |||
| Dividends due | **** | 2,522 | 1,048 | |||
| Other payables | **** | 924 | 692 | |||
| Financial liabilities | **** | 13,714 | 10,977 | |||
| Production and management bonus accrual - Blanket Mine | **** | 529 | 214 | |||
| Other employee benefits - other | **** | 2,235 | 2,229 | |||
| Other employee benefits - settlements | **** | 1,081 | 1,588 | |||
| Leave pay | **** | 2,838 | 2,655 | |||
| Bonus accrual | **** | 1,115 | 190 | |||
| Tailings storage facility - accrual | **** | 1,351 | – | |||
| Accruals | **** | 3,784 | 2,650 | |||
| Non-financial liabilities | **** | 12,933 | 9,526 | |||
| Total | **** | 26,647 | 20,503 |
64
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 33 | Cash flow information |
|---|
Non-cash items and information presented separately on the statements of cash flows statement:
| 2024 | 2023 | 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Operating profit | **** | 43,674 | *10,955 | *30,188 | |||||
| Adjustments for: | |||||||||
| Impairment of property, plant and equipment (note 18) | **** | 1,711 | 877 | 8,209 | |||||
| Impairment of exploration and evaluation assets | – | – | 467 | ||||||
| Impairment of solar plant - VAT and duty receivables | – | 720 | – | ||||||
| Impairment of assets held for sale (note 24) | **** | 385 | – | – | |||||
| Unrealised foreign exchange losses (gains) (note 9) | **** | 1,683 | *5 | *(2,648 | ) | ||||
| Cash-settled share-based expense (note 12.1) | **** | 201 | 463 | 609 | |||||
| Share-based expense included in production costs (note 12) | **** | 434 | 660 | 853 | |||||
| Cash portion of cash-settled share-based expense | **** | (691 | ) | (1,695 | ) | (1,468 | ) | ||
| Equity-settled share-based expense (note 12.2) | **** | 1,054 | 640 | 484 | |||||
| Equity-settled share-based employee tax on vesting | **** | (182 | ) | – | – | ||||
| Depreciation (note 18) | **** | 16,021 | 14,486 | 10,141 | |||||
| Fair value loss on derivative instruments (note 11) | **** | 831 | 1,119 | 401 | |||||
| Loss on disposal of property, plant and equipment (note 18) | **** | 32 | 33 | – | |||||
| Site restoration provision adjustment on assets and liabilities held for sale | **** | 6 | – | – | |||||
| Write down of inventory (note 8) | **** | 312 | 283 | 563 | |||||
| Cash generated from operations before working capital changes | **** | 65,471 | 28,546 | 47,799 | |||||
| Inventories | **** | (3,777 | ) | (2,182 | ) | 1,915 | |||
| Prepayments | **** | (3,718 | ) | 338 | (1,375 | ) | |||
| Trade and other receivables | **** | (5,611 | ) | (1,910 | ) | (1,561 | ) | ||
| Trade and other payables | **** | 3,073 | 1,606 | 2,879 | |||||
| Cash generated from operations | **** | 55,438 | 26,398 | 49,657 |
^*^ Restated, refer to note 41.
65
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 34 | Financial Instruments and risk management |
|---|
The Group has exposure to the following risks from its use of financial instruments:
| • | Credit risk; |
|---|---|
| • | Liquidity risk; |
| --- | --- |
| • | Market risk |
| --- | --- |
This note present information about the Group’s exposure to each of the above risks and the Group’s objectives, policies and processes for measuring and managing risk. Further quantitative disclosures are included throughout these consolidated financial statements. The Group is exposed in varying degrees to a variety of financial instrument related risks by virtue of its activities. The overall financial risk management program focuses on the preservation of capital and protecting current and future Group assets and cash flows by reducing exposure to risks posed by the uncertainties and volatilities of financial markets.
The Board of Directors has the responsibility to ensure that an adequate financial risk management policy is established and to approve the policy. The Group’s Audit Committee oversees management’s compliance with the Group’s financial risk management policy.
Gold price hedges were entered into to manage the possible effect of gold price fluctuations. The derivative financial instruments were entered into by the Company for economic hedging purposes and not as a speculative investment. The fair value of the Group’s financial instruments approximates their carrying value due to the short period to maturity.
The types of risk exposure and the way in which such exposures are managed are described below:
| 34.1 | Credit risk |
|---|
Exposure to credit risk
Credit risk includes the risk of a financial loss to the Group if a Bank had to default or a gold sales customer failing to meet its contractual obligation.
The carrying amount of financial assets as disclosed in the statements of financial position and related notes represents the maximum credit exposure. The maximum exposure to credit risk for cash and cash equivalents (excluding overdrafts) and trade and other receivables at the reporting date by geographic region was:
| Cash and cash equivalents | Trade receivables | |||||||
|---|---|---|---|---|---|---|---|---|
| Carrying Amount | 2024 | 2023 | 2024 | 2023 | ||||
| Zimbabwe | **** | 2,592 | 3,989 | **** | 324 | 4,215 | ||
| Jersey, Channel Islands | **** | 42 | 818 | – | – | |||
| Other regions | **** | 1,626 | 1,901 | **** | 4,187 | 1,618 | ||
| **** | 4,260 | 6,708 | **** | 4,511 | 5,833 |
Of the trade receivables balance at the end of the year, $3,873 (2023: $3,110) is due from AEG and $Nil (2023: $Nil) from Stonex Financial Limited, the Group’s largest customers. Apart from this, the Group does not have significant credit risk exposure to any single counterparty.
66
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 34 | Financial Instruments and risk management (continued) |
|---|---|
| 34.2 | Liquidity risk |
| --- | --- |
Liquidity risk is the risk that the Group does not have sufficient financial resources available to meet its obligations as they fall due. The Group manages its liquidity risk by ensuring sufficient cash availability to meet its likely cash requirements, after taking into account cash flows from operations and the Group’s holdings of cash and cash equivalents. The Group believes that these sources will be sufficient to cover the anticipated cash requirements. Senior management is also actively involved in the reviewing and approving of planned expenditures by regularly monitoring cash flows from operations and anticipated investing and financing activities.
The following are the contractual maturities of financial liabilities, including contractual interest payments.
Non-derivative financial liabilities
| December 31, 2024 | Carrying | Contractual cashflows | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| **** | amount | Total | 12 months or less | Within 2 years | Within 3 to 4 years | |||||
| Trade and other payables | **** | 13,714 | **** | 13,714 | **** | 13,714 | – | – | ||
| Loan note payable | **** | 9,168 | **** | 10,473 | **** | 855 | **** | 7,522 | **** | 2,096 |
| Lease liabilities | **** | 294 | **** | 355 | **** | 121 | **** | 82 | **** | 152 |
| Loans and borrowings | **** | 2,674 | **** | 3,118 | **** | 1,464 | **** | 1,323 | **** | 331 |
| Overdrafts | **** | 12,928 | **** | 12,928 | **** | 12,928 | – | – | ||
| **** | 38,778 | **** | 40,588 | **** | 29,082 | **** | 8,927 | **** | 2,579 | |
| December 31, 2023 | Carrying | Contractual cashflows | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| amount | Total | 12 months or less | Within 2 years | Within 3 to 4 years | ||||||
| Trade and other payables | 10,977 | 10,977 | 10,977 | – | – | |||||
| Loan note payable | 7,112 | 8,663 | 665 | 665 | 7,333 | |||||
| Lease liabilities | 208 | 217 | 175 | 42 | – | |||||
| Overdrafts | 17,740 | 17,740 | 17,740 | – | – | |||||
| 36,037 | 37,597 | 29,557 | 707 | 7,333 |
The Group regularly monitors its liquidity risk and evaluates the options available to manage liquidity risk.
Sensitivity analysis
A reasonably possible strengthening (weakening) of the realised gold price, as per note 7, will have an impact on the reported revenue of the Group and the fair value of the put options at December 31, 2024. This would have affected the measurement of financial instruments by the amounts as indicated below. This analysis assumes that all other variables remain constant.
67
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 34 | Financial Instruments and risk management (continued) |
|---|---|
| 34.2 | Liquidity risk (continued) |
| --- | --- |
Sensitivity analysis (continued)
An increase or decrease of 5% of the gold price would have the following equal or opposite effect on the derivative financial instruments on December 31:
Consolidated statement of financial position:
| 2024 | 2023 | |||
|---|---|---|---|---|
| Derivative financial assets - Put option | ||||
| Increase by 5% of the gold price | – | – | ||
| Decrease by 5% of the gold price | – | 4 |
Consolidated statement of profit or loss and other comprehensive income:
| Fair value loss on derivative financial instruments | 2024 | 2023 | ||
|---|---|---|---|---|
| Derivative financial assets - Put option | ||||
| Increase by 5% of the gold price | – | – | ||
| Decrease by 5% of the gold price | – | 4 | ||
| 34.3 | Market risk | |||
| --- | --- | |||
| 34.3.1 | Currency risk | |||
| --- | --- |
The Group is exposed to currency risk on inter-company sales and purchases that are denominated in a currency other than the respective functional currencies of Group entities. The Group does not use financial instruments to hedge its exposure to currency risk. To reduce exposure to currency transaction risk, the Group regularly reviews the currency (i.e. ZiG, RTGS$ (before April 5, 2024) or foreign currency) in which it spends its cash to identify and avoid specific expenditures in currencies that experience inflationary pressures. The Group aims to maintain cash and cash equivalents in US Dollars to manage foreign exchange exposure.
The fluctuation of the US Dollar in relation to other currencies that entities within the Group may transact in will consequently have an effect upon the profitability of the Group and may also effect the value of the Group’s assets and liabilities. As noted below, the Group has certain financial assets and liabilities denominated in currencies other than the functional currency of the Company. To reduce exposure to currency transaction risk, the Group regularly reviews the currency in which it spends its cash to identify and avoid specific expenditures in currencies that experience inflationary pressures. Further, the Group aims to maintain cash and cash equivalents in US Dollars to avoid foreign exchange exposure and to meet short‐term liquidity requirements.
68
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 34 | Financial Instruments and risk management (continued) |
|---|---|
| 34.3 | Market risk (continued) |
| --- | --- |
| 34.3.1 | Currency risk (continued) |
| --- | --- |
Sensitivity analysis
As a result of the Group’s monetary assets and liabilities denominated in foreign currencies which are different to the functional currency of the underlying entities, the profit or loss and equity in the underlying entities could be affected by movements between the functional currency and the foreign currency. The table below indicates consolidated monetary assets/(liabilities) in the Group that have a different functional currency and foreign currency compared to the functional currency.
| 2023 | |||||
|---|---|---|---|---|---|
| '000 | |||||
| Functional currency | |||||
| ZAR | |||||
| Cash and cash equivalents | 1,729 | 4,706 | |||
| denominated | – | – | |||
| ZAR denominated | 1,477 | 989 | |||
| ZiG denominated | 252 | – | |||
| RTGS denominated | – | 3,424 | |||
| denominated | – | 293 | |||
| CAD denominated | – | – | |||
| Trade and other receivables - ZiG denominated | 3,873 | – | |||
| Trade and other payables - ZiG denominated | (76 | ) | – | ||
| Trade and other receivables - RTGS denominated | – | 3,118 | |||
| Trade and other payables - RTGS denominated | – | (106 | ) | ||
| 5,526 | 7,718 |
All values are in US Dollars.
A reasonably possible strengthening or weakening of 5% of the various functional currencies against the foreign currencies would have the following equal or opposite effect on profit or loss and equity for the Group:
| 2024 | 2023 | |||||
|---|---|---|---|---|---|---|
| '000 | '000 | |||||
| Functional currency | Functional currency | |||||
| ZAR | ZAR | |||||
| Cash and cash equivalents | 12 | 177 | ||||
| Trade and other receivables | 184 | 148 | ||||
| Trade and other payables | (4 | ) | (5 | ) | ||
| 192 | 320 |
All values are in US Dollars.
69
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 34 | Financial Instruments and risk management (continued) |
|---|---|
| 34.3 | Market risk (continued) |
| --- | --- |
| 34.3.2 | Interest rate risk |
| --- | --- |
The Group's interest rate risk arises from loans and borrowings, overdraft facility, short term loans and cash held. The loans and borrowings, overdraft facility and cash held have variable interest rates. Variable rates expose the Group to cash flow interest rate risk.
The Group’s assets and liabilities exposed to interest rate fluctuations as at year end is summarised as follows:
| 2024 | 2023 | |||||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | **** | 4,260 | 6,708 | |||
| Loans and borrowings | **** | (2,674 | ) | – | ||
| Overdrafts | **** | (12,928 | ) | (17,740 | ) | |
| **** | (11,342 | ) | (11,032 | ) |
Interest rate risk arising from borrowings is offset by interest from available cash and cash equivalents. The table below summarises the effect of a change in finance cost on the Group’s profit or loss and equity, had the rates charged differed. Loans and borrowings are at a fixed interest rate.
| Sensitivity analysis - Cash and cash equivalents | 2024 | 2023 | ||||
|---|---|---|---|---|---|---|
| Increase by 100 basis points | **** | 43 | 67 | |||
| Decrease by 100 basis points | **** | (43 | ) | (67 | ) | |
| Sensitivity analysis - Loans and borrowings | ||||||
| Increase by 100 basis points | **** | 27 | – | |||
| Decrease by 100 basis points | **** | (27 | ) | – | ||
| Sensitivity analysis - Overdraft | ||||||
| Increase by 100 basis points | **** | 129 | 177 | |||
| Decrease by 100 basis points | **** | (129 | ) | (177 | ) |
70
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 35 | Dividends | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | |||||||
| --- | --- | --- | --- | --- | --- | --- | |||
| Dividends declared to owners of the Company | **** | 10,752 | 8,752 | 8,975 | |||||
| Dividends declared to NCI | **** | 3,024 | 1,512 | 1,814 | |||||
| **** | 13,776 | 10,264 | 10,789 | ||||||
| Dividends declared and paid to owners of the Company | **** | 10,752 | 8,752 | 7,178 | |||||
| Dividends declared and paid to NCI | **** | 1,550 | 550 | 1,728 | |||||
| Dividends declared and due to owners of the Company | – | – | 1,797 | ||||||
| Dividends declared and due to NCI | **** | 2,522 | 1,048 | 86 | |||||
| **** | 14,824 | 10,350 | 10,789 | ||||||
| Dividends Paid | 2024 | 2023 | 2022 | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Opening balance dividends due | **** | 1,048 | 1,883 | – | |||||
| Dividends declared | **** | 13,776 | 10,264 | 10,789 | |||||
| Closing balance dividends due | **** | (2,522 | ) | (1,048 | ) | (1,883 | ) | ||
| **** | 12,302 | 11,099 | 8,906 |
Quarterly dividend per share history:
| Declaration date | cents per share | |
|---|---|---|
| January 13, 2022 | 14.0 | |
| April 18, 2022 | 14.0 | |
| July 14, 2022 | 14.0 | |
| October 13, 2022 | 14.0 | |
| December 30, 2022 | 14.0 | |
| April 3, 2023 | 14.0 | |
| June 29, 2023 | 14.0 | |
| September 28, 2023 | 14.0 | |
| January 2, 2024 | 14.0 | |
| March 27, 2024 | 14.0 | |
| July 1, 2024 | 14.0 | |
| November 11, 2024 | 14.0 | |
| March 24, 2025 | 14.0 | |
| 36 | Contingencies | |
| --- | --- |
The Group may be subject to various claims that arise in the normal course of business. Management believes there are no contingent liabilities to report.
71
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 37 | Related parties |
|---|
Directors of the company, as well as certain executives, are considered key management. For entities within the Group refer to note 38.
Employee contracts between CMSA, CHZ, the Company, key management and certain employees include an option for respective employees to terminate such employee contracts in certain events following a change in control of the Company and to receive a severance payment equal to six months’ to two years’ compensation. If this was triggered as at December 31, 2024 the severance payment would have amounted to $7,227 (2023: $7,809, 2022: $8,575). A change in control would constitute:
| • | the acquisition of more than 50% of the shares; or |
|---|---|
| • | the acquisition of the right to exercise the majority of the voting rights of shares; or |
| --- | --- |
| • | the acquisition of the right to appoint the majority of the board of directors; or |
| --- | --- |
| • | the acquisition of more than 50% of the assets of the Group. |
| --- | --- |
The Company may terminate the employee's employment, whether such termination is with or without required notice, for any reason recognised in law as sufficient. If this was triggered as at December 31, 2024 the severance payment would have amounted to $4,909 (2023: $6,879, 2022: $7,356) for all employees included in the above termination event of a change in control of the Company.
Key management personnel and director transactions:
A number of related parties transacted with the Group in the reporting period. The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows:
| 2024 | 2023 | 2022 | ||||
|---|---|---|---|---|---|---|
| Key management salaries | **** | 2,915 | 3,102 | 2,076 | ||
| Share-based awards^*^ ^@^ | **** | 1,157 | 720 | 999 | ||
| All other compensation ^&^ | **** | 2,396 | 2,599 | 1,697 | ||
| **** | 6,468 | 6,421 | 4,772 | |||
| ^*^ | Amount inclusive of $110 (2023: $104, 2022: $354) classified as production costs. | |||||
| --- | --- | |||||
| ^@^ | Employees, officers, directors, consultants and other service providers also participate in the OEICP (see note 12). | |||||
| ^&^ | The Company entered into a consultancy agreement with Mr. Curtis, a former director of the Company and the former Chief Executive Officer, effective July 1, 2022 to December 31, 2023 with a monthly fee of $44.1 for the period July 1, 2022 until December 31, 2022 and $12.5 for the period January 1, 2023, until December 31, 2025. During the Year, the Company expensed $150 (2023: $150, 2022: $265) in advisory service fees with respect to this consultancy agreement. Mr. Curtis retired as a director in May 2024. | |||||
| Included is an amount of $818 (2023: $647, 2022: $1,378) that relates to bonuses provided for in 2024. | ||||||
| Included is an amount of $1,169 (2023: $1,588 (severance package), 2022: $54 (leave payout)) that relates to provision of a retirement package and a leave payout paid in 2025. |
72
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 37 | Related parties (continued) |
|---|
$30 (2023: $30, 2022: $Nil) rent was paid to a company of which V. Gapare is a director and that supplied office accommodation in Harare, Zimbabwe.
Group entities are set out in note 38.
Refer to note 5 and note 28 for transactions with NCI.
Refer to note 38 for management fees between CMSA and Blanket Mine.
Refer to note 31 for details of the bonds and the Loan notes which were guaranteed by the Company and by Greenstone Management Services Holdings (UK) Limited respectively.
Refer to note 10 for director fees.
All related party transactions occurred at arm’s length.
| 38 | Group entities |
|---|
Intercompany balances with holding company
| Activity of the company | Functional currency | Country of incorporation | Legal shareholding | Intercompany balances<br><br> <br>with holding company | |||
|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | ||||
| Caledonia Holdings Zimbabwe (Private) Limited | Services | $ | Zimbabwe | 100 | 100 | (5,699) | (6,179) |
| Caledonia Mining Services (Private) Limited | Solar power provider | $ | Zimbabwe | 100 | 100 | 4,403 | 10,559 |
| Fintona Investments Proprietary Limited | Dormant | ZAR | South Africa | 100 | 100 | 14,860 | 14,860 |
| Caledonia Mining South Africa Proprietary Limited | Procurement and services | ZAR | South Africa | 100 | 100 | (8,006) | (8,700) |
| Greenstone Management Services Holdings Limited | Investment holding | $ | United Kingdom | 100 | 100 | (34,437) | (48,149) |
| Blanket Mine (1983) (Private) Limited ^(2)^ | Mining | $ | Zimbabwe | 64 | 64 | (2,867) | (217) |
| Blanket Employee Trust Services (Private) Limited ("BETS") ^(1)^ | Employee trust | $ | Zimbabwe | – | – | – | – |
| Motapa Mining Company UK Limited | Investment holding | $ | United Kingdom | 100 | 100 | 1 | – |
| Arraskar Investments (Private) Limited | Exploration | $ | Zimbabwe | 100 | 100 | – | – |
| Bilboes Gold Limited | Investment holding | $ | Mauritius | 100 | 100 | 40 | – |
| Bilboes Holdings (Private) Limited | Gold project | $ | United Kingdom | 100 | 100 | 831 | 805 |
| Caledonia Mining FZCO | Procurement | $ | Dubai | 100 | 100 | 436 | 61 |
73
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 38 | Group entities (continued) |
|---|
Intercompany balances with holding company (continued)
| Activity of the company | Functional currency | Country of incorporation | Legal shareholding | Intercompany balances<br><br> <br>with holding company | |||
|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | ||||
| Caledonia (Connemara) (Private) Limited | Dormant | $ | Zimbabwe | 100 | 100 | – | – |
| Caledonia (Maligreen) (Private) Limited | Dormant | $ | Zimbabwe | 100 | 100 | – | – |
| Caledonia (Bilboes & Motapa) (Private) Limited | Dormant | $ | Zimbabwe | 100 | 100 | – | – |
^(1)^ BETS and the Community Trust are consolidated as structured entities.
^(2)^ Refer to note 5 for the effective shareholding. NCI has a 13.2% (2023: 13.2%, 2022: 13.2%) interest in cash flows of Blanket only.
Intercompany transactions with holding company
| Loans advanced/ (repaid) | Interest received | Foreign exchange profits | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Caledonia Holdings Zimbabwe (Private) Limited | **** | (26 | ) | (4 | ) | **** | 506 | 508 | – | – | ||||||
| Caledonia Mining Services (Private) Limited | **** | (6,536 | ) | 10,016 | **** | 380 | 543 | – | – | |||||||
| Caledonia Mining South Africa Proprietary Limited | **** | 1,039 | (3,591 | ) | **** | (559 | ) | (455 | ) | **** | 214 | 675 | ||||
| Greenstone Management Services Holdings Limited | **** | 15,356 | (9,103 | ) | **** | (1,644 | ) | (2,449 | ) | – | – | |||||
| Blanket Mine (1983) (Private) Limited | **** | (2,623 | ) | (760 | ) | **** | (27 | ) | (18 | ) | – | – | ||||
| Motapa Mining Company UK Limited | **** | 1 | – | – | – | – | – | |||||||||
| Bilboes Gold Limited | **** | 40 | – | – | – | – | – | |||||||||
| Bilboes Holdings (Private) Limited | **** | 23 | 805 | **** | 3 | – | – | – | ||||||||
| Caledonia Mining FZCO | **** | 375 | 61 | – | – | – | – | |||||||||
| **** | 7,649 | (2,576 | ) | **** | (1,341 | ) | (1,871 | ) | **** | 214 | 675 |
74
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 39 | Operating segments |
|---|
The Group's operating segments have been identified based on geographic areas. The strategic business units are managed separately because they require different technology and marketing strategies. For each of the strategic business units, the Group’s CEO reviews internal management reports on at least a quarterly basis. Blanket Mine, Bilboes oxide mine, exploration and evaluation assets (“E&E projects”) and South Africa describe the Group's reportable segments. The Blanket operating segment comprises Caledonia Holdings Zimbabwe (Private) Limited, Blanket Mine (1983) (Private) Limited, Blanket’s satellite projects and Caledonia Mining Services (Private) Limited (“CMS solar”). The Bilboes oxide mine segment comprises the oxide mining activities. The E&E projects segment includes the exploration and evaluation activities of the Bilboes sulphide project as well as the Motapa and Maligreen projects. The South African segment represents the sales made by Caledonia Mining South Africa Proprietary Limited to the Blanket Mine. The holding company (Caledonia Mining Corporation Plc) and Greenstone Management Services Holdings Limited (a UK company) are responsible for corporate administrative functions within the Group and contribute to the strategic decision making process of the CEO and are therefore included in the disclosure below and combined with corporate and other reconciling amounts that do not represent a separate segment. Information regarding the results of each reportable segment is included below.
Performance is measured based on profit before income tax, as included in the internal management report that is reviewed by the Group's CEO. Segment profit or exploration and evaluation cost is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. The accounting policies of the reportable segments are the same as the Group’s accounting policies.
75
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 39 | Operating segments (continued) |
|---|
Information about reportable segments
| For the twelve months ended December 31, 2024 | Blanket | South Africa | Bilboes oxide mine | E&E projects | Inter-group eliminations adjustments | Corporate and other reconciling amounts | Total | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | **** | 179,369 | – | **** | 3,649 | – | – | – | **** | 183,018 | |||||||||||
| Inter-segmental revenue | – | **** | 19,296 | – | – | **** | (19,296 | ) | – | – | |||||||||||
| Royalty | **** | (9,081 | ) | – | **** | (182 | ) | – | – | – | **** | (9,263 | ) | ||||||||
| Production costs | **** | (77,245 | ) | **** | (17,579 | ) | **** | (3,386 | ) | – | **** | 17,493 | **** | (27 | ) | **** | (80,744 | ) | |||
| Depreciation | **** | (16,906 | ) | **** | (152 | ) | – | – | **** | 1,081 | **** | (44 | ) | **** | (16,021 | ) | |||||
| Other income | **** | 232 | **** | 1 | **** | 656 | – | **** | (29 | ) | **** | 230 | **** | 1,090 | |||||||
| Other expenses^*^ | **** | (6,750 | ) | – | **** | (190 | ) | – | – | – | **** | (6,940 | ) | ||||||||
| Administrative expenses | **** | (1,602 | ) | **** | (3,374 | ) | **** | (109 | ) | **** | (10 | ) | **** | 35 | **** | (10,598 | ) | **** | (15,658 | ) | |
| Management fee | **** | (2,924 | ) | **** | 2,924 | – | – | – | – | – | |||||||||||
| Cash-settled share-based expense | – | – | – | – | – | **** | (201 | ) | **** | (201 | ) | ||||||||||
| Equity-settled share-based expense | – | – | – | – | – | **** | (1,054 | ) | **** | (1,054 | ) | ||||||||||
| Net foreign exchange (loss) gain | **** | (9,739 | ) | **** | (168 | ) | **** | 24 | – | **** | (23 | ) | **** | 184 | **** | (9,722 | ) | ||||
| Fair value loss on derivative liabilities | – | – | – | – | – | **** | (831 | ) | **** | (831 | ) | ||||||||||
| Finance income | – | **** | 606 | – | – | **** | (2,224 | ) | **** | 1,644 | **** | 26 | |||||||||
| Finance cost | **** | (3,488 | ) | **** | (8 | ) | **** | (411 | ) | **** | (127 | ) | **** | 2,221 | **** | (1,344 | ) | **** | (3,157 | ) | |
| Profit (loss) before tax | **** | 51,866 | **** | 1,546 | **** | 51 | **** | (137 | ) | **** | (742 | ) | **** | (12,041 | ) | **** | 40,543 | ||||
| Tax expense | **** | (16,418 | ) | **** | (517 | ) | – | – | **** | (78 | ) | **** | (476 | ) | **** | (17,489 | ) | ||||
| Profit (loss) after tax | **** | 35,448 | **** | 1,029 | **** | 51 | **** | (137 | ) | **** | (820 | ) | **** | (12,517 | ) | **** | 23,054 | ||||
| * | Other expenses include impairment of plant and equipment of $1,711 for Blanket , as well as $1,973 and $126 retirement benefits for Blanket and Bilboes respectively. | ||||||||||||||||||||
| --- | --- |
76
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 39 | Operating segments (continued) | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As at December 31, 2024 | Blanket | South Africa | Bilboes oxide mine | E&E projects | Inter-group eliminations adjustments | Corporate and other reconciling amounts | Total | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Segment assets: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Current (excluding intercompany, including assets held for sale) | **** | 59,222 | **** | 2,592 | – | **** | 596 | **** | (1,696 | ) | **** | 604 | **** | 61,318 | ||||||
| Non-current (excluding intercompany) | **** | 198,400 | **** | 1,084 | – | **** | 97,308 | **** | (5,644 | ) | **** | (4,102 | ) | **** | 287,046 | |||||
| Assets held for sale (note 24) | **** | 13,512 | – | – | – | – | – | **** | 13,512 | |||||||||||
| Additions on property, plant and equipment (note 18) | **** | 28,570 | **** | 441 | – | – | **** | (1,432 | ) | **** | 2 | **** | 27,581 | |||||||
| Additions on evaluation and exploration assets (note 17) | – | – | – | **** | 4,889 | – | – | **** | 4,889 | |||||||||||
| Intercompany balances | **** | 53,342 | **** | 20,101 | **** | 671 | – | **** | (209,380 | ) | **** | 135,266 | – | |||||||
| Segment liabilities: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Current (excluding intercompany) | **** | (36,507 | ) | **** | (4,032 | ) | – | **** | (1,988 | ) | – | **** | (2,868 | ) | **** | (45,395 | ) | |||
| Non-current (excluding intercompany) | **** | (63,731 | ) | **** | (199 | ) | – | **** | (4,089 | ) | **** | (75 | ) | **** | (411 | ) | **** | (68,505 | ) | |
| Intercompany balances | **** | (16,727 | ) | **** | (38,179 | ) | – | **** | (77,091 | ) | **** | 209,380 | **** | (77,383 | ) | – |
77
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 39 | Operating segments (continued) | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the twelve months ended December 31, 2023 | Blanket | South Africa | Bilboes oxide mine | E&E projects | Inter-group eliminations adjustments | Corporate and other reconciling amounts | Total | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Revenue | 140,615 | – | 5,699 | – | – | – | 146,314 | ||||||||||||||
| Inter-segmental revenue | – | 17,623 | – | – | (17,623 | ) | – | – | |||||||||||||
| Royalty | (7,318 | ) | – | (319 | ) | – | – | – | (7,637 | ) | |||||||||||
| Production costs | (68,923 | ) | (16,788 | ) | (13,095 | ) | – | 16,097 | – | (82,709 | ) | ||||||||||
| Depreciation | (15,385 | ) | (139 | ) | – | – | 1,079 | (41 | ) | (14,486 | ) | ||||||||||
| Other income | 236 | 10 | 1 | – | (1,750 | ) | 1,766 | 263 | |||||||||||||
| Other expenses^*^ | (4,353 | ) | – | (14 | ) | – | – | – | (4,367 | ) | |||||||||||
| Administrative expenses | (912 | ) | (4,301 | ) | (2,101 | ) | (8 | ) | 17 | (10,124 | ) | (17,429 | ) | ||||||||
| Management fee | (3,468 | ) | 3,471 | – | – | (3 | ) | – | – | ||||||||||||
| Cash-settled share-based expense | – | – | – | – | 660 | (1,123 | ) | (463 | ) | ||||||||||||
| Equity-settled share-based expense | – | – | – | – | – | (640 | ) | (640 | ) | ||||||||||||
| Net foreign exchange (loss) gain | ^#^(7,451) | (144 | ) | 97 | – | (71 | ) | 797 | ^#^(6,772) | ||||||||||||
| Fair value loss on derivative liabilities | – | – | – | – | – | (1,119 | ) | (1,119 | ) | ||||||||||||
| Finance income | – | 39 | – | – | – | – | 39 | ||||||||||||||
| Finance cost | (3,323 | ) | 448 | (189 | ) | (22 | ) | (2 | ) | 64 | (3,024 | ) | |||||||||
| Profit (loss) before tax | ^#^29,718 | 219 | (9,921 | ) | (30 | ) | (1,596 | ) | (10,420 | ) | ^#^7,970 | ||||||||||
| Tax expense | (12,256 | ) | (235 | ) | – | – | (19 | ) | (300 | ) | (12,810 | ) | |||||||||
| Profit (loss) after tax | ^#^17,462 | (16 | ) | (9,921 | ) | (30 | ) | (1,615 | ) | (10,720 | ) | ^#^(4,840) | |||||||||
| * | Other expenses include impairment of plant and equipment of $26 for Blanket and $851 for the Bilboes oxide mine, as well as impairment of the solar VAT and duty receivable amounting to $720 for Blanket. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| # | Restated, refer to note 41. |
78
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 39 | Operating segments (continued) | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As at December 31, 2023 | Zimbabwe | South Africa | Bilboes oxide<br><br> <br>mine | E&E projects | Inter-group eliminations adjustments | Corporate and other reconciling amounts | Total | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Segment assets: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Current (excluding intercompany) | 51,236 | 2,363 | – | 401 | (1,757 | ) | 1,986 | 54,229 | |||||||||||||
| Non-current (excluding intercompany) | 188,426 | 697 | – | 92,664 | (5,294 | ) | (2,419 | ) | 274,074 | ||||||||||||
| Assets held for sale | 13,519 | – | – | – | – | – | 13,519 | ||||||||||||||
| Additions on property, plant and equipment (note 18) | 43,496 | 120 | – | – | (2,570 | ) | (11,440 | ) | 29,606 | ||||||||||||
| Additions on evaluation and exploration assets (note 17) | – | – | – | 76,693 | – | – | 76,693 | ||||||||||||||
| Intercompany balances | 44,452 | 16,844 | (214 | ) | – | (145,523 | ) | 84,441 | – | ||||||||||||
| – | |||||||||||||||||||||
| Segment liabilities: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Current (excluding intercompany) | (31,747 | ) | (4,421 | ) | – | (1,755 | ) | – | (2,210 | ) | (40,133 | ) | |||||||||
| Non-current (excluding intercompany) | *(57,626 | ) | – | – | (5,932 | ) | 4 | (416 | ) | *(63,970 | ) | ||||||||||
| Intercompany balances | (24,412 | ) | (34,193 | ) | – | (5,691 | ) | 145,523 | (81,227 | ) | – |
^*^ Restated, refer to note 41.
| For the twelve months ended December 31, 2022 | Blanket | South Africa | Inter-group eliminations adjustments | Corporate and other reconciling amounts | Total | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 142,082 | – | – | – | 142,082 | ||||||||||
| Inter-segmental revenue | – | 19,885 | (19,885 | ) | – | – | |||||||||
| Royalty | (7,124 | ) | – | – | – | (7,124 | ) | ||||||||
| Production costs | (62,701 | ) | (18,883 | ) | 18,586 | – | (62,998 | ) | |||||||
| Depreciation | (10,735 | ) | (153 | ) | 789 | (42 | ) | (10,141 | ) | ||||||
| Other income | 48 | 12 | – | – | 60 | ||||||||||
| Other expenses^*^ | (11,289 | ) | (66 | ) | – | (427 | ) | (11,782 | ) | ||||||
| Administrative expenses | (172 | ) | (3,047 | ) | – | (8,722 | ) | (11,941 | ) | ||||||
| Management fee | (3,454 | ) | 3,454 | – | – | – | |||||||||
| Cash-settled share-based expense | – | – | 853 | (1,462 | ) | (609 | ) | ||||||||
| Equity-settled share-based expense | – | – | – | (484 | ) | (484 | ) | ||||||||
| Net foreign exchange gain (loss) | ^#^(5,673) | (119 | ) | (291 | ) | 406 | ^#^(5,677) | ||||||||
| Fair value loss on derivative liabilities | – | – | – | (1,198 | ) | (1,198 | ) | ||||||||
| Finance income | – | 17 | – | – | 17 | ||||||||||
| Finance cost | (861 | ) | (25 | ) | – | 229 | (657 | ) | |||||||
| Profit (loss) before tax | ^#^40,121 | 1,075 | 52 | (11,700 | ) | ^#^29,548 | |||||||||
| Tax expense | ^#^(13,374) | (252 | ) | 117 | (850 | ) | ^#^(14,359) | ||||||||
| Profit (loss) after tax | ^#^26,747 | 823 | 169 | (12,550 | ) | ^#^15,189 | |||||||||
| * | Other expenses include impairment of plant and equipment of $8,209 for Blanket, as well as impairment of Connemara North of $720. | ||||||||||||||
| --- | --- | ||||||||||||||
| # | Restated, refer to note 41. |
79
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 39 | Operating segments (continued) | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As at January 1, 2023 | Zimbabwe | South Africa | E&E projects | Inter-group eliminations adjustments | Corporate and other reconciling amounts | Total | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Segment assets: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Current (excluding intercompany) | 33,130 | 1,448 | – | (83 | ) | 3,932 | 38,427 | ||||||||||
| Non-current (excluding intercompany) | 176,356 | 822 | 5,626 | (5,446 | ) | 19,406 | 196,764 | ||||||||||
| Additions on property, plant and equipment | 38,763 | (881 | ) | 872 | (1,355 | ) | 10,821 | 48,220 | |||||||||
| Additions on evaluation and exploration assets | 7,964 | – | 1,430 | – | 4 | 9,398 | |||||||||||
| Intercompany balances | 33,468 | 12,202 | – | (107,227 | ) | 61,557 | – | ||||||||||
| Segment liabilities: | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Current (excluding intercompany) | (17,451 | ) | (1,901 | ) | – | – | (13,089 | ) | (32,441 | ) | |||||||
| Non-current (excluding intercompany) | *(43,967 | ) | (101 | ) | – | 116 | (1,109 | ) | *(45,061 | ) | |||||||
| Intercompany balances | (12,725 | ) | (34,753 | ) | – | 107,227 | (59,749 | ) | – |
* Restated, refer to note 41.
Major customer
Revenues from Fidelity amounted to $47,974 (2023: $66,177; 2022: $142,082) for the twelve months ended December 31, 2024 representing 23,567 ounces (2023: 35,415 ounces, 2022: 80,094 ounces).
The Group has made $111,946 (2023: $80,137, 2022: $Nil) of sales to AEG and $23,098 (2023: $Nil, 2022: $Nil) to Stonex Financial Limited up to December 31, 2024, representing 45,505 ounces (2023: 41,117 ounces, 2022: Nil ounces) and 8,845 ounces (2023: Nil ounces, 2022: Nil ounces) respectively. Management believes this new sales mechanism reduces the risk associated with selling and receiving payment from a single refining source in Zimbabwe. It also creates the opportunity to use more competitive offshore refiners and it may allow for the Company to raise debt funding secured against offshore gold sales.
| 40 | Defined Contribution Plan |
|---|
Under the terms of the Mining Industry Pension Fund (“Fund”) in Zimbabwe, eligible employees contribute a fixed percentage of their eligible earnings to the Fund. Blanket Mine makes a matching contribution plus an inflation levy as a fixed percentage of eligible earnings of these employees. The total contribution by Blanket Mine for the year ended December 31, 2024 was $1,179 (2023: $1,290, 2022: $1,022).
80
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 41 | Prior year error – restatement of comparative information |
|---|
In preparation of the consolidated financial statements for the year ended December 31, 2024, an error was identified in the accounting interpretation related to the calculation of deferred tax liabilities at Blanket. The non-cash restatement does not affect income tax calculations or submissions.
In October 2018, the RTGS$ was introduced in Zimbabwe at 1:1 to the USD. The RTGS$ was deemed the only legal tender in Zimbabwe, and all liabilities held previously were to be denominated in RTGS$. In 2019, Practice Note 26 (as described in note 3.1.5) required all income tax returns to be calculated in RTGS$ for transactions occurring prior to introducing the multi-currency regime in 2023.
Blanket’s deferred tax liabilities were incorrectly calculated in RTGS$ and accounted for as a monetary item where RTGS$ deferred tax temporary differences were translated to the USD functional currency. Gains related to the devaluation of the deferred tax liabilities were realised in profit or loss. Transactions from 2019 to 2022 affected the deferred tax liability calculation and continued to be denominated in RTGS$ in accordance with the legislated tax regime after the multi-currency regime was introduced. The accounting for the deferred tax liabilities in RTGS$ with the translation to USD remained consistent in all previous consolidated financial statements, yet the carrying value of the deferred tax liabilities should have been denominated in USD rather than RTGS$. The error, stemming from January 1, 2019, was corrected from the earliest period presented in these consolidated financial statements, as presented in the table below.
Consolidated statements of profit or loss and other comprehensive income
| For the years ended | December 31, 2022 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Adjustment | As restated | As previously reported | Adjustment | As restated | |||||||||||||
| Net foreign exchange (loss) profit | (2,550 | ) | (4,222 | ) | (6,772 | ) | 4,411 | (10,088 | ) | (5,677 | ) | ||||||
| Tax expense | (12,810 | ) | – | (12,810 | ) | (16,770 | ) | 2,411 | (14,359 | ) | |||||||
| (Loss) profit for the year | (618 | ) | (4,222 | ) | (4,840 | ) | 22,866 | (7,677 | ) | 15,189 | |||||||
| Total comprehensive income for the year | (1,240 | ) | (4,222 | ) | (5,462 | ) | 22,404 | (7,677 | ) | 14,727 | |||||||
| Non-controlling interests | 3,580 | (558 | ) | 3,022 | 4,963 | (1,013 | ) | 3,950 | |||||||||
| Basic (loss) earnings per share () | (0.24 | ) | (0.20 | ) | (0.44 | ) | 1.36 | (0.51 | ) | 0.85 | |||||||
| Diluted (loss) earnings per share () | (0.24 | ) | (0.20 | ) | (0.44 | ) | 1.35 | (0.50 | ) | 0.85 |
All values are in US Dollars.
81
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
| 41 | Prior year error – restatement of comparative (continued) |
|---|
Consolidated statements of financial position
| As at | December 31, 2023 | January 1, 2023 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As previously reported | Adjustment | As restated | As previously reported | Adjustment | As restated | |||||||||
| Retained loss | 63,172 | 33,971 | 97,143 | 50,222 | 30,307 | 80,529 | ||||||||
| Non-controlling interests | 24,477 | (6,021 | ) | 18,456 | 22,409 | (5,463 | ) | 16,946 | ||||||
| Deferred tax liabilities | 6,131 | 39,992 | 46,123 | 5,123 | 35,770 | 40,893 |
Further information on the material weakness identified as a result of the error is disclosed in section 11 of the MD&A.
| 42 | Subsequent events |
|---|
There were no significant subsequent events between December 31, 2024 and the date of issue of these financial statements other than included in the preceding notes to the consolidated financial statements.
| 43 | Going concern |
|---|
The directors have, at the time of approving these consolidated financial statements, a reasonable expectation that Caledonia has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing these consolidated financial statements.
82
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
DIRECTORS AND OFFICERS at March 31, 2025
| BOARD OF DIRECTORS | OFFICERS |
|---|---|
| J. L. Kelly (2) (3) (5) (7) | M. Learmonth (4) (5) (6) (7) |
| Non-executive Director | Chief Executive Officer |
| Connecticut, United States of America | Jersey, Channel Islands |
| J. Holtzhausen (1) (2) (3) (4) (5) | C.O. Goodburn (5) (6) |
| Chairman Audit Committee | Chief Financial Officer (until March 31, 2025)^*^ |
| Non-executive Director^#^ | Johannesburg, South Africa |
| Cape Town, South Africa | |
| A. Chester (6) (7) | |
| M. Learmonth (4) (5) (6) (7) | General Counsel, Company Secretary and Head of |
| Chief Executive Officer | Risk and Compliance |
| Jersey, Channel Islands | Jersey, Channel Islands |
| N. Clarke (3) (4) (5) (7) | J. Mufara (4) (5) (6) (7) |
| Non-executive Director | Chief Operating Officer |
| Cornwall, United Kingdom | Johannesburg, South Africa |
| G. Wildschutt (1) (3) (5) (7) | BOARD COMMITTEES |
| Non-executive Director | (1) Audit Committee |
| Johannesburg, South Africa | (2) Compensation Committee |
| (3) Nomination and Corporate Governance | |
| G. Wylie (1) (2) (3) (4) (5) | Committee |
| Non-executive Director | (4) Technical Committee |
| Tas-Silema, Malta | (5) Strategic Planning Committee |
| (6) Disclosure Committee | |
| V. Gapare (4) (5) (7) | (7) ESG Committee |
| Executive Director | |
| Harare, Zimbabwe | * Stepped down on March 31, 2025, and succeeded by Ross Jerrard. |
| ^#^ Not putting himself forward for reappointment as a director at the next annual general meeting. in May 2025 | |
| T. Gadzikwa (1) (2) (3) (5) | |
| Non-executive Director | |
| Johannesburg, South Africa | |
| S. Buys (3) (4) (5) (7) | |
| Non-executive Director | |
| Surrey, United Kingdom | |
| L. Goldwasser (1) (2) (3) (5) | |
| Non-executive Director | |
| Florida, United States of America |
83
Caledonia Mining Corporation Plc
Notes to the consolidated financial statements
For the years ended December 31, 2024, 2023 and 2022
(in thousands of United States Dollars, unless indicated otherwise)
CORPORATE DIRECTORY as at March 31, 2025
| CORPORATE OFFICES | BANKER | SOLICITORS | SOLICITORS (CONTINUED) |
|---|---|---|---|
| Jersey | Barclays | Mourant (Jersey) | Hayes Boone (United Kingdom) |
| Head and Registered Office | Level 11 | 22 Grenville Street | 1 New Fetter Lane |
| Caledonia Mining Corporation Plc | 1 Churchill Place | St Helier | London EC4A 1AN |
| B006 Millais House | Canary Wharf | Jersey JE4 8PX | United Kingdom |
| Castle Quay | London E14 5HP | Channel Islands | |
| St Helier | AUDITOR | ||
| Jersey, Channel Islands JE2 3NF | NOMINATED ADVISOR | Borden Ladner Gervais LLP (Canada) | BDO South Africa Incorporated |
| Cavendish Securities PLC | Bay Adelaide Cantre, East Tower | Wanderers Office Park | |
| South Africa | One Bartholomew Close | 22 Adelaide Street West | 52 Corlett Drive |
| Caledonia Mining South Africa Proprietary Limited | London | Suite 3400 | Illovo 2196 |
| No. 1 Quadrum Office Park | EC1A 7BL | Toronto, ON, Canada | South Africa |
| Constantia Boulevard | Tel: +44 20 7220 0500 | M5H 4E3 | Tel: +27(0)10 590 7200 |
| Floracliffe | |||
| South Africa | MEDIA AND INVESTOR RELATIONS | Dorsey & Whitney LLP (US) | |
| Capital Market Communication Limited (“Camarco”) | TD Canada Trust Tower | ||
| Zimbabwe | APCO Worldwide | Brookfield Place | |
| Caledonia Holdings Zimbabwe (Private) Limited | Floor 5, 40 Strand | 161 Bay Street | |
| P.O. Box CY1277 | London WC2N 5RW | Suite 4310 | |
| Causeway, Harare | Tel: +44 20 3757 4980 | Toronto, Ontario | |
| Zimbabwe | M5J 2S1 | ||
| BROKER | Canada | ||
| Capitalisation (March 31, 2025) | Liberum | ||
| Authorised: Unlimited | Ropemaker Place, Level 12 | Gill, Godlonton and Gerrans (Zimbabwe) | |
| 25 Ropemaker Street | Beverley Court | ||
| Shares, Warrants and Options Issued: | London | 100 Nelson Mandela Avenue | |
| Shares: 19,214,554 | EC2Y 9LY | Harare, Zimbabwe | |
| Options: 10,000 | |||
| REGISTRAR AND TRANSFER AGENT | Bowman Gilfillan Inc (South Africa) | ||
| SHARE TRADING SYMBOLS | Computershare | 11 Alice Lane | |
| NYSE American - Symbol “CMCL” | 150 Royall Street, | Sandton | |
| AIM - Symbol “CMCL” | Canton, | Johannesburg | |
| VFEX - Symbol “CMCL” | Massachusetts, 02021 | 2196 | |
| Tel: +1 800 736 3001 or +1 781 575 3100 | South Africa |
84
ex_794864.htm
Exhibit 99.2
| CALEDONIA MINING CORPORATION PLC | March 31, 2025 |
|---|
Management’s Discussion and Analysis
This management’s discussion and analysis (“MD&A”) of the consolidated operating results and financial position of Caledonia Mining Corporation Plc (“Caledonia” or "the Company”) is for the quarter ended December 31, 2024 (“Q4 2024” or the “Quarter”) and for the year ended December 31, 2024 (the “Year”). It should be read in conjunction with the Audited Consolidated Financial Statements of Caledonia for the Year (the “Consolidated Financial Statements”) which are available from SEDAR+ at www.sedarplus.ca or from Caledonia’s website at www.caledoniamining.com . The Consolidated Financial Statements and related notes have been prepared in accordance with International Financial Reporting Accounting Standards as issued by the International Accounting Standards Board (“IFRS”). In this MD&A, the terms “Caledonia”, "the Company”, "the Group”, “we”, “our” and “us” refer to the consolidated operations of Caledonia Mining Corporation Plc and its subsidiaries unless otherwise specifically noted or the context requires otherwise.
Note that all currency references in this document are in US Dollars (also “$”, “US$” or “USD”), unless stated otherwise. The MD&A is focused on material matters.
1
| Table of Contents | |
|---|---|
| 1. OVERVIEW | 3 |
| 2. SUMMARY | 3 |
| 3. SUMMARY FINANCIAL RESULTS | 9 |
| 3.1 Revenue analysis | 10 |
| 3.2 Production, other cost and other income analysis | 11 |
| 3.3 Cash flow analysis | 21 |
| 3.4 Analysis of financial position | 24 |
| 3.5 Supplementary financial information | 25 |
| 4. OPERATIONS | 26 |
| 4.1. Safety, Health and Environment | 26 |
| 4.2. Social Investment and Contribution to the Zimbabwean Economy - Blanket | 28 |
| 4.3. Gold Production - Blanket | 29 |
| 4.4. Capital Projects - Blanket | 31 |
| 4.5. Indigenisation | 32 |
| 4.6. Bilboes | 32 |
| 4.7. Zimbabwe Commercial Environment | 33 |
| 4.8. Solar plant | 36 |
| 4.9. Opportunities and Outlook | 37 |
| 5. EXPLORATION | 39 |
| 6. LIQUIDITY AND CAPITAL RESOURCES | 40 |
| 7. OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL COMMITMENTS AND CONTINGENCIES | 41 |
| 8. ADJUSTED EARNINGS PER SHARE | 42 |
| 9. RELATED PARTY TRANSACTIONS | 43 |
| 10. RESTATEMENT OF COMPARATIVE INFORMATION | 43 |
| 11. INTERNAL CONTROLS OVER FINANCIAL REPORTING | 44 |
| 12. CRITICAL ACCOUNTING ESTIMATES | 45 |
| 13. FINANCIAL INSTRUMENTS | 48 |
| 14. SECURITIES OUTSTANDING | 49 |
| 15. RISK ANALYSIS | 49 |
| 16. FORWARD LOOKING STATEMENTS | 51 |
| 17. QUALIFIED PERSON | 52 |
2
1. OVERVIEW
Caledonia is a Zimbabwean focussed exploration, development, and mining corporation. Caledonia owns a 64% stake in the gold-producing Blanket mine (“Blanket”), and 100% stakes in the Bilboes oxide mine, the Bilboes sulphide project (together with the Bilboes oxide mine "Bilboes") and the Motapa and Maligreen gold mining projects, all situated in Zimbabwe. Caledonia’s shares are listed on the NYSE American LLC (“NYSE American”), depositary interests in Caledonia’s shares are admitted to trading on AIM of the London Stock Exchange plc and depositary receipts in Caledonia’s shares are listed on the Victoria Falls Stock Exchange (“VFEX”) (all under the symbols “CMCL”).
2. SUMMARY
| 3 months ended | 12 months ended | ||||
|---|---|---|---|---|---|
| December 31 | December 31 | Comment | |||
| 2024 | 2023<br><br> <br>^*Restated^ | 2024 | 2023<br><br> <br>^*Restated^ | ||
| Gold produced (oz) | 20,248 | 20,878 | 78,301 | 78,466 | Gold produced in the Quarter was 3.0% lower than the fourth quarter of 2023 (the “comparative” or “comparable quarter” or “Q4 2023”) and was 0.2% lower in the Year than the previous year, mainly due to the Bilboes oxide mine being placed on care and maintenance on September 30, 2023.<br><br> <br>19,841 (Q4 2023: 20,172) ounces of gold were produced at Blanket in the Quarter and 76,656 (2023: 75,416) ounces for the Year.<br><br> <br>407 (Q4 2023: 706) ounces of gold were produced from the Bilboes oxide mine in the Quarter and 1,645 (2023: 3,050) ounces for the Year. |
3
| 3 months ended | 12 months ended | ||||
|---|---|---|---|---|---|
| December 31 | December 31 | Comment | |||
| 2024 | 2023<br><br> <br>^*Restated^ | 2024 | 2023<br><br> <br>^*Restated^ | ||
| On-mine cost per ounce ($/oz)^1^ | 1,177 | 1,092 | 1,073 | 1,097 | On-mine cost per ounce in the Quarter increased by 7.8% compared to the comparable quarter and decreased by 2.2% for the Year compared to the previous year.<br><br> <br>The 7.8% increase in the Quarter against the comparable Quarter was due to higher production costs at Blanket mainly on labour and consumable costs that was partly offset by the reduced Bilboes costs after the oxide mine was placed on care and maintenance from September 30, 2023. The 2.2% year on year decrease is predominantly attributable to the reduced Bilboes costs after the oxide mine was placed on care and maintenance from September 30, 2023. |
| All-in sustaining cost (“AISC”) per ounce^1^ | 1,877 | 1,820 | 1,506 | 1,499 | The AISC per ounce in the Quarter increased by 3.1% and 0.4% for the Year compared to the comparative quarter and year, predominantly due to the higher on-mine cost per ounce for the Quarter and the Year and an increase in sustaining capital expenditure for the Year.<br><br> <br>AISC includes the benefit of the solar plant electricity saving ($49 and $47 per ounce for the Quarter and Year respectively). |
| Average realised gold price ($/oz)^1^ | 2,618 | 1,922 | 2,347 | 1,910 | The average realised gold price reflects international spot prices. |
| Gross profit^2^ ($’000) | 20,929 | 10,556 | 76,990 | 41,482 | Gross profit for the Quarter and Year increased from the comparative quarter and year, predominantly due to the higher gold price and lower production cost related to the Bilboes oxide mine. |
4
| 3 months ended | 12 months ended | ||||
|---|---|---|---|---|---|
| December 31 | December 31 | Comment | |||
| 2024 | 2023<br><br> <br>^*Restated^ | 2024 | 2023<br><br> <br>^*Restated^ | ||
| Net profit (loss) attributable to shareholders ($’000) | 5,865 | (3,402)^*^ | 17,899 | (7,862)^*^ | Net profit attributable to shareholders is higher due to higher gross profit for the Quarter and Year compared to the comparative quarter and year. Lower operating losses were incurred related to the Bilboes oxide mine for the Quarter and Year compared to the comparative quarter and year. |
| Basic IFRS (loss) earnings per share (“EPS”) (cents) | 29.7 | (18.7)^*^ | 91.2 | (43.6)^*^ | Basic IFRS EPS reflects the movement in IFRS profit attributable to shareholders. |
| Adjusted EPS (cents)^1^ | 44.3 | 2.1^*^ | 125.2 | (10.3)^*^ | Adjusted EPS excludes inter alia unrealised intercompany foreign exchange gains and losses, deferred tax and fair value movements on derivative financial instruments. |
| Net cash from operating activities ($’000) | 13,391 | 3,376 | 41,955 | 14,769 | The higher operating profit increased net cash from operating activities in the Quarter and Year compared to the comparative quarter and year. |
| Net cash and cash equivalents ($’000) | (8,668) | (11,032) | (8,668) | (11,032) | Net cash increased due to the higher cash inflow from operating activities in the Quarter and the Year compared to the comparative quarter and year. |
^1^ Non-IFRS measures such as “On-mine cost per ounce”, “AISC”, “average realised gold price” and “adjusted EPS” are used throughout this document. Refer to section 3.2*. of this MD&A for a discussion of non-IFRS measures.*
^2^ Gross profit is after deducting royalties, production costs and depreciation but before administrative expenses, other income, interest and finance charges and taxation.
^* Refer to^^section 10^^and^^section 11^^.^
5
Production at Blanket
Gold production at Blanket for the Quarter was 19,841 ounces and 76,656 ounces for the Year. 207,721 tonnes were hoisted in the Quarter and a record 797,479 tonnes of ore were hoisted in the Year. Lower grade areas were mined in 2024 versus 2023 as was expected in the life of mine plan. Production was within the annual production guidance for Blanket for the year ended December 31, 2024.
Solar plant sale
On September 30, 2024 Caledonia signed a conditional agreement for the sale of the entire issued share capital of its Zimbabwe subsidiary, Caledonia Mining Services (Private) Limited ("CMS"), which owns and operates the 12.2MWac solar plant and supplies power to Blanket Mine. CMS is to be sold to CrossBoundary Energy Holdings ("CBE") for $22.35 million, payable in cash, and the power generation of the solar plant will continue to be sold to Blanket Mine by way of a power purchase agreement.
The solar plant provides approximately 20% of Blanket’s energy requirements and it has significantly reduced the use of expensive diesel-generated power. CBE has been invited to tender for an expansion of the solar plant to deliver further renewable energy to Blanket Mine.
On completion of the transaction, Caledonia will realise a profit of $8 million on the $14.3 million construction cost, which was largely financed by the issue of 597,963 Caledonia shares in the US in 2020 which raised $13 million.
The sale consideration will be reinvested in Caledonia's other projects that are expected to yield a higher return to our shareholders and will have the added benefit of focussing management's attention on our core business of gold mining and exploration.
Bilboes feasibility study
Caledonia has been progressing work on a feasibility study for the Bilboes project, initially due for publication in the first quarter of 2025. While ongoing work confirms the project has attractive economics, several new developments plus higher indicated capital costs have prompted the Company to defer the finalisation of the feasibility study in order to undertake further work to allow for the evaluation of key, and certain new, factors that we expect could positively impact project economics.
Caledonia remains committed to maximising Caledonia’s net present value per share: this means identifying the optimal balance between growth and equity dilution, having regard to an acceptable degree of debt funding.
Exploration at Motapa
Exploration drilling at Motapa has been focussed on three main areas which have historically been commercially mined i.e. Motapa North, Motapa Central and Motapa South. The Motapa North area abuts directly on the southern lease boundary of Bilboes. A fourth area, Mpudzi, where there is no historic evidence of open pit mining, was identified through surface trenching and was followed up with drilling.
At the end of the Quarter, 5,174 metres of reverse circulation and 4,070 metres of diamond drilling had been completed at Motapa, which was the total planned exploration for the Year before the onset of the rainy season.
To date, 7,728 samples from drilling activities have been submitted for analysis and 5,512 assay results have been received. Due to the encouraging results received in terms of strike width, length and grade during 2024 a further $2.8 million has been allocated to exploration activities at Motapa for the 2025 year. With Motapa's location adjacent to Bilboes, significant synergies could be obtained should a viable resource body be identified through the planned exploration program. The exploration results and planned exploration for 2025 are further discussed in section 5.
6
2025 Production and cost guidance
Blanket production guidance for 2025 is 73,500 - 77,500 ounces. This reflects the current mine scheduling, which anticipates that Blanket will continue to mine lower-grade areas with similar grades to 2024 in 2025.
Blanket on-mine cost per ounce is forecast at $1,050 - $1,150 (up from $950 to $1,050 per ounce in 2024), while all-in sustaining cost ("AISC") per ounce is expected to be in the range of $1,690 - $1,790 (up from $1,450 - $1,550 per ounce in 2024). Cost guidance for 2025 reflects higher labour, HR and IT expenses and increased sustaining capital expenditure. Increased expenditure in these areas is part of the ongoing modernisation of the business, building a foundation for the extended operating life at Blanket, growth arising from Bilboes and Motapa, and future profitability through cost reductions. The 2025 on-mine cost per ounce includes $20 per ounce of environmental, social and governance ("ESG") cost; 2024 ESG cost of $1.3 million (approximately $17 per ounce) was not part of the guidance range for 2024.
The 2025 capital expenditure programme totals $41.0 million, with $34.1 million allocated to Blanket and $6.9 million at Bilboes and Motapa. These investments aim to modernise operations and improve mining efficiency at Blanket. While there will be short-term cost pressures, the long-term goal is to reduce costs, improve profitability and operational resilience and extend Blanket's mine life and thereby ensure the continued success of Blanket. All expenditure will be funded from cash generation and cash reserves with no anticipated impact on the dividend. Capital expenditure for 2025 is further discussed in section 4.9.
Change in directors and management
On February 14, 2025 Caledonia announced that Mr Stefan Buys and Ms Lesley Goldwasser joined the Board of Directors as independent non-executive directors. Mr Johan Holtzhausen, who has served on the Board since 2013, is retiring from the Board and as chair of the Audit Committee with effect from the next annual general meeting of shareholders which is due to be held in early May, 2025. On the assumption that she is re-elected to the Board at the annual general meeting, Ms Tariro Gadzikwa, an independent non-executive director, will take over from Mr Holtzhausen as chair of the Audit Committee with effect from the annual general meeting.
On March 31, 2025, Mr Chester Goodburn will step down as Chief Financial Officer and will be replaced by Mr Ross Jerrard.
During the Quarter Mr Admire Makuvaro was appointed as Group Head of Projects. Mr Makuvaro has several decades of experience in constructing large scale mining and metallurgical processing operations; his immediate focus will be on assisting in the development and subsequent construction of the Bilboes sulphide project, but he will also be responsible for other large capital projects in the Group.
During the Quarter the group-wide retirement programme was completed whereby approximately 100 employees who were over the mandatory retirement ages were obliged to take retirement. This resulted in a one-off payment of $2.1 million in the Quarter. Following the implementation of this programme, there was a management restructure at Blanket which has improved short-interval management controls and contributed to the improved mining performance from December 2024.
7
Strategy and Outlook: increased focus on growth opportunities
The immediate strategic focus is to:
| • | maintain production at Blanket at the targeted range of 73,500 - 77,500 ounces for 2025 and at a similar level for 2026, whilst modernising operations and improving mining and operational cost efficiencies; |
|---|---|
| • | engage in further exploration at Blanket with the objective of upgrading existing inferred mineral resources to measured and indicated mineral resources to increase the confidence levels in Blanket’s life of mine and to commence exploration on other target areas on Blanket’s lease area which are outside the current mine footprint; |
| --- | --- |
| • | continue to evaluate development and funding options for the Bilboes sulphide project; and |
| --- | --- |
| • | continue with exploration activities at Motapa with a view to identifying sulphide and oxide resources. Any sulphide resources would eventually be treated as part of the Bilboes sulphide project; oxide resources may create short term, relatively short-life revenue opportunities. |
| --- | --- |
The strategy and outlook of Caledonia is further discussed in section 4.9 of this MD&A.
8
3. SUMMARY FINANCIAL RESULTS
The table below sets out the consolidated profit or loss for the Quarter, the Year and the respective comparative periods prepared under IFRS.
| Condensed Consolidated Statements of profit or loss and Other comprehensive income | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($'000's) | 3 months ended | 12 months ended | |||||||||||||
| December 31 | December 31 | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2022 | |||||||||||
| ^*Restated^ | ^*Restated^ | ^*Restated^ | |||||||||||||
| Revenue | **** | 47,515 | 38,661 | **** | 183,018 | 146,314 | 142,082 | ||||||||
| Royalty | **** | (2,432 | ) | (1,987 | ) | **** | (9,263 | ) | (7,637 | ) | (7,124 | ) | |||
| Production costs | **** | (20,239 | ) | (21,681 | ) | **** | (80,744 | ) | (82,709 | ) | (62,998 | ) | |||
| Depreciation | **** | (3,915 | ) | (4,437 | ) | **** | (16,021 | ) | (14,486 | ) | (10,141 | ) | |||
| Gross profit | **** | 20,929 | 10,556 | **** | 76,990 | 41,482 | 61,819 | ||||||||
| Other income | **** | 725 | 136 | **** | 1,090 | 263 | 60 | ||||||||
| Other expenses | **** | (2,862 | ) | (1,567 | ) | **** | (6,940 | ) | (4,367 | ) | (11,782 | ) | |||
| Administrative expenses | **** | (5,429 | ) | (5,539 | ) | **** | (15,658 | ) | (17,429 | ) | (11,941 | ) | |||
| Cash-settled share-based expense | **** | 278 | (165 | ) | **** | (201 | ) | (463 | ) | (609 | ) | ||||
| Equity-settled share-based expense | **** | (269 | ) | (76 | ) | **** | (1,054 | ) | (640 | ) | (484 | ) | |||
| Net foreign exchange profit (loss) | **** | 474 | (494 | ) | **** | (9,722 | ) | (6,772 | ) | (5,677 | ) | ||||
| Net derivative financial instrument expense | **** | (335 | ) | (529 | ) | **** | (831 | ) | (1,119 | ) | (1,198 | ) | |||
| Operating profit | **** | 13,511 | 2,322 | **** | 43,674 | 10,955 | 30,188 | ||||||||
| Net finance cost | **** | (787 | ) | (653 | ) | **** | (3,131 | ) | (2,985 | ) | (640 | ) | |||
| Profit before tax | **** | 12,724 | 1,669 | **** | 40,543 | 7,970 | 29,548 | ||||||||
| Tax expense | **** | (5,208 | ) | (4,258 | ) | **** | (17,489 | ) | (12,810 | ) | (14,359 | ) | |||
| Profit (loss) for the year | **** | 7,516 | (2,589 | ) | **** | 23,054 | (4,840 | ) | 15,189 | ||||||
| Other comprehensive income | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Items that are or may be reclassified to profit or loss | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Exchange differences on translation of foreign operations | **** | (779 | ) | 156 | **** | (116 | ) | (622 | ) | (462 | ) | ||||
| Total comprehensive income (loss) for the year | **** | 6,737 | (2,433 | ) | **** | 22,938 | (5,462 | ) | 14,727 | ||||||
| Profit (loss) attributable to: | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Owners of the Company | **** | 5,865 | (3,402 | ) | **** | 17,899 | (7,862 | ) | 11,239 | ||||||
| Non-controlling interests | **** | 1,651 | 813 | **** | 5,155 | 3,022 | 3,950 | ||||||||
| Profit (loss) for the year | **** | 7,516 | (2,589 | ) | **** | 23,054 | (4,840 | ) | 15,189 | ||||||
| Total comprehensive income (loss) attributable to: | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Owners of the Company | **** | 5,086 | (3,246 | ) | **** | 17,783 | (8,484 | ) | 10,777 | ||||||
| Non-controlling interests | **** | 1,651 | 813 | **** | 5,155 | 3,022 | 3,950 | ||||||||
| Total comprehensive income for the year | **** | 6,737 | (2,433 | ) | **** | 22,938 | (5,462 | ) | 14,727 | ||||||
| Earnings (loss) per share (cents) | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Basic earnings (loss) per share | **** | 29.7 | (18.7 | ) | **** | 91.2 | (43.6 | ) | 84.8 | ||||||
| Diluted earnings (loss) per share | **** | 29.7 | (18.7 | ) | **** | 91.2 | (43.6 | ) | 84.7 | ||||||
| Adjusted earnings per share (cents) | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Basic | **** | 44.3 | 2.1 | **** | 125.2 | (10.3 | ) | 217.7 | |||||||
| Dividends paid per share (cents) | **** | 14.0 | 14.0 | **** | 56.0 | 70.0 | 50.0 |
^* Refer to^^section 10^^and^^section 11^^of this MD&A.^
9
3.1 Revenue analysis
The table below reconciles “Average gold price per ounce” to the revenue shown in the financial statements which have been prepared under IFRS.
| Reconciliation of average realised gold price per ounce | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (’000’s, unless otherwise indicated) | |||||||||||
| 12 months ended Dec 31 | |||||||||||
| 2023 | 2024 | 2023 | |||||||||
| Revenue (IFRS) | 47,515 | 38,661 | **** | 183,018 | 146,314 | ||||||
| Revenues from sales of silver | (29 | ) | (29 | ) | **** | (132 | ) | (118 | ) | ||
| Revenues from sales of gold | 47,486 | 38,632 | **** | 182,886 | 146,196 | ||||||
| Gold ounces sold (oz) | 18,141 | 20,098 | ****** | 77,917 | 76,532 | ||||||
| Average realised gold price per ounce (US/oz) | 2,618 | 1,922 | ****** | 2,347 | 1,910 |
All values are in US Dollars.
Revenue in the Quarter was 22.9% higher than the comparative quarter due to a 36.2% increase in the average realised price of gold sold and offset by 9.7% fewer ounces sold. Revenue for the Year was 25.1% higher than in 2023 due to a 22.9% increase in the average realised price of gold sold, and a 1.8% increase in ounces sold in the Year compared to 2023. Sales in the Quarter exclude 3,442 ounces (2023: 3,057) of gold that were held as work-in-progress and sold shortly after December 31, 2024. Blanket accumulated an ore stockpile of 8,487 tonnes estimated to contain 700 ounces as at December 31, 2024.
The royalty rate payable to the Zimbabwe Government was unchanged at 5%.
10
3.2 Production, other cost and other income analysis
3.2.1 Cost per ounce
| Cost per ounce of gold sold | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (US/ounce) | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Blanket | Consolidated | ||||||||||||||||||||||
| 12 months ended | 3 months ended | 12 months ended | 3 months ended | 12 months ended | |||||||||||||||||||
| Dec 31 | Dec 31 | Dec 31 | Dec 31 | Dec 31 | |||||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||
| On-mine cost per ounce3 | 2,273 | 3,122 | **** | 2,044 | 4,293 | **** | 1,152 | 1,018 | **** | 1,052 | 965 | **** | 1,177 | 1,092 | **** | 1,073 | 1,097 | ||||||
| All-in sustaining cost per ounce3 | 2,337 | 3,268 | **** | 2,168 | 4,447 | **** | 1,867 | 1,768 | **** | 1,491 | 1,377 | **** | 1,877 | 1,820 | **** | 1,506 | 1,499 | ||||||
| All-in cost per ounce3 | 2,337 | 3,268 | **** | 2,168 | 5,398 | **** | 2,125 | 1,964 | **** | 1,658 | 1,626 | **** | 2,242 | 2,018 | **** | 1,730 | 1,782 |
All values are in US Dollars.
Non-IFRS performance measures such as “on-mine cost per ounce”, “all-in sustaining cost per ounce,” and “all-in cost per ounce” are used in this document. Management believes these measures assist investors and other stakeholders in understanding the economics of gold mining over the life cycle of a mine. These measures are calculated on the principles set out by the World Gold Council and are further explained below.
| 1. | On-mine cost per ounce ^3^, which shows the on-mine costs of producing an ounce of gold and includes direct costs that are incurred on day-to-day activity for the mine and excludes once-off retirement and severance costs. ESG costs were included in the on-mine cost as well as in the comparative amounts due to the increased focus on ESG; |
|---|---|
| 2. | All-in sustaining cost per ounce ^3^, which shows the on-mine cost per ounce plus royalty paid, additional costs incurred outside the mine (i.e., at offices in Harare, Bulawayo, Johannesburg and Jersey), capital costs required to maintain production at the current levels (sustaining capital investment), the share-based expense (or credit) arising from the awards made to employees under the 2015 Omnibus Equity Incentive Compensation Plan (“OEICP”) less silver by-product revenue; and |
| --- | --- |
| 3. | All-in cost per ounce ^3^, which shows the all-in sustaining cost per ounce plus the costs associated with activities that are undertaken with a view to increasing production (expansion capital investment). Exploration and evaluation costs were included in the all-in cost as well as in the comparative amounts. |
| --- | --- |
A narrow focus on the direct costs of production does not reflect the cost of gold production under IFRS and adds certain capital and other costs. The table below reconciles non-IFRS cost measures to the production costs shown in the financial statements prepared under IFRS.
^3 On-mine cost per ounce, all-in sustaining cost per ounce, and all-in cost per ounce are non-IFRS measures.^
11
| Cost per ounce of gold sold | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (US/ounce) | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | ||||||||||||||||||||||||||||||
| Blanket | Motapa and Bilboes Sulphide | Consolidated | ||||||||||||||||||||||||||||||||||||||||
| 12 months ended | 3 months ended | 12 months ended | 3 months ended | 12 months ended | 3 months ended | 12 months ended | ||||||||||||||||||||||||||||||||||||
| Dec 31 | Dec 31 | Dec 31 | Dec 31 | Dec 31 | Dec 31 | Dec 31 | ||||||||||||||||||||||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||||||
| Production cost (IFRS) | 901 | 2,227 | **** | 3,386 | 13,118 | **** | 19,338 | 19,454 | **** | 77,358 | 69,591 | — | — | — | — | **** | 20,239 | 21,681 | **** | 80,744 | 82,709 | |||||||||||||||||||||
| Cash-settled share-based expense | 24 | (23 | ) | **** | (22 | ) | (23 | ) | **** | 370 | (202 | ) | **** | (412 | ) | (637 | ) | — | — | — | — | **** | 394 | (225 | ) | **** | (434 | ) | (660 | ) | ||||||||||||
| Less exploration and safety costs | — | — | — | — | **** | (306 | ) | (299 | ) | **** | (1,112 | ) | (1,155 | ) | — | — | — | — | **** | (306 | ) | (299 | ) | **** | (1,112 | ) | (1,155 | ) | ||||||||||||||
| On-mine admin costs, employee incentives and intercompany adjustments | — | — | — | — | **** | 696 | 209 | **** | 3,095 | 1,579 | — | — | — | — | **** | 696 | 209 | **** | 3,095 | 1,579 | ||||||||||||||||||||||
| Corporate social responsibility ("CSR") costs | — | — | — | — | **** | 338 | 580 | **** | 1,326 | 1,505 | — | — | — | — | **** | 338 | 580 | **** | 1,326 | 1,505 | ||||||||||||||||||||||
| On-mine production cost | 925 | 2,204 | **** | 3,364 | 13,095 | **** | 20,436 | 19,742 | **** | 80,255 | 70,883 | — | — | — | — | **** | 21,361 | 21,946 | **** | 83,619 | 83,978 | |||||||||||||||||||||
| Gold sales (oz) | 407 | 706 | **** | 1,646 | 3,050 | **** | 17,734 | 19,392 | **** | 76,271 | 73,482 | — | — | — | — | **** | 18,141 | 20,098 | **** | 77,917 | 76,532 | |||||||||||||||||||||
| On-mine cost per ounce (/oz) | 2,273 | 3,122 | ****** | 2,044 | 4,293 | ****** | 1,152 | 1,018 | ****** | 1,052 | 965 | — | — | — | — | ****** | 1,177 | 1,092 | ****** | 1,073 | 1,097 | |||||||||||||||||||||
| Royalty | 50 | 94 | **** | 182 | 319 | **** | 2,382 | 1,893 | **** | 9,081 | 7,318 | — | — | — | — | **** | 2,432 | 1,987 | **** | 9,263 | 7,637 | |||||||||||||||||||||
| Exploration, remediation and permitting cost | — | — | — | — | — | 17 | **** | 50 | 55 | — | — | — | — | — | 17 | **** | 50 | 55 |
All values are in US Dollars.
12
| Cost per ounce of gold sold | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (US/ounce) | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | ||||||||||||||||||||||||||||||
| Blanket | Motapa and Bilboes Sulphide | Consolidated | ||||||||||||||||||||||||||||||||||||||||
| 12 months ended | 3 months ended | 12 months ended | 3 months ended | 12 months ended | 3 months ended | 12 months ended | ||||||||||||||||||||||||||||||||||||
| Dec 31 | Dec 31 | Dec 31 | Dec 31 | Dec 31 | Dec 31 | Dec 31 | ||||||||||||||||||||||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||||||
| Sustaining capital expenditure# | — | 13 | — | 154 | **** | 8,348 | 8,852 | **** | 19,109 | 17,199 | — | — | — | — | **** | 8,348 | 8,865 | **** | 19,109 | 17,353 | ||||||||||||||||||||||
| Sustaining administrative expenses& | — | — | — | — | **** | 3,982 | 4,320 | **** | 9,394 | 8,485 | — | — | — | — | **** | 3,982 | 4,320 | **** | 9,394 | 8,485 | ||||||||||||||||||||||
| Silver by-product credit | — | (4 | ) | — | (4 | ) | **** | (29 | ) | (25 | ) | **** | (132 | ) | (114 | ) | — | — | — | — | **** | (29 | ) | (29 | ) | **** | (132 | ) | (118 | ) | ||||||||||||
| Cash-settled share-based payment expense included in production cost | (24 | ) | — | **** | 22 | — | **** | (370 | ) | 225 | **** | 412 | 660 | — | — | — | — | **** | (394 | ) | 225 | **** | 434 | 660 | ||||||||||||||||||
| Cash-settled share-based payment expense | — | — | — | — | **** | (278 | ) | 165 | **** | 201 | 463 | — | — | — | — | **** | (278 | ) | 165 | **** | 201 | 463 | ||||||||||||||||||||
| Equity-settled share-based payment expense | — | — | — | — | **** | 269 | 76 | **** | 1,054 | 640 | — | — | — | — | **** | 269 | 76 | **** | 1,054 | 640 | ||||||||||||||||||||||
| Procurement margin included in on-mine cost* | — | — | — | — | **** | (1,636 | ) | (989 | ) | **** | (5,671 | ) | (4,422 | ) | — | — | — | — | **** | (1,636 | ) | (989 | ) | **** | (5,671 | ) | (4,422 | ) | ||||||||||||||
| AISC | 951 | 2,307 | **** | 3,568 | 13,564 | **** | 33,104 | 34,276 | **** | 113,753 | 101,167 | — | — | — | — | **** | 34,055 | 36,583 | **** | 117,321 | 114,731 | |||||||||||||||||||||
| Gold sales (oz) | 407 | 706 | **** | 1,646 | 3,050 | **** | 17,734 | 19,392 | **** | 76,271 | 73,482 | — | — | — | — | **** | 18,141 | 20,098 | **** | 77,917 | 76,532 | |||||||||||||||||||||
| AISC per ounce (/oz) | 2,337 | 3,268 | ****** | 2,168 | 4,447 | ****** | 1,867 | 1,768 | ****** | 1,491 | 1,377 | — | — | — | — | ****** | 1,877 | 1,820 | ****** | 1,506 | 1,499 |
All values are in US Dollars.
13
| Cost per ounce of gold sold | **** | **** | **** | **** | **** | **** | **** | **** | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (US/ounce) | **** | **** | **** | **** | **** | **** | **** | **** | |||||||||||||||||||||||
| Blanket | Motapa and Bilboes Sulphide | Consolidated | |||||||||||||||||||||||||||||
| 12 months ended | 3 months ended | 12 months ended | 3 months ended | 12 months ended | 3 months ended | 12 months ended | |||||||||||||||||||||||||
| Dec 31 | Dec 31 | Dec 31 | Dec 31 | Dec 31 | Dec 31 | Dec 31 | |||||||||||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||
| Non-sustaining administrative expenses& | — | — | — | 2,900 | **** | 1,469 | 1,219 | **** | 4,165 | 6,044 | — | — | — | — | **** | 1,469 | 1,219 | **** | 4,165 | 8,944 | |||||||||||
| E&E Assets - Motapa | — | — | — | — | — | — | — | — | **** | 754 | 162 | **** | 2,521 | 388 | **** | 754 | 162 | **** | 2,521 | 388 | |||||||||||
| E&E Assets - Bilboes | — | — | — | — | — | — | — | — | **** | 1,289 | — | **** | 2,287 | — | **** | 1,289 | — | **** | 2,287 | — | |||||||||||
| Permitting and exploration expenses | — | — | — | — | — | 10 | **** | 35 | 32 | — | — | — | — | — | 10 | **** | 35 | 32 | |||||||||||||
| Non-sustaining capital expenditure# | — | — | — | — | **** | 3,111 | 2,579 | **** | 8,472 | 12,253 | — | — | — | — | **** | 3,111 | 2,579 | **** | 8,472 | 12,253 | |||||||||||
| AIC | 951 | 2,307 | **** | 3,568 | 16,464 | **** | 37,684 | 38,084 | **** | 126,425 | 119,496 | **** | 2,043 | 162 | **** | 4,808 | 388 | **** | 40,678 | 40,553 | **** | 134,801 | 136,348 | ||||||||
| Gold sales (oz) | 407 | 706 | **** | 1,646 | 3,050 | **** | 17,734 | 19,392 | **** | 76,271 | 73,482 | — | — | — | — | **** | 18,141 | 20,098 | **** | 77,917 | 76,532 | ||||||||||
| All-in costs per ounce | 2,337 | 3,268 | ****** | 2,168 | 5,398 | ****** | 2,125 | 1,964 | ****** | 1,658 | 1,626 | — | — | — | — | ****** | 2,242 | 2,018 | ****** | 1,730 | 1,782 |
All values are in US Dollars.
^* The on-mine cost reflects the cost incurred on-mine to produce gold. The procurement margin on consumable sales between CMSA and Blanket is not deducted from on-mine cost as the cost represents a fair value that Blanket would pay for consumables if they were sourced from a third party. The procurement margin on these sales is deducted from all-in sustaining cost and all-in cost as these numbers represent the consolidated costs at a group level, excluding intercompany profit margins.^
^& Administrative expenses relate to costs incurred by the Group to provide services for mining and related activities. Administrative expenses are allocated between AISC and All-in cost.^
^# Non-sustaining costs are primarily those costs incurred at^‘^new operations^’^and costs related to^‘^major projects at existing operations^’^where these projects will materially benefit the operation.^ ^All other costs related to existing operations are considered sustaining.^
14
On-mine cost per ounce
On-mine costs comprise electricity, labour, consumables, administrative, and other costs directly related to production, such as insurance, Blanket's software licensing, ESG and security.
| Analysis of on-mine production costs between Blanket and Bilboes (non IFRS) | |||||||
|---|---|---|---|---|---|---|---|
| (’000’s) | 12 months ended | ||||||
| December 31 | |||||||
| 2023 | 2024 | 2023 | |||||
| Blanket | 20,436 | 19,742 | **** | 80,255 | 70,883 | ||
| Bilboes | 925 | 2,204 | **** | 3,364 | 13,095 | ||
| Total | 21,361 | 21,946 | **** | 83,619 | 83,978 | ||
| On-mine cost per ounce (/oz) | 1,177 | 1,092 | **** | 1,073 | 1,097 |
All values are in US Dollars.
On-mine production cost per ounce increased by 7.8% in the Quarter compared to the comparative quarter; On-mine production cost per ounce for the Year decreased by 2.2% compared to 2023, predominantly due to the Bilboes oxide mine being placed on care and maintenance on September 30, 2023.
The increase in on-mine cost per ounce in the Quarter, compared to the comparative quarter is illustrated in the graph below.
At Blanket, on-mine production cost increased by 3.5% in the Quarter compared to the comparative quarter and increased by 13.2% for the Year compared to the previous year. On-mine cost at Blanket exclusive of corporate social responsibility ("CSR") projects cost amounted to $1,035 per ounce and was within the guidance levels of between $950 per ounce to $1,050 per ounce.
Electricity use at Blanket increased due to the continued use of infrastructure such as the No. 4, 6 shaft, 5 Winze, Lima and Jethro shafts in addition to the Central shaft which was commissioned in 2022. Electricity costs also increased due to higher maximum demand and reactive energy charges. The maximum demand charges are levied for the maximum drawn instantaneous apparent power, which is predominantly driven by big loads like Central shaft winders.
15
In 2025 the conversion of the Central shaft winder from alternative current to a direct current operating motor is planned to allow for variable power usage as the speeds and sizes of hoists fluctuate. This will in turn reduce the apparent power required to hoist ore and waste from underground.
The power factor correction equipment installed in November 2024 successfully reduced the reactive penalty charges and had the added benefit of reducing generator use and the related cost from December onwards.
Increased skip payload, hoisting speed and improved sequencing of hoists at Central shaft, planned for 2025, is expected to reduce electricity usage and result in operational efficiencies. Further, management is evaluating the current electricity infrastructure, usage and is looking at alternative sources of energy that will supplement the current electricity mixture with a view to increasing reliability and quality of supply as well as reducing cost over the mine life of Blanket.
The inter-company benefit of the solar plant (owned by Caledonia at December 31, 2024) is not recognised in on-mine cost because the solar plant sells power to Blanket at a price per kilowatt/hour which reflects Blanket's historic blended cost per unit of power. The economic benefit of the solar plant is therefore recognised by Caledonia, rather than by Blanket, and the benefit ($49 per ounce of gold sold in the Quarter) is reflected in the AISC rather than the on-mine cost. The solar plant has the added benefit of stabilising the Blanket electrical grid by improving the reactive power factor and reducing the generator use by supplementing power availability.
Labour cost increased by $80 per ounce due to additional headcount of 42 employees, 2024 inflationary increases, bonuses paid, and overtime worked. Production bonuses were paid as an incentive to increase production after the fall of ground at Eroica 870 level adversely affected the average grade. It resulted in record tonnages mined and hoisted in the Year, which alleviated the effect of the lower grade on the ounces. The increased tonnes mined and milled produced an estimated 924 ounces, generating revenues of $2.3 million. The additional tonnages in the Quarter required overtime to be worked at $36 per ounce. A new clocking system is being implemented in 2025 and is expected to improve the monitoring of our labour force and reduce inefficient labour allocation in future.
Consumable costs per ounce at Blanket in the Quarter increased due to higher repair and maintenance costs at the metallurgical plant and underground equipment in the Quarter compared to the comparative quarter. Other production costs increased due to inflationary increases in ZiG-denominated security, telecom expenses and water levies.
The cost of oxide mining at Bilboes contributed a reduction in production costs from the comparative quarter after it was placed on care and maintenance on September 30, 2023. Leaching activities related to the heap leach pad have covered the care and maintenance cost of the existing Bilboes infrastructure and the leaching will continue for as long as it makes a positive cash contribution after the cost of leaching is incurred. Bilboes is discussed further in section 4.6. Bilboes oxide mine administrative, inter-company loan and other costs in the Quarter were offset by a reversal of interest cost in the Quarter.
16
All-in sustaining cost
All-in sustaining cost includes inter alia administrative expenses incurred outside Zimbabwe and excludes the intercompany procurement margin and deducts the solar power intercompany profit as this reflects the consolidated cost incurred at the Group level. The all-in sustaining cost per ounce for the Quarter was 3.1% higher than the comparative quarter predominantly due to lower ounces sold, higher on-mine costs and increased sustaining capital expenditure. Sustaining capital expenditure includes underground capital development, IT software installation predominantly to enhance the on-mine resource management planning abilities, exploration at Blanket, electrical and surface engineering (as detailed in section 3.4). More of the Blanket capital expenditure is allocated to sustaining capital expenditure rather than to expansion (non-sustaining) capital investment which is included in the calculation of all-in cost. Total capital expenditure was lower in the Year compared to 2023.
The increase in AISC per ounce in the Quarter compared to the comparative quarter is illustrated in the graph below:
All-in cost
All-in cost includes investment in capital expansion projects at Blanket and exploration and evaluation expenditure on projects. Capital projects at Blanket are discussed in section 4.4 and exploration and evaluation projects are discussed in section 5 for Bilboes and Motapa.
17
3.2.2 Administrative Expenses
Administrative expenses are detailed in note 10 to the Consolidated Financial Statements and include the costs of Caledonia’s offices and personnel in Harare, Johannesburg, Bulawayo, the UK and Jersey, which provide the following functions: feasibility study, technical services, finance, procurement, investor relations, corporate development, legal and company secretarial.
| Analysis of Administrative expenses | ||||||||
|---|---|---|---|---|---|---|---|---|
| ($’000’s) | 3 months ended | 12 months ended | ||||||
| December 31 | December 31 | |||||||
| 2024 | 2023 | 2024 | 2023 | |||||
| Investor relations | **** | 379 | 84 | **** | 743 | 576 | ||
| Professional consulting fees and advisory services | **** | 1,258 | 301 | **** | 2,547 | 4,406 | ||
| Listing fees | **** | 189 | 72 | **** | 630 | 749 | ||
| Directors fees (Caledonia and Blanket) | **** | 193 | 110 | **** | 757 | 632 | ||
| Employee cost | **** | 2,438 | 4,256 | **** | 8,144 | 8,518 | ||
| Other | **** | 972 | 716 | **** | 2,837 | 2,548 | ||
| Total | **** | 5,429 | 5,539 | **** | 15,658 | 17,429 |
Administrative expenses in the Quarter were 2.0% lower than the comparative quarter. The administrative expenses for 2023 included a once-off $3.1 million paid as advisory services on conclusion of the Bilboes Gold Limited acquisition. Employee cost for the Year predominantly reduced due to $1.7 million of settlement expenditures incurred in 2023 offset by a provision for bonuses in 2024 of $0.9 million (2023: $nil).
3.2.3 Depreciation, foreign exchange (losses) gains and other expenses
In the comparable quarter, a reassessment of the useful lives of certain plant and equipment items like generators, load haul dumpers, dump trucks and electrical equipment was performed resulting in a highly elevated depreciation expense over a few quarters in 2023. The depreciation charge for the Year was $1.5 million higher than the prior year due to capital additions in the year.
Net foreign exchange movements in the Quarter relate to profits and losses arising on monetary assets and liabilities that are held in currencies other than the USD - principally the ZiG (before April 5, 2024 the RTGS$) and, to a lesser extent, the South African Rand and the British Pound. The total net foreign exchange loss in the Quarter amounted to $0.4 million, and the net gains were predominantly due to the stabilisation of the ZiG exchange rate against the USD, which contributed $1.3 million to the overall exchange losses for the period. Other foreign currencies contributed $0.9 million to the foreign exchange gains for the Quarter.
The net foreign exchange loss in the Year amounted to $9.7 million: a loss of $6.8 million resulted from the devaluation of the RTGS$ (a currency that was discontinued on April 5, 2024); a loss of $2.9 million resulted from the devaluation of the ZiG (which replaced the RTGS$) and foreign exchange losses of $0.01million were incurred on other foreign currencies. $3.0 million of foreign exchange losses were incurred due to cash held by way of a Letter of Credit ("LC") denominated in RTGS$. Delays by the local banks in converting the LC resulted in a devaluation of the asset when the RTGS$ devalued prior to conversion. Further foreign exchange losses on the RTGS$ and ZiG were predominantly incurred on the RTGS$ and ZiG-denominated receivables on gold sales and VAT refunds. These receivables reduced, in value due to the devaluation of the ZiG between the transaction dates and the settlement dates.
Other expenses for the Quarter and Year include $2.1 million of non-cash impairment expenses. $1.2 million relates to the impairment of the Lima metallurgical plant that was previously utilised as a backup in case of a breakdown at the main Blanket metallurgical plant. The installation of Ball Mill 10 in 2022 and other efficiencies implemented at the Blanket metallurgical plant have provided sufficient comfort that Blanket has adequate milling capacity at the main plant and therefore the Lima metallurgical plant can be re-purposed as a test plant to research the potential for recovery improvements of gold from refractory ore. $0.3 million is earmarked in 2025 for research expenditure on the ore of one of Blanket's satellite properties that is refractory in nature. Initial tests indicated that recoveries on this ore could potentially increase from 35% to 85%: the test plant will test this on a larger scale to validate its feasibility. A positive outcome to this research work may be relevant for refractory ore at Blanket’s other satellite properties and at Bilboes, Motapa and Maligreen. The replacement of a faulty transformer at the solar plant resulted in an impairment of $0.4 million and drill rigs no longer in use with a carrying value of $0.3 million were also impaired. The remainder of the items impaired relate to discontinued mining equipment.
18
CSR cost amounted to $0.3 million in the Quarter and $1.3 million in the Year. CSR is further discussed in section 4.2.
Other expenses include Intermediate Monetary Transaction Tax of $1.4 million for the Year that is chargeable on the transfer of physical money, electronically or by any other means and is charged at 2% per transaction performed in Zimbabwe.
A once-off retirement cost of $2.1 million was paid in the Year to approximately 100 employees who retired.
3.2.4 Tax expense
| Analysis of consolidated tax expense for the Year | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| ($’000’s) | Blanket | South Africa | UK | Bilboes and CHZ | Total | ||||||
| Income tax | 13,888 | 494 | – | – | 14,382 | ||||||
| Withholding tax | – | – | – | – | |||||||
| Management fee | – | 140 | – | – | 140 | ||||||
| Deemed dividend | 312 | – | – | – | 312 | ||||||
| CHZ dividends to GMS-UK | – | – | 476 | – | 476 | ||||||
| Deferred tax | 2,295 | (116 | ) | – | – | 2,179 | |||||
| 16,495 | 518 | 476 | – | 17,489 |
The overall effective taxation rate for the Quarter was 40.9% (Q4 2023: 255.1%) and for the Year it was 43.1% (2023: 160.7%). The effective tax rate bears little relationship to reported consolidated profit before tax as illustrated by the tax rate reconciliation, as detailed in note 16 of the Consolidated Financial Statements.
The effective consolidated tax rate is higher than the enacted rate of Zimbabwean income tax due to the following reasons:
| • | The rate of income tax in Jersey, the tax domicile of the parent company of the Group (i.e. the Company), is zero, which means there is no tax benefit to be realised by offsetting expenses incurred in Jersey against profit. Such expenses include administrative expenses and expenses incurred in respect of derivatives, and share-based payments; |
|---|---|
| • | Management fees charged to Blanket by the shared services centres in Bulawayo and in South Africa are not fully deductible for income tax purposes and incur withholding tax; |
| --- | --- |
| • | The Johannesburg office from time-to-time makes an intercompany profit, which results in a South African income tax expense. On consolidation, inter-company profits are eliminated, but the tax expense remains. |
| --- | --- |
19
The effective taxation rate for Blanket was 28.4% (2023: 29%), which closely corresponds to the enacted Zimbabwean income tax rate applicable in the Year of 25.75%.
From January 1, 2023 the Zimbabwean taxable income was calculated and paid on a USD75:ZiG25 basis. From July 1, 2024, the taxable income calculation was performed in a similar manner and the amount payable changed to a USD50:ZiG50 basis.
Deferred tax predominantly comprises the difference between the accounting and tax treatments of capital investment expenditure. Most of the tax expense comprised income tax and deferred tax incurred in Zimbabwe.
South African income tax arises on intercompany profits arising at Caledonia Mining South Africa Proprietary Limited (“CMSA”) on goods sold and intergroup services rendered.
Zimbabwe withholding tax arose on the management fees paid to CMSA and on dividends paid from Caledonia Holdings Zimbabwe (Private) Limited (“CHZ”) to the Company’s subsidiary in the UK Greenstone Management Services Holdings Limited (“GMS-UK”).
3.2.5 Other income
On January 31, 2019 Caledonia sold 100% of the shares of the Eersteling gold mine ("Eersteling"), for an amount of $3 million. Of the proceeds, $2.1 million was received and $0.9 million impaired in 2021. On March 6, 2024 an amount of $0.2 million of the previously impaired amount was received from the new owners of Eersteling.
Included in other income is a reversal of interest and penalties provided for of $0.7 million that were not levied.
3.2.6 Basic EPS
Basic IFRS EPS for the Quarter improved by 258.8% from a loss of 18.7 cents in the comparative quarter to a profit of 29.7 cents in the Quarter; basic IFRS EPS for the Year increased by 309.2% from a loss of 43.6 cents in the prior year to a profit of 91.2 cents. Adjusted EPS for the Quarter excludes inter alia the effect of intercompany foreign net exchange movements and deferred tax. Adjusted EPS increased from a profit of 2.1 cents in the comparative quarter to a profit of 44.3 cents for the Quarter. Adjusted EPS for the Year increased from a loss of 10.3 cents in 2023 to a profit of 125.2 cents. A reconciliation from Basic IFRS EPS to adjusted EPS is set out in section 8.
3.2.7 Dividends
A dividend of 14.0 cents per share was paid in each quarter of 2024. A dividend of 14 cents per share was declared on March 24, 2025 and will be paid on April 17, 2025.
20
3.3 Cash flow analysis
The table below sets out the summarised cash flows for the years ended December 31, 2024, 2023 and 2022 prepared under IFRS.
| Summarised Consolidated Statements of Cash Flows | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| ($’000’s) | 12 months ended | ||||||||
| December 31 | |||||||||
| 2024 | 2023 | 2022 | |||||||
| Net cash inflow from operating activities | **** | 41,955 | 14,769 | 42,616 | |||||
| Net cash used in investing activities | **** | (32,055 | ) | (31,161 | ) | (44,329 | ) | ||
| Net cash (used in) / from financing activities | **** | (7,803 | ) | 3,931 | (12,754 | ) | |||
| Net increase / (decrease) in cash and cash equivalents | **** | 2,097 | (12,461 | ) | (14,467 | ) | |||
| Effect of exchange rate fluctuations on cash and cash equivalents | **** | 267 | (67 | ) | (302 | ) | |||
| Net cash and cash equivalents at the beginning of the year | **** | (11,032 | ) | 1,496 | 16,265 | ||||
| Net cash and cash equivalents at the end of the year | **** | (8,668 | ) | (11,032 | ) | 1,496 |
3.3.1 Operating Activities
Cash flows from operating activities in the Year are detailed in note 33 to the Consolidated Financial Statements. Cash inflows from operations before working capital changes in the Year were $65.5 million, compared to $28.5 million in the previous year.
| ($’000’s) | 3 months ended | 12 months ended | ||||||
|---|---|---|---|---|---|---|---|---|
| December 31 | December 31 | |||||||
| 2024 | 2023 | 2024 | 2023 | |||||
| Cash generated from operations before working capital changes | **** | 19,024 | 7,327 | **** | 65,471 | 28,546 |
Cash flows from operations before working capital changes were 159.6% higher for the Quarter and 129.4% for the Year predominantly due to higher gold prices received on gold sales.
The working capital movements in the Year resulted in a $10.0 million outflow. Inventory levels were higher due to the 8,487 tonne stockpile that was accumulated at December 31, 2024 containing an estimated 700 ounces of gold. The stockpile reflects the significant improvement in mine performance in the Quarter, which now exceeds milling capacity, as discussed in section 4.3. Increased inventory spares were required to sustainably operate the Blanket rock breakers, crushers, pneumatic air compressors, generators and trackless mining machinery. A Blanket VAT receipt of $4.9 million was delayed by the Zimbabwean revenue authority ("ZIMRA") and applied against our revenue royalty tax payments. This resulted in a dual deduction of revenue royalties by ZIMRA and Fidelity Gold Refinery (Private) Limited ("FGR") on behalf of ZIMRA in the Quarter. Subsequently permission was received to apply the VAT receivable against our other taxes payable in the first quarter of 2025 and the over-deduction is expected to have been reversed.
Prepayments increased during the Year, as ZiG prepayments were made to suppliers to reduce cash held in ZiG and thereby mitigate the effects of further devaluations in the ZiG. This strategy resulted in an additional $2.7 million in prepayments made by December 31, 2024 to lock in prices of goods denominated in ZiG.
21
Finance costs paid increased due to additional bonds issued in the Zimbabwean market and includes overdraft interest of $1.8 million, term loan interest of $0.3 million and the interest on the solar loan notes of $0.8 million.
3.3.2 Investing activities
An analysis of investments is set out below.
| ($’000’s) | 2021 | 2022 | 2023 | 2024 | 2024 | 2024 | 2024 | 2024 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year | Year | Year | Q1 | Q2 | Q3 | Q4 | Year | ||||||||||
| Property, plant and equipment | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Blanket | 29,323 | 34,267 | 28,240 | 3,596 | 5,823 | 6,483 | **** | 11,207 | **** | 27,109 | |||||||
| Solar | 1,581 | 12,198 | 163 | — | — | — | — | — | |||||||||
| Other | 365 | 967 | 1,203 | 2 | 15 | 203 | **** | 252 | **** | 472 | |||||||
| Total investment – property, plant and equipment | 31,269 | 47,432 | 29,606 | 3,598 | 5,838 | 6,686 | **** | 11,459 | **** | 27,581 | |||||||
| Exploration and evaluation assets | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Bilboes | — | — | 375 | 48 | 143 | 418 | **** | 718 | **** | 1,327 | |||||||
| Connemara North | 163 | 4 | — | — | — | — | — | — | |||||||||
| Glen Hume | 1,176 | — | — | — | — | — | — | — | |||||||||
| Maligreen | 0 | 1,430 | 372 | 7 | 2 | 18 | **** | 8 | **** | 35 | |||||||
| Motapa | 0 | 7,844 | 2,748 | 324 | 588 | 858 | **** | (129 | ) | **** | 1,641 | ||||||
| Other Satellite properties | 243 | 120 | — | 51 | — | — | — | **** | 51 | ||||||||
| Total investment – exploration and evaluation assets | 1,582 | 9,398 | 76,693 | 430 | 733 | 1,294 | **** | 597 | **** | 3,054 |
The acquisition of property, plant and equipment relates to the investment at Blanket as discussed further in section 4.4; the investment in exploration and evaluation assets related to the feasibility study work performed at Bilboes of $1.3 million (2023: $0.4 million), exploration work at Motapa of $1.6 million (2023: $2.7 million) and Maligreen of $35,341 (2023: $0.4 million) during the Year.
Investment in property, plant and equipment at Blanket is discussed in section 4.4 of this MD&A; investment in exploration and evaluation assets is as set out in section 5.
3.3.3 Financing activities
Dividends for the Year comprise $10.8 million paid to shareholders of the Company and $1.6 million to Blanket’s minority shareholders. A dividend of 14 cents per share was paid each quarter of 2024. A dividend of 14 cents per share was declared on March 24, 2025 and will be paid on April 17, 2025.
3.3.4 The effect of exchange rate fluctuations
The effect of exchange rate fluctuations on cash held reflects gains or losses on cash balances held in currencies other than the US Dollar. The effect on cash balances forms part of an overall foreign exchange gain or loss arising on all affected monetary assets and liabilities.
3.3.5 Overdraft facilities and term loans
Operating and investing activities at Blanket in the Quarter were funded by Blanket's operating cash flows and from Blanket’s overdraft facilities which were as set out below at December 31, 2024.
22
| Overdraft facilities | ||||||
|---|---|---|---|---|---|---|
| Lender | Date drawn | Principal value | Balance drawn at December 31, 2024 | Repayment terms | Security | Expiry |
| Stanbic Bank Limited | Mar-24 | ZiG7 million | Nil | On demand | Unsecured | Mar-25 |
| Stanbic Bank Limited | Mar-24 | $4 million | $1 million | On demand | Unsecured | Mar-25 |
| CABS Bank | Oct-24 | $1 million | $1 million | On demand | Unsecured | Oct-25 |
| Ecobank | Mar-24 | $6 million | $4 million | On demand | Unsecured | Feb-25 |
| Nedbank | Apr-24 | $7 million | $6 million | On demand | Unsecured | Apr-25 |
| Term Loans | ||||||
| Lender | Date drawn | Principal value | Balance drawn at December 31, 2024 | Repayment terms | Security | Expiry |
| CABS Bank | Oct-24 | $3 million | $3 million | Quarterly | Unsecured | Mar-27 |
| Letter of credit | ||||||
| Lender | Date drawn | Principal value | Balance drawn at December 31, 2024 | Repayment terms | Security | Expiry |
| Stanbic Bank Limited | - | $3 million | Nil | - | - | Mar-25 |
3.3.6 Hedging
From December 2022 to December 2024, the Company had the following put options to hedge our gold price risk:
| Purchase date | Ounces hedged | Strike price | Period of hedge |
|---|---|---|---|
| December 22, 2022 | 16,672 | 1,750 | December 2022 - May 2023 |
| May 22, 2023 | 28,000 | 1,900 | June - December 2023 |
| December 19, 2023 | 12,000 | 1,950 | January - March 2024 |
| March 7, 2024 | 12,000 | 2,050 | April - June 2024 |
| April 10, 2024 | 12,000 | 2,100 | July - September 2024 |
| October 4, 2024 | 12,000 | 2,600 | October – December 2024 |
The put options were entered into to protect the Company against gold prices lower than the strike price over the period hedged. The options are “out-of-the-money" put options which lock in a minimum price over the number of ounces that are subject to the hedge for an initial option price.
On September 29, 2023 and October 6, 2023 the Company purchased two gold purchase options of 1,000 ounces each at a market price of $1,875 and $1,841 per ounce.
During February, 2025 the Company purchased Asian put options to hedge 43,439 ounces of gold, spread according to planned production, over a period of eleven months from February to December 2025 at a strike price of $2,600 per ounce.
23
3.3.7 Bonds (loan notes)
In December 2022, a proposal for Caledonia Mining Services (Private) Limited (the company owning the solar power plant) to issue bonds up to a value of $12 million in the form of loan notes was approved. The decision was taken to optimise the capital structure of the Group and provide additional debt instruments to the Zimbabwean financial market. The bonds have a fixed interest rate of 9.5% payable bi-annually and have a tenor of 3 years from the date of issue. The bond repayments are guaranteed by the Company, and up to the date of this MD&A, $11.5 million of bonds have been issued to Zimbabwean commercial entities. Due to the expected sale of CMS, the bonds were transferred to CHZ, a wholly owned subsidiary of Caledonia, so that Caledonia could maintain and develop its relationships with Zimbabwe’s institutional debt investors.
3.4 Analysis of financial position
The table below sets out the consolidated statements of Caledonia’s financial position at the end of December 31, 2024, December 31, 2023 and December 31, 2022, prepared under IFRS.
| Summarised Consolidated Statements of Financial Position (’000’s) | |||||
|---|---|---|---|---|---|
| As at | Dec 31 | Dec 31 | |||
| 2023 | 2022 | ||||
| ^*Restated^ | ^*Restated^ | ||||
| Total non-current assets | 287,046 | 274,074 | 196,764 | ||
| Income tax receivable | 355 | 1,120 | 40 | ||
| Inventories | 23,768 | 20,304 | 18,334 | ||
| Derivative financial assets | – | 88 | 440 | ||
| Trade and other receivables | 12,675 | 9,952 | 9,185 | ||
| Prepayments | 6,748 | 2,538 | 3,693 | ||
| Cash and cash equivalents | 4,260 | 6,708 | 6,735 | ||
| Assets held for sale | 13,512 | 13,519 | – | ||
| Total assets | 348,364 | 328,303 | 235,191 | ||
| Total non-current liabilities | 68,505 | 63,970 | 45,061 | ||
| Cash-settled share-based payment | 634 | 920 | 1,188 | ||
| Income tax payable | 2,958 | 10 | 1,324 | ||
| Lease liabilities | 95 | 167 | 132 | ||
| Loans and borrowings | 1,174 | – | – | ||
| Loan note instruments | 855 | 665 | 7,104 | ||
| Trade and other payables | 26,647 | 20,503 | 17,454 | ||
| Derivative Financial Liabilities | – | – | – | ||
| Overdrafts | 12,928 | 17,740 | 5,239 | ||
| Liabilities associated with assets held for sale | 104 | 128 | – | ||
| Total liabilities | 113,900 | 104,103 | 77,502 | ||
| Total equity | 234,464 | 224,200 | 157,689 | ||
| Total equity and liabilities | 348,364 | 328,303 | 235,191 |
All values are in US Dollars.
^* Refer to^^section 10^^and^^section 11^^of this MD&A.^
Property, plant and equipment additions at Blanket amounted to $11.0 million in the Quarter, and $28.3 million for the Year (rehabilitation change in estimate excluded and inclusive of intercompany mark-up). The additions during the Year predominantly related to:
| • | New Tailings Storage Facility ("TSF") (second phase) - $8.3 million; |
|---|---|
| • | Capital development at 30 and 34 levels - $8.6 million; |
| --- | --- |
| • | Information technology infrastructure - $1.3 million; |
| --- | --- |
| • | Deep drilling and exploration - $1.2 million; |
| --- | --- |
24
| • | Electrical engineering - $2.1 million; |
|---|---|
| • | Mill and surface engineering - $1.8 million; and |
| --- | --- |
| • | Staff housing - $0.6 million. |
| --- | --- |
The total capital expenditure for 2024 at Blanket amounted to $27.9 million versus a planned expenditure of $30.8 million. The capital expenditure remained within the guidance levels and the shortfall in spending against budget of $2.9 million was incurred early in 2025. The delayed $2.9 million expenditure had no impact on operations at Blanket.
Inventory, trade receivables, prepayments and trade payables are discussed under section 3.3.
Overdrafts are used for short-term working capital funding requirements in Zimbabwe. Expiration dates and terms of the overdrafts and short-term loans are set out in section 3.3.5.
For details on the solar plant held for sale, refer to section 4.8.
The table below illustrates the distribution of the consolidated cash across the jurisdictions where the Group holds its cash:
Geographical location of net cash ($’000’s)
| As at | Mar 31, | Jun 30, | Sep 30, | Dec 31, | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2024 | 2024 | 2024 | |||||||||
| Zimbabwe | (15,708 | ) | (3,393 | ) | (11,375 | ) | **** | (10,251 | ) | |||
| South Africa | 919 | 750 | 1,754 | **** | 1,539 | |||||||
| UK/Jersey | 629 | 1,277 | 1,986 | **** | 44 | |||||||
| Total net cash and cash equivalents | (14,160 | ) | (1,366 | ) | (7,635 | ) | **** | (8,668 | ) |
3.5 Supplementary financial information
The following information is provided for each of the eight most recent quarterly periods ending on the dates specified. The amounts are extracted from underlying financial statements that have been prepared using accounting policies consistent with IFRS.
| ($’000’s except per share amounts) | Mar 31, | Jun 30, | Sep 30, | Dec 31, | Mar 31, | Jun 30, | Sep 30, | Dec 31, | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023<br><br> <br>^*Restated^ | 2023<br><br> <br>^*Restated^ | 2023<br><br> <br>^*Restated^ | 2023<br><br> <br>^*Restated^ | 2024<br><br> <br>^*Restated^ | 2024<br><br> <br>^*Restated^ | 2024<br><br> <br>^*Restated^ | 2024 | |||||||||||||||||
| Revenue | 29,438 | 37,027 | 41,187 | 38,661 | 38,528 | 50,107 | 46,868 | **** | 47,515 | |||||||||||||||
| (Loss)/profit attributable to owners of the Company | (5,355 | ) | (2,927 | ) | 3,823 | (3,402 | ) | 1,486 | 8,283 | 2,264 | **** | 5,865 | ||||||||||||
| EPS – basic (cents) | (32.2 | ) | (13.5 | ) | 20.7 | (18.7 | ) | 7.3 | 42.2 | 12.0 | **** | 29.7 | ||||||||||||
| EPS – diluted (cents) | (32.1 | ) | (13.5 | ) | 20.7 | (18.7 | ) | 7.3 | 42.2 | 12.0 | **** | 29.7 | ||||||||||||
| Net cash and cash equivalents | 3,189 | (2,097 | ) | (3,192 | ) | (11,032 | ) | (14,160 | ) | (1,366 | ) | (7,635 | ) | **** | (8,668 | ) |
25
4. OPERATIONS
4.1. Safety, Health and Environment
4.1.1. Blanket
| Blanket Safety Statistics | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Leading Indicators | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | ||||||||
| 2023 | 2023 | 2023 | 2023 | 2024 | 2024 | 2024 | 2024 | |||||||||
| Accident Free Days | 79 | 78 | 85 | 89 | 82 | 81 | 85 | **** | 88 | |||||||
| Near Misses | 4 | 3 | 3 | 7 | 12 | 2 | 4 | **** | 9 | |||||||
| Total Injury Frequency Rate | 1.4 | 1.4 | 0.8 | 0.4 | 0.9 | 1.3 | 0.9 | **** | 0.4 | |||||||
| Audits | — | — | — | — | 86 | 79 | 587 | **** | 529 | |||||||
| Inspections | 127 | 132 | 46 | 73 | 129 | 158 | 552 | **** | 734 | |||||||
| No. of Employees Inducted | 801 | 656 | 688 | 607 | 614 | 985 | 1,008 | **** | 827 | |||||||
| Safety Meetings | 54 | 71 | 67 | 74 | 53 | 82 | 128 | **** | 123 | |||||||
| No. of Employees Trained | 850 | 345 | 477 | 672 | 1,245 | 1,615 | 1,682 | **** | 1,793 | |||||||
| Planned Job Observations | 1,109 | 1,036 | 1,030 | 1,097 | 739 | 1,155 | 2,762 | **** | 2,440 | |||||||
| Workplace Conditions | — | — | — | — | — | — | 5,195 | **** | 4,890 | |||||||
| Blanket Safety Statistics | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Lagging Indicators | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | ||||||||
| 2023 | 2023 | 2023 | 2023 | 2024 | 2024 | 2024 | 2024 | |||||||||
| Loss of Life | 1 | — | — | — | — | — | 1 | — | ||||||||
| Lost Time Injuries | — | 6 | 1 | 2 | 1 | — | 1 | **** | 2 | |||||||
| Restricted Work Activity Case | 6 | 8 | 3 | 1 | 5 | 9 | 2 | **** | 1 | |||||||
| Medical Aid Case Injuries | 4 | 1 | 1 | 1 | 1 | 3 | 3 | **** | 1 | |||||||
| First Aid | 1 | — | — | — | 1 | — | 1 | — | ||||||||
| Total Injuries | 12 | 15 | 5 | 4 | 8 | 12 | 8 | **** | 4 | |||||||
| Shifts Lost | 6,000 | 104 | 130 | 182 | 32 | — | 6,018 | **** | 110 |
The number of incidents as reflected in the Total Injury Frequency Rate decreased in the Quarter following a significant change in the approach to safety management. Under the direction of the Chief Operating Officer, who was appointed in May 2024, management initiated a comprehensive review of safety procedures and safety training following which several measures have been implemented. These include the appointment of a new Group SHE Manager who introduced a proactive approach to safety which focuses on leading safety indicators such as the number of planned job observations and workplace condition inspections and an increase in the number of employees who have been trained to reinforce hazard awareness and compliance with safety protocols. The increase in near-misses reported in the Quarter reflects an improvement in safety-reporting culture with the objective to identify and introduce proactive risk mitigation measures.
26
4.1.2. Bilboes oxide mine
| Bilboes Oxide Mine Safety Statistics | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Classification | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | ||||||||
| 2023 | 2023 | 2023 | 2023 | 2024 | 2024 | 2024 | 2024 | |||||||||
| Minor Injury | — | 2 | — | — | 2 | — | — | — | ||||||||
| Lost time injury | — | — | — | — | — | — | — | — | ||||||||
| Occupational illness | — | — | — | — | — | — | — | — | ||||||||
| Total | — | 2 | — | — | 2 | — | — | — | ||||||||
| Incidents | 9 | 15 | 2 | 4 | 1 | 1 | 5 | **** | 6 | |||||||
| Near misses | 2 | 5 | 2 | — | — | — | 1 | **** | 1 | |||||||
| Total Injury Frequency Rate | — | — | — | — | — | — | — | — |
Bilboes oxide mine has been on care and maintenance since the end of the third quarter of 2023.
4.1.3 Environment – Blanket
One significant environmental incident was recorded on December 22, 2024, when heavy rainfall caused an overflow from the return water dam of the new TSF, which is currently under construction. The overflow was neutralised and has not resulted in environmental pollution. The Zimbabwean Environmental Management Agency was notified of the incident, and management measures implemented.
During the Quarter, total water abstraction from surface and groundwater sources was 643,034m^3^, and 198,742m^3^ of water recycled from the TSF was recycled back to the plant. Recycled water comprised 62.7% of the plant water use in the Quarter (317,199m^3^). Recycled water has increased significantly during 2024, as water recycling has improved due to the lining of the new TSF. The lining prevents seepage to groundwater, facilitating the flow of recycled water and prevents pollution.
Water management
| Quarterly water consumption (000's m ^3^ ) | Q1 | Q2 | Q3 | Q4 | ||||
|---|---|---|---|---|---|---|---|---|
| 2024 | 2024 | 2024 | 2024 | |||||
| Water abstracted | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Surface water (Blanket dam) | 303 | 357 | 380 | 410 | ||||
| Ground water | 192 | 208 | 185 | 233 | ||||
| Water abstracted (surface and ground) | 496 | 566 | 564 | 643 | ||||
| Recycled water | 143 | 191 | 188 | 199 | ||||
| Water consumption | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Plant water usage | 279 | 327 | 345 | 317 | ||||
| Underground, gardens, car wash, losses | 186 | 195 | 171 | 166 | ||||
| Domestic consumption | 188 | 242 | 228 | 156 | ||||
| Total water use | 652 | 764 | 744 | 640 |
27
4.2. Social Investment and Contribution to the Zimbabwean Economy - Blanket
Blanket’s investment in CSR projects which is not directly related to the operation of the mine or the welfare of Blanket’s employees, the payments made to the Gwanda Community Share Ownership Trust (“GCSOT”) in terms of Blanket’s indigenisation, and payments of taxation and other non-taxation charges to the Zimbabwe Government and its agencies are set out in the table below.
| Payments to the Community and the Zimbabwe Government | |||||
|---|---|---|---|---|---|
| (’000’s) | |||||
| Period | CSR Investment | Payments to GCSOT | Payments to Zimbabwe Government (excl. royalties) | Royalties | Total |
| Year | 2,147 | 2,000 | 15,354 | 4,412 | 23,913 |
| Year | 35 | – | 12,319 | 3,522 | 15,876 |
| Year | 50 | – | 7,376 | 2,455 | 9,881 |
| Year | 12 | – | 10,637 | 2,923 | 13,572 |
| Year | 5 | – | 11,988 | 3,498 | 15,491 |
| Year | 4 | – | 10,140 | 3,426 | 13,570 |
| Year | 47 | – | 10,357 | 3,854 | 14,258 |
| Year | 1,689 | 184 | 12,526 | 5,007 | 19,406 |
| Year | 1,163 | 948 | 16,426 | 6,083 | 24,620 |
| Year | 888 | 1,200 | 12,060 | 7,124 | 21,272 |
| Q1 | 258 | – | 3,769 | 1,471 | 5,498 |
| Q2 | 326 | – | 3,356 | 1,856 | 5,538 |
| Q3 | 336 | 450 | 2,725 | 2,096 | 5,607 |
| Q4 | 571 | 100 | 2,021 | 1,893 | 4,585 |
| Year | 1,491 | 550 | 11,871 | 7,316 | 21,228 |
| Q1 | 344 | – | 2,609 | 1,893 | 4,846 |
| Q2 | 376 | 225 | 2,322 | 2,432 | 5,355 |
| Q3 | 245 | 500 | 2,286 | 2,374 | 5,405 |
| Q4 | 326 | 700 | 4,731 | 2,382 | 8,139 |
| Year | 1,291 | 1,425 | 11,948 | 9,081 | 23,745 |
All values are in US Dollars.
CSR initiatives fall under seven pillars of education, health, women empowerment and agriculture, environment, charity, youth empowerment and conservation.
The main CSR programme at Blanket relates to the refurbishment of the maternity clinic, the primary and secondary schools, and the youth centre at Sitezi, which is located approximately 17km from Blanket. Activities in respect of this project during the Quarter include:
| • | Completing renovations for the administration block and delivery of equipment and accessories for the science laboratory at Sitezi Secondary School. |
|---|---|
| • | The waiting mothers’ shelter at Sitezi clinic is 99% complete with only one door for people with disabilities awaiting installation. Two flush public toilets were also constructed at the clinic with the water and sewer reticulation also connected. |
| --- | --- |
| • | Inverters and batteries were installed and tested for the solar plant which is meant to supply the clinic, secondary school and primary school with power. The solar power will help maintain cold chains for medical supplies and samples at the clinic and provide lighting and energy supply to the clinic and the two schools for powering IT equipment such as computers and interactive boards. Commissioning of the solar plant is planned for the first quarter of 2025. |
| --- | --- |
| • | Work on upgrading the Sabiwa Stadium to meet the requirements of the Zimbabwe Football Association for Division 1/Premier Soccer League stadia in the country continued with the construction of four sportsperson’s and two official's changing rooms completed. The buildings constructed at the stadium now await connection to the national grid and this is set for first quarter of 2025. The stadium, which had been used exclusively by Sabiwa High School, will cater for footballing activities for the entire local community. |
| --- | --- |
28
| • | 31 student attachees benefited from work experience, each attachee receiving a living allowance during their attachment. After the end of the Quarter, Blanket launched its first graduate recruitment programme; to date over four thousand applications have been received for 30 places. |
|---|---|
| • | Blanket undertook road repairs of a section of the old Gwanda Road, which had been undercut by artisanal miners, posing danger of road collapse; and |
| --- | --- |
| • | Wellness kits were donated to the Ministry of Mines, and a $400,000 dividend was paid to GCSOT in the Quarter and $1.1 million in the Year. GCSOT has a 10% shareholding in Blanket. |
| --- | --- |
4.3. Gold Production - Blanket
A table showing Quarterly gold production since Q1 2023:
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |
|---|---|---|---|---|---|---|---|---|
| 2023 | 2023 | 2023 | 2023 | 2024 | 2024 | 2024 | 2024 | |
| Gold Produced (oz) | 16,036 | 17,436 | 21,772 | 20,172 | 17,050 | 20,773 | 18,992 | 19,841 |
Gold production at Blanket for the Quarter was 19,841 ounces and 76,656 ounces for the Year.
4.3.1 Mining Operations – Blanket
The table below shows tonnes broken and hoisted from Blanket in the Quarter and the preceding 7 quarters.
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |
|---|---|---|---|---|---|---|---|---|
| (Tonnes 000's) | 2023 | 2023 | 2023 | 2023 | 2024 | 2024 | 2024 | 2024 |
| Broken ore | 176.6 | 201.2 | 222.0 | 226.9 | 191.4 | 203.0 | 228.0 | 229.0 |
| Hoisted ore | 166.6 | 180.6 | 200.1 | 203.8 | 158.1 | 198.3 | 202.3 | 213.5 |
Tonnes broken and hoisted in the Quarter and Year increased compared to the comparative periods after the introduction of revised management structures which increased the direct supervision of underground mining, tramming and hoisting activities. In December, 89,727 tonnes of ore were hoisted which was a monthly mine production record. (Differences between tonnes mined and hoisted in any reporting period reflect the accumulation/diminution of broken ore which is in transit underground.)
The improved rate of mining and hoisting in the Quarter exceeded milling capacity, which meant that at the end of the Quarter 8,487 tonnes of ore were stockpiled on surface, representing approximately 3.7 days of target mill throughput. Management intends to maximise mine production with a view to further building the size of the ore stockpile to create a buffer to absorb unforeseen interruptions to mining activities.
29
Strong mine performance has continued into 2025, as set out below:
| Blanket Mine: tonnes broken and hoisted | January | February | ||||||
|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |||||
| Broken ore | 75,963 | 62,538 | 67,769 | 63,943 | ||||
| Hoisted ore | 68,880 | 45,394 | 67,151 | 55,152 |
Mine production in the first two months of 2025 was marginally better than expected; at the end of February the surface stockpile of ore had increased to 13,540 tonnes.
4.3.2 Milling Operations - Blanket
| Blanket - Production Statistics | |||||
|---|---|---|---|---|---|
| Year | Tonnes milled | Gold Head <br> (Feed) grade | Gold Recovery | Gold Produced | |
| (t) | (g/t Au) | (%) | (oz) | ||
| Year | 2021 | 665,628 | 3.36 | 93.9 | 67,476 |
| Q1 | 2022 | 165,976 | 3.69 | 94.1 | 18,515 |
| Q2 | 2022 | 179,118 | 3.71 | 93.9 | 20,091 |
| Q3 | 2022 | 198,495 | 3.53 | 93.6 | 21,120 |
| Q4 | 2022 | 208,444 | 3.37 | 93.7 | 21,049 |
| Year | 2022 | 752,033 | 3.56 | 93.8 | 80,775 |
| Q1 | 2023 | 170,721 | 3.11 | 93.8 | 16,036 |
| Q2 | 2023 | 179,087 | 3.22 | 94 | 17,436 |
| Q3 | 2023 | 208,902 | 3.46 | 93.7 | 21,772 |
| Q4 | 2023 | 211,730 | 3.17 | 93.6 | 20,172 |
| Year | 2023 | 770,440 | 3.25 | 93.8 | 75,416 |
| Q1 | 2024 | 175,101 | 3.23 | 93.9 | 17,050 |
| Q2 | 2024 | 208,682 | 3.31 | 93.7 | 20,773 |
| Q3 | 2024 | 205,975 | 3.07 | 93.4 | 18,992 |
| Q4 | 2024 | 207,721 | 3.18 | 93.6 | 19,841 |
| Year | 2024 | 797,479 | 3.20 | 93.6 | 76,656 |
| January | 2025 | 68,102 | 3.21 | 93.6 | 5,988 |
| February | 2025 | 61,362 | 3.13 | 93.7 | 5,794 |
797,479 tonnes of ore were milled in the Year, which was a record achievement for Blanket and represents approximately 95% of the maximum milling capacity of 838,000^^tonnes per annum. Milling operations continued strongly into 2025 after an extended plant shutdown in early January 2025 to allow for enhanced plant maintenance. In January an average of 2,348 tonnes per day were milled compared to approximately 2,279 tonnes per day in 2024.
The feed grade in the Quarter was lower than budget due to the continued effect of a fall of ground early in the third quarter of 2024 in a high-grade pillar area. As a result of this incident, mining activities in similar areas were suspended as a safety precaution. During the Quarter, after further evaluations, it was determined that mining could resume in pillar areas with improved primary support and accordingly, development to provide access to pillar areas was re-started. Gold recovery in the Quarter was consistent with previous quarters.
Gold production in January and February was better than expectations – largely due to better than expected tonnes mined and milled, offset somewhat by a lower feed grade.
30
4.4. Capital Projects - Blanket
The main capital projects are ongoing mine development to provide access to new mining areas and the completion of the new TSF.
On-mine capital development includes the infrastructure which will allow for three new production levels (26, 30 and 34 levels); a fourth level (38 level) is to be added in due course via a twin decline that commenced in February 2025. 3,710 meters of development were achieved in the Quarter against a plan of 5,362 meters. Development activity was adversely affected by the breakdown of a compressor for approximately 8 weeks due to a lightning strike.
The old TSF at Blanket has reached the end of its life. The design parameters for the new facility include:
| • | capacity of 13 million tonnes which is anticipated to be adequate for 14 years of production at current deposition rate; |
|---|---|
| • | “upstream” design, due to the limited space; |
| --- | --- |
| • | clear water dam and tailings facility have a double lining (geotextile and clay liner) and polyurethane liner respectively to avoid contamination of ground water; |
| --- | --- |
| • | the design includes new piping and new pumps for a gland service water and return water system with instrumentation; |
| --- | --- |
| • | new boreholes for monitoring around the facility; and |
| --- | --- |
| • | a waste embankment between the TSF and the village for dust prevention. |
| --- | --- |
The anticipated cost of the new TSF is $25.1 million which will be incurred over a period of 3 years (2024: $11.4 million, 2025: $5.4 million and 2026: $8.3 million).
The TSF is being built on a modular basis to spread the cost over a longer period, and to ensure that the first phase could receive material before the old TSF reached its full capacity. Work on the TSF commenced in March 2023, the first phase of the project was completed at the end of February 2024 and deposition on the new TSF commenced on October 30, 2024. All of Blanket’s tailings have been deposited on the new facility from the beginning of 2025.
Refer to section 4.9 for the 2025 capital expenditure.
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4.5. Indigenisation
As set out in previous MD&As, transactions that implemented the indigenisation of Blanket (which expression in this section and in certain other sections throughout this MD&A refers to the Zimbabwe company that owns Blanket) were completed on September 5, 2012 following which Caledonia owned 49% of Blanket*.*
Following the appointment of President Mnangagwa in 2017, the requirement for gold mining companies to be indigenised was removed by a change in legislation with effect from March 2018. On November 6, 2018, the Company announced that it had entered into a sale agreement with Fremiro Investments (Private) Limited (“Fremiro”) to purchase Fremiro’s 15% shareholding in Blanket for a gross consideration of $16.7 million, which was to be settled through a combination of the cancellation of the loan between the two entities which stood at $11.5 million as at June 30, 2018 and the issue of 727,266 new shares in Caledonia at an issue price of $7.15 per share. This transaction was completed on January 20, 2020 following which Caledonia has a 64% shareholding in Blanket and Fremiro held approximately 6.3% of Caledonia’s enlarged issued share capital.
As a 64% shareholder, Caledonia receives 64% of Blanket’s dividends plus the repayment of vendor facilitation loans which were extended by Blanket to certain of the indigenous shareholders. The outstanding balance of the facilitation loans at December 31, 2024 was $10.3 million (December 31, 2023: $13.4 million). The facilitation loans (including interest thereon) are repaid by way of dividends from Blanket; 80% of the dividends declared by Blanket which are attributable to the beneficiaries of the facilitation loans are used to repay such loans and the remaining 20% unconditionally accrues to the respective indigenous shareholders. The dividends attributable to GCSOT, which holds 10% of Blanket, were withheld by Blanket to repay the advance dividends which were paid to GCSOT in 2012 and 2013.
The final payment to settle the advance dividend loan to GCSOT was made on September 22, 2021. Dividends to GCSOT after that date are unencumbered.
The facilitation loans are not shown as receivables in Caledonia’s financial statements in terms of IFRS. These loans are effectively equity instruments as their only means of repayment is via dividend distributions from Blanket. Caledonia continues to consolidate Blanket for accounting purposes. Further information on the accounting effects of indigenisation at Blanket is set out in note 5 to the Consolidated Financial Statements.
4.6. Bilboes
Sulphides feasibility study
The main objective at Bilboes is to construct a large, multiple open-pit operation to extract and process sulphide mineralisation. A feasibility study in respect of the Bilboes sulphide project was prepared by the previous owners which targeted mine and processing operations to produce an average of 168,000 ounces of gold per annum over a 10-year life of mine. Caledonia does not regard this previous study as a current feasibility study.
In June 2024, Caledonia announced a revised development plan for Bilboes in the form of a Preliminary Economic Analysis (“PEA”).
Caledonia has been progressing work on a feasibility study for the Bilboes project, initially due for publication in Q1 2025. While ongoing work confirms the project has attractive economics, several new developments plus higher indicated capital costs have prompted the Company to defer the finalisation of the feasibility study in order to undertake further work to allow for the evaluation of key, and certain new, factors that we expect could positively impact project economics. These include:
| ● | Engage with the authorities to explore the potential sale of concentrate to reduce up front capital expenditure by removing the need for a BIOX processing circuit; |
|---|
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| ● | Potential relocation of the Tailings Storage Facility to a more suitable location, including considering a location on Caledonia’s Motapa property, immediately adjacent to Bilboes, which, due to the topography of the area, could reduce initial construction costs; |
|---|---|
| ● | Incorporate Motapa into the Bilboes feasibility study, following the positive results announced in 2024 and in light of further exploration work being done this year; |
| --- | --- |
| ● | Re-assess a smaller-scale development approach, taking into account both economic returns and deliverability; |
| --- | --- |
| ● | Explore near-term revenue opportunities across the portfolio, including newly discovered potential to add new high grade ore sources for Blanket in the near term which may contribute to funding for Bilboes. |
| --- | --- |
Caledonia remains committed to maximising Caledonia’s net present value per share: this means identifying the optimal balance between growth and equity dilution, having regard to an acceptable degree of debt funding. Funding solutions are being progressed in tandem with work on the new feasibility study. It is anticipated that funding will include elements of non-recourse project funding, mezzanine funding and loans against Caledonia’s other assets. Finalisation of funding structures will only be possible after publication of the feasibility study and the timing will be subject to the timing imposed by prospective funders.
Oxide mining activities
In the fourth quarter of 2022, a small operation was started to mine and process oxide mineralisation at Bilboes. The oxide mining activities were restarted predominantly with the objective to generate cash flows to pay for the existing cost structures at Bilboes Holdings (Private) Limited (“Bilboes Holdings”). The costs arising from the oxide mining activities were higher than expected and gold production was lower than expected. The oxide mining activities were therefore placed on care and maintenance at the end of September 2023. Leaching of ore which has already been placed on the heap leach continued in the Quarter and had no material effect on Caledonia's financial performance. Leaching activities will continue as long as they cover the operating costs.
4.7. Zimbabwe Commercial Environment
Monetary Conditions
The current situation in Zimbabwe can be summarised as follows:
| • | Blanket produces dore gold that it is obliged to deliver to FGR, a subsidiary of the Mutapa Investment Fund (government owned entity), which refines the gold to a purity of 99.5% on a toll-treatment basis. With effect from April 2023, 25% of the resultant gold is sold to FGR and the remaining 75% is exported to a refiner of its choice outside Zimbabwe for final processing. During the Quarter, gold exports were sold to Al Etihad Gold FZCO and Stonex Financial Limited. The sale proceeds for the gold sold via the offshore refiners are paid in US Dollars to Blanket’s commercial bankers in Zimbabwe within 48 hours of delivery. Management believes this sales mechanism reduces the risk associated with selling and receiving payment from a single refining source in Zimbabwe. It also creates the opportunity to use more competitive offshore refiners, and it may allow for the Company to raise debt funding secured against offshore gold sales. 25% of Blanket's gold is sold to FGR at a price that reflects the prevailing London Bullion Market Association price and the official ZiG/USD exchange rate on the date of sale. Payment is made by FGR to Blanket in ZiG (from April 5, 2024) within 14 days of the sale. FGR deducts a refining fee of 1.24% from the ZiG sale proceeds; FGR collects half of the 5% royalty which is payable to the Government of Zimbabwe in physical gold which is deducted from the amount exported and the balance is paid in USD and ZiG proportionately to the revenue split between USD and ZiG (as discussed further below). |
|---|---|
| • | On January 6, 2025, the RBZ issued a Monetary Policy Statement which, inter alia, included provision that with immediate effect exporters such as Blanket are required to “surrender” 30% of their export proceeds in return for ZiG. This means the arrangement outlined above has changed such that Blanket exports 70% of its gold production and sells the remaining 30% to FGR for ZiG-denominated consideration. |
| --- | --- |
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| • | The interbank RTGS$/USD and ZiG/USD exchange rates at each quarter end and at the latest practicable date prior to the publication of this MD&A are set out below. | |
|---|---|---|
| Interbank Exchange Rates | ||
| --- | --- | --- |
| (RTGS$:US$1) | (ZiG:US$1) | |
| December 31, 2023 | 6,104.72 | |
| March 31, 2024 | 22,055.47 | |
| April 5, 2024 | 30,674.32 | 13.56 |
| June 30, 2024 | 13.70 | |
| July 31, 2024 | 13.79 | |
| August 8, 2024 | 13.80 | |
| September 30,2024 | 24.88 | |
| December 31, 2024 | 25.80 | |
| March 17, 2025 | 26.67 |
After a devaluation of approximately 80% at the end of the 3rd quarter of 2024, the interbank exchange rate was relatively stable during the Quarter.
Devaluation of the ZiG (RTGS$ replaced by the ZiG with effect from April 5, 2024) means that net monetary assets held in ZiG (previously RTGS$) will devalue in USD terms. In the ordinary course of its business, Caledonia has net ZiG-denominated assets comprising ZiG-denominated cash and receivables (primarily for the gold sold to FGR and VAT receivables) and ZiG liabilities (mainly comprising taxes payable). During the Year, Blanket incurred net realized foreign exchange losses of $8.8 million due to the devaluation of the RTGS$ and subsequently the ZiG. These losses adversely affected cash generated. To reduce the exposure to such losses, management has engaged in aggressive ZiG-denominated procurement to reduce its ZiG-denominated cash. This activity frequently results in Blanket making prepayments in respect of consumables and supplies denominated in RTGS$/ZiG, which also adversely affects cash generation.
ZiG cash balances at December 31, 2024 amounted to a USD equivalent of $0.2 million and $2.4 million at March 10, 2025.
Electricity supply
Blanket requires approximately 24MW of electricity power to maintain all mining and processing operations.
Blanket obtains approximately 20% of its power requirements from a captive solar plant, which is currently owned by Caledonia. The solar plant was commissioned in March 2023 at a cost of approximately $14.2 million. In general, the solar plant has operated better than anticipated. The solar plant does not provide any power at night and output is severely restricted if there is anything other than unbroken sunshine. Solar output was adversely affected in the Quarter by an increased incidence of cloudy days due to the onset of the rainy season. In addition, during the Quarter, a component failure impaired the production capacity of the solar plant for 8 days, which coincided with a period of very poor performance due to overcast conditions. 6,613Gwh of power was provided by the solar plant in the Quarter. As discussed in section 4.8, Caledonia has reached agreement for the sale of the solar plant; Blanket will continue to have an exclusive long-term supply contract for 100% of the electricity produced by the solar plant.
In the ordinary course of events, the remainder of Blanket’s power is imported into Zimbabwe (mainly from Mozambique) and is “wheeled” through the Zimbabwe grid to Blanket. Due to the very poor condition of the grid - particularly in Blanket’s location – the grid power provided to Blanket is subject to frequent interruptions. In addition, power obtained through the grid is subject to frequent surges and dips in voltage which, if not controlled, cause severe damage to Blanket’s electrical equipment.
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In recent years, Blanket has increased its diesel generating capacity to 18MW of installed capacity which was sufficient to maintain all operations and capital projects but only on a stand-by basis. Electricity produced by diesel generators costs approximately 45 cents/kWh compared to 12.8 cents/kWh for grid power.
During the Quarter, due to the various supply issues noted above, Blanket consumed 30.5GWh of power compared to a plan of 32.1GWh. The shortfall in power availability adversely affected development activities (as noted elsewhere) because the available power was used primarily to maintain production.
The following initiatives have been implemented by Blanket to alleviate the power challenges:
| • | 2019: installed two 10MVA auto tap transformers on the Zimbabwe Electricity Supply Authority ("ZESA") supply line to protect equipment at No. 4 shaft and the main metallurgical plant from voltage fluctuations on the incoming grid supply (cost: $0.488m). |
|---|---|
| • | 2019: two further 10MVA auto tap transformers were installed to protect equipment at Central shaft (cost: $0.488m). |
| --- | --- |
| • | Caledonia’s 12.2MWac solar plant was commissioned in early 2023 at a cost of $14.2 million and provides approximately 20% of Blanket’s average daily electricity demand. |
| --- | --- |
| • | In April 2023 Blanket entered into a power supply agreement with the Intensive Energy Users Group (“IEUG”) and the Zimbabwean power utility to allow the IEUG to obtain power outside of Zimbabwe and strengthen the Zimbabwean power grid. As a result of this arrangement, Blanket has paid a lower tariff for energy supplied by IEUG but as noted above, it has not improved the power quality received at Blanket. |
| --- | --- |
| • | In November 2024 power factor correction equipment was installed at a cost of $1.5 million. In the long term this equipment is expected to reduce diesel consumption, although, as noted above, due to the other difficulties with power supply in late 2024, diesel consumption was higher than usual to compensate for poor supply from the solar plant and from the grid. However, the power factor correction equipment is expected to reduce penalty charges incurred by ZESA, which is expected to save approximately $1.2 million per annum. |
| --- | --- |
In addition to the above, the capital budget for 2025 includes provision to re-configure the Central shaft winder so that it uses less power: the capital cost of this exercise is approximately $2.4 million with an annual saving of approximately $1.2 million per annum. Investigations are under way to reduce Blanket's overall electricity consumption by using the available shafts and machinery more efficiently. Management is also evaluating other options to improve the overall quality of Blanket’s power supply to enhance operational resilience and reduce costs.
Water supply
Blanket uses water in the metallurgical process. Blanket is situated in a semi-arid region and rainfall typically only occurs in the period November to February. The 2024/2025 rainy season has been poorer than usual, and management is looking at ways to reduce consumption and find alternative sources which include boreholes.
Taxation
The main elements of the Zimbabwe tax regime insofar as it affects Blanket and Caledonia are as follows:
| • | A royalty is levied on gold revenues at a rate of 5% if the gold price is above $1,200 per ounce; a royalty rate at 3% applies if the gold price is below $1,200 per ounce. The royalty is allowable as a deductible expense for the calculation of income tax. |
|---|---|
| • | The 5% royalty is payable in the same proportions of currencies as revenues are received. From October 9, 2022, 50% of royalty payments are payable in gold. |
| --- | --- |
| • | Income tax is levied at 25.75% (2023: 24.72%) on taxable income as adjusted for tax deductions in the tax year. The main adjustments to taxable income for the purposes of calculating tax are the add-back of depreciation and most of the management fees paid by Blanket to CMSA. There is a deduction of 100% of all capital expenditure incurred in the year of assessment. As noted above, the royalty is deductible for income tax purposes. The calculation of taxable income is performed using financial accounts prepared in USD and split between USD and RTGS$ (from April 5, 2024, the ZiG) based on the currency in which the transactions are denominated. Large devaluations in the RTGS$ to the USD has reduced most of the deferred tax liability previously denominated in RTGS$. |
| --- | --- |
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Withholding tax is levied on certain remittances from Zimbabwe i.e. dividend payments from Zimbabwe to the UK and payments of management fees from Blanket to CMSA.
4.8. Solar plant
As noted in section 4.7, Blanket suffers from unstable grid power and power outages. In late 2019 Caledonia initiated a tender process to identify parties to make proposals for a solar project to reduce Blanket’s reliance on grid power. In 2020, the Caledonia board approved the project, and the Company raised $13 million (before commission and expenses) to fund the project through the sale of 597,963 shares at an average price of $21.74 per share. Caledonia’s 12.2 MWac solar plant was connected to the Blanket grid in November 2022 and was fully commissioned in early February 2023 at a construction cost of $14.3 million. At the date of the approval of this MD&A the plant provides approximately 20% of Blanket’s total electricity requirement during the day.
In December 2022, the Caledonia board approved a proposal for Caledonia Mining Services (Private) Limited (“CMS”) (which owns the solar plant) to issue bonds up to a value of $12.0 million in the form of loan notes (the “solar bonds”). The decision was taken to optimise the capital structure of the Group and provide additional debt instruments to the Zimbabwean financial market. The bonds have an interest rate of 9.5% payable bi-annually and have a tenor of 3 years from the date of issue. The bond repayments are guaranteed by the Company and up to the date of this MD&A $11.5 million of bonds have been issued to Zimbabwean commercial entities. In anticipation of the sale of the solar plant, the bonds have been transferred to CHZ so that CHZ is now the issuer of the bonds.
Due to the unique operating environment in Zimbabwe and Caledonia’s significant in-country expertise, Caledonia opted to build the solar plant using its own resources rather than relying on an external party to build and own the solar plant using its financial resources and selling the resultant power to Blanket on a long-term contract. Accordingly, Caledonia constructed the solar plant using its own financial resources at a cost of $14.3 million. As the solar plant is now fully commissioned and is working as planned, Caledonia no longer needs to own the solar plant, provided it retains long term access to the power it produces. On September 30, 2024 Caledonia signed a conditional sale agreement for the entire issued share capital of its Zimbabwe subsidiary, Caledonia Mining Services (Private) Limited ("CMS"), which owns and operates the solar plant and supplies power to Blanket Mine. CMS is to be sold to CrossBoundary Energy Holdings ("CBE") for $22.35 million, payable in cash, and the power generation of the solar plant will continue to be sold to Blanket Mine by way of a power purchase agreement.
Upon completion of the sale, Caledonia will realise a profit on the $14.3 million construction cost. Completion of the sale will return capital to Caledonia at a key moment in the Company's growth trajectory while it retains the exclusive energy off take, ensuring approximately a fifth of Blanket Mine's daily electricity requirement continues to be met by renewable power.
The solar plant asset was re-classified as held for sale as at December 31, 2024 in the Consolidated Financial Statements.
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4.9. Opportunities and Outlook
Production and cost guidance
Blanket production guidance for 2025 is 73,500 - 77,500 ounces. This reflects the current mine scheduling, which anticipates that Blanket will continue to mine lower-grade areas.
Blanket on-mine cost per ounce is forecast at $1,050 - $1,150 (up from $950 - $1,050 in 2024), while all-in sustaining cost ("AISC") per ounce is expected to be in the range of $1,690 - $1,790 (up from $1,450 - $1,550 in 2024). Cost guidance for 2025 reflects higher labour, HR and IT expenses and increased sustaining capital expenditure. Increased expenditure in these areas is part of the ongoing modernisation of the business, building a foundation for the extended operating life at Blanket, growth arising from Bilboes and Motapa, and future profitability. The 2025 on-mine cost per ounce includes $20 per ounce of ESG cost; 2024 ESG cost of $1.3 million (approximately $17 per ounce) was not part of the guidance range for 2024.
Capital expenditure
The total capital expenditure at Blanket for 2024 amounted to $27.9 million versus a planned expenditure of $30.8 million. The capital expenditure remained as per previous guidance with the difference of $2.9 million moved to 2025 with no impact on operations at Blanket due to the change in timing of the expenditure.
The 2025 capital expenditure programme totals $41.0 million, with $34.1 million allocated to Blanket and $6.3 million at Bilboes and Motapa. These investments aim to modernise operations and improve mining efficiency at Blanket. While there will be short-term cost pressures, the long-term goal is to reduce costs, improve profitability, and ensure the continued success of Blanket over its recently increased life of mine. All expenditure will be funded from cash generation and cash reserves with no anticipated impact on the dividend.
Key projects include:
| • | Blanket development: $6.6 million to carry out planned development of 4,663 meters including an additional 590 meters to improve flexibility and access higher grade areas from the previously reported life of mine plan. |
|---|---|
| • | Efficiency improvements: $3.4 million for energy-saving initiatives at Blanket. |
| --- | --- |
| • | Operational resilience: $4.8 million to complete the TSF and $0.7 million for IT upgrades as the business continues to modernise its systems and processes. |
| --- | --- |
| • | Exploration and project development: $5.8 million towards exploration at Motapa, building on promising 2024 results and to complete the feasibility study at Bilboes. |
| --- | --- |
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| Caledonia Group 2025 Capital Expenditure Forecast | |
|---|---|
| 'million | |
| Capital development | 6.6 |
| Milling | 6.8 |
| Engineering | 11.0 |
| Mineral resource management | 1.8 |
| IT Infrastructure | 1.1 |
| Safety, health and environment | 2.5 |
| Mining and other capital equipment | 1.4 |
| Rollovers from 2024 | *2.9 |
| Total Blanket | 34.1 |
| Motapa drilling | 2.8 |
| Bilboes | 3.0 |
| Other | 1.1 |
| Total Group | 41.0 |
All values are in US Dollars.
^*The roll-overs were revised to $2.9 million from the published $3.7 million in the RNS number 1641T, dated January 14, 2025.^
The 2026 and 2027 capital expenditure at Blanket is expected to be $22 million and $27.2 million respectively. The capital expenditure in these years includes expenditure to increase capital development to increase production flexibility, which should result in more consistent grades and increase the stockpile over time. It also includes an on-surface conveyor belt that is expected to reduce ore handling cost and IT and drilling equipment that is planned to improve decision making and availability of information as well as reduced exploration cost in the future. Additional raise bore holes and ventilation are planned to improve safety underground in these years.
Further expenditure at Bilboes and Motapa will depend on the strategic prioritisation of the uses of cash and the outcome of further work on the feasibility study and exploration respectively.
Dividend
Caledonia has paid a quarterly dividend since 2012. Dividends have typically been declared and paid in January, April, July and October of each year. To streamline the administration relating to board processes, future dividends are expected to be declared at the same time as the publication of quarterly results i.e. in the middle of March, May, August, and November. Payment of the dividends will be subject to the usual regulatory and administrative procedures i.e. approximately four weeks after the dividend has been declared.
This change noted above relates only to the timing of future dividends; this change does not denote any change in the Company's dividend policy.
A dividend of 14 cents per share was declared on March 24, 2025 and will be paid on April 17, 2025.
The board will consider the continuation of the dividend as appropriate in line with other investment opportunities and its prudent approach to risk management including with regard to Blanket maintaining a reasonable level of production; receiving payment in full and on-time for all gold sales; being able to make the necessary local and international payments and being able to replenish its supplies of consumables and other items.
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Strategy
The immediate strategic focus is to:
| ● | maintain production at Blanket at the targeted range of 73,500 - 77,500 ounces for 2025 and at a similar level for 2026, whilst modernising operations and improving mining and operational cost efficiencies; |
|---|---|
| ● | Engage in further exploration at Blanket with the objectives to upgrade existing inferred mineral resources to measured and indicated mineral resources and to commence exploration on other target areas on Blanket’s lease area which are outside the current mine footprint; complete the Caledonia feasibility study on the Bilboes sulphide project, continue to evaluate funding solutions, raise funding and commence development of the sulphide project; and |
| --- | --- |
| ● | continue with exploration activities at Motapa with a view to identifying sulphide and oxide resources. Any sulphide resources would eventually be treated as part of the Bilboes sulphide project; oxide resources may create short term, relatively short-life revenue opportunities. |
| --- | --- |
5. EXPLORATION
Caledonia’s exploration activities are focussed on Blanket and Motapa.
Blanket
Deep exploration drilling continues at Blanket primarily targeting the down dip continuations of the Eroica, Blanket and AR South mineralised zones. In addition to these zones, drilling has been planned to commence on the down-dip continuation of the Lima mineralised zone.
Results of the drilling program continue to be highly encouraging for the continuation of the mineralised zone to 34 level and beyond with intersected grades and widths generally higher than included in the life of mine. Further results from the deep drilling at Blanket are anticipated to be published during the second quarter of 2025. The drilling could potentially upgrade confidence in the mineral resource classification from inferred to indicated mineral resources. Deeper drilling serves to increase the delineation of the mineralised zones thereby potentially increasing the inferred mineral resource base.
Blanket is commencing a surface exploration project within the area held under the Blanket mining lease. The program is targeting the Banded Iron Formation (“BIF”) which strikes in a north-westerly direction and has been exploited at the nearby Vumbachikwe and Sabiwa gold mines.
Initial work comprised Induced Polarisation (“IP”) and Ground Magnetic (“GM”) surveys. These surveys delineated anomalous zones over a 600-metre strike length which subsequent surface reconnaissance mapping and pitting has shown to be quartz filled shear zones hosted within the BIF. Grab samples from shallow surface pits returned assay values ranging between 0.59 and 32.12 grammes per tonne from analysis at the Blanket assay laboratory.
Planned activities for 2025 include:
| • | Surface trenching at 50 metres spacing over the strike length of 600 metres. |
|---|---|
| • | Reverse Circulation (“RC”) drilling focused on defining the potential of shallow oxide mineral resources. |
| --- | --- |
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Motapa
Surface trenching at Motapa progressed significantly during the Quarter with total meters trenched now standing at 21,041 metres from a planned 22,212 metres. Trenching continues to define zones of anomalous gold mineralisation for follow up drilling activities.
At the end of the Quarter, total RC metres drilled stood at 5,443 metres against a budget of 4,663 metres, and 5,317 samples were submitted of which 4,882 assays have been received, while diamond drilling metres drilled stood at 4,143 metres against a budget of 3,978 metres, and 4,300 samples were submitted of which 4,251 assays have been received.
The 2025 work program for Motapa is targeting the shallow oxide potential at Mpudzi, and the deeper sulphide mineralisation below the historic oxide pits at Motapa North. Trenching will continue on areas not covered by trenching undertaken in 2024. Caledonia announced encouraging results from its recent exploration programme at Motapa in 2024. These results will be updated in due course as new information becomes available.
The Mpudzi area has the potential to host shallow oxide mineral resources within a BIF lithology. A shallow RC drilling program will be executed during 2025 with the aim of defining oxide mineral resources which may be amenable to heap leaching at the adjacent Bilboes property.
The old, decommissioned heap leach pad at Motapa will undergo a series of Particle Size Distribution (“PSD’s”) to determine the remaining gold content in various size fractions. The pad comprises material ranging from sub 1mm particles up to approximately 150mm in size. Depending on the efficiency of the pad, the irrigation and the silicification of the material, there may be leachable gold remaining in the coarser fractions. Crushing of the oversize fraction may provide a source in the near term of leachable ore for the adjacent Bilboes leaching facility.
$2.8 million has been earmarked for exploration activities at Motapa in 2025.
6. LIQUIDITY AND CAPITAL RESOURCES
An analysis of Caledonia’s capital resources is set out below.
| Liquidity and Capital Resources | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (’000’s) | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| As at | Dec 31 | Mar 31 | Jun 30 | Sep 30 | Dec 31 | ||||||||||||
| 2023 | 2024 | 2024 | 2024 | 2024 | |||||||||||||
| Net cash and cash equivalents | (3,192 | ) | (11,032 | ) | (14,160 | ) | (1,366 | ) | (7,635 | ) | **** | (8,668 | ) | ||||
| Net working capital | 18,758 | 14,096 | 9,320 | 21,511 | 18,368 | **** | 15,923 |
All values are in US Dollars.
Movements in Caledonia’s net cash, overdraft and working capital and an analysis of the sources and uses of Caledonia’s cash are discussed in section 3 of this MD&A. The overdraft and term facilities are held by Blanket with Zimbabwean banks with security and repayment periods as detailed in section 3.3.5. The Group’s liquid assets as at December 31, 2024 plus anticipated cash flows exceeded its planned and foreseeable commitments as set out in section 7.
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7. OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL COMMITMENTS AND CONTINGENCIES
There are no off-balance sheet arrangements apart from the facilitation loans which are not reflected as loans receivable for IFRS purposes (refer to note 5 of the Consolidated Financial Statements). The Company had the following contractual obligations at December 31, 2024:
| Payments due by period | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (’000’s) | |||||||||
| Falling due | 1-3 Years | 4-5 Years | After 5 Years | Total | |||||
| Trade and other payables | 26,647 | – | – | – | 26,647 | ||||
| Provisions | 80 | 502 | 313 | 8,769 | 9,664 | ||||
| Capital expenditure commitments | 2,503 | – | – | – | 2,503 | ||||
| Loans and borrowings | 1,464 | 1,654 | – | – | 3,118 | ||||
| Lease liabilities | 121 | 234 | – | – | 355 | ||||
| Cash-settled share-based payments | 634 | 411 | – | – | 1,045 | ||||
| Loan notes (solar bonds) | 855 | 9,618 | – | – | 10,473 |
All values are in US Dollars.
These amounts do not include interest accrued on December 31, 2024.
The capital expenditure commitments relate to materials and equipment which have been ordered by CMSA and which will be sold to Blanket.
Other than the proposed investment in the exploration properties, the committed and uncommitted investment will be used to maintain Blanket’s existing operations and implement the final development relating to the Central shaft and the further stages of the new TSF as discussed in section 4.4 of this MD&A.
Committed and uncommitted purchase obligations are expected to be met from the cash generated from Blanket’s existing operations and Blanket’s existing borrowing facilities. The Group leases property for its administrative offices in Jersey, Harare, Bulawayo and Johannesburg; following the implementation of IFRS 16 the Group recognises the liabilities for these leases. As of December 31, 2024, the Group had liabilities for rehabilitation work on Blanket – if the mine is permanently closed – at an estimated discounted cost of $5.3 million (December 31, 2023: $4.7 million), Motapa’s undiscounted liability amounted to $0.9 million (December 31, 2023: $1.4 million), and Bilboes’ undiscounted liability amounted to $3.5 million (December 31, 2023: $4.4 million).
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8. ADJUSTED EARNINGS PER SHARE
“Adjusted earnings per share” is a non-IFRS measure **** which management believes assists investors to understand the Company’s underlying performance. The table below reconciles “adjusted earnings per share” to the profit/loss attributable to owners of the Company shown in the financial statements which have been prepared under IFRS. Adjusted earnings per share is calculated by deducting payments to Blanket Employee Trust Services (Private) Limited (“BETS”) (the company that owns 10% of Blanket’s shares on behalf of an employee trust), foreign exchange gains and losses, impairments, deferred tax and inventory write-downs from the profit attributable to the owners of the Company.
| Reconciliation of Adjusted earnings (loss) per share (“Adjusted EPS”) to IFRS Profit attributable to owners of the Company | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (’000’s, unless otherwise indicated) | |||||||||||
| 12 months ended<br><br> <br>December 31 | |||||||||||
| 2023 | 2024 | 2023 | |||||||||
| ^*Restated^ | ^*Restated^ | ||||||||||
| Profit for the period (IFRS) | 7,516 | (2,589 | ) | **** | 23,054 | (4,840 | ) | ||||
| Non-controlling interest share of loss for the period | (1,651 | ) | (813 | ) | **** | (5,155 | ) | (3,022 | ) | ||
| Profit (loss) attributable to owners of the Company | 5,865 | (3,402 | ) | **** | 17,899 | (7,862 | ) | ||||
| BETS adjustment | (134 | ) | (124 | ) | **** | (389 | ) | (262 | ) | ||
| Earnings (loss) (IFRS) | 5,731 | (3,526 | ) | **** | 17,510 | (8,124 | ) | ||||
| Weighted average shares in issue (thousands) | 19,269 | 18,832 | ****** | 19,201 | 18,626 | ||||||
| IFRS EPS (cents) | 29.7 | (18.7 | ) | ****** | 91.2 | (43.6 | ) | ||||
| Add back (deduct) amounts in respect of foreign exchange movements | |||||||||||
| Realised net foreign exchange losses | 6 | 22 | **** | 30 | 27 | ||||||
| Unrealised net foreign exchange gains | (865 | ) | 220 | **** | (23 | ) | (609 | ) | |||
| - less tax | – | (40 | ) | – | (40 | ) | |||||
| Adjusted IFRS profit excl. foreign exchange | 4,872 | (3,324 | ) | **** | 17,517 | (8,746 | ) | ||||
| Weighted average shares in issue (thousands) | 19,269 | 18,832 | ****** | 19,201 | 18,626 | ||||||
| Adjusted IFRS EPS excl. foreign exchange (cents) | 25.3 | (17.6 | ) | ****** | 91.2 | (47.0 | ) | ||||
| Add back (deduct) amounts in respect of: | |||||||||||
| Reversal of BETS adjustment | 134 | 124 | **** | 389 | 262 | ||||||
| Impairment of property, plant and equipment | 1,711 | – | **** | 1,711 | 877 | ||||||
| Impairment of exploration and evaluation assets | 385 | – | **** | 385 | – | ||||||
| Retirement costs | (21 | ) | – | **** | 2,214 | – | |||||
| Tax on Retirement costs | 5 | – | **** | (572 | ) | – | |||||
| Deferred tax | 1,428 | 3,419 | **** | 2,179 | 5,208 | ||||||
| Non-controlling interest portion of deferred tax, impairment, retirement costs and the tax on retirement costs | (318 | ) | (353 | ) | **** | (612 | ) | (639 | ) | ||
| Fair value losses on derivative financial instruments | 335 | 529 | **** | 831 | 1,119 | ||||||
| Adjusted profit | 8,531 | 395 | **** | 24,042 | (1,919 | ) | |||||
| Weighted average shares in issue (thousands) | 19,269 | 18,832 | ****** | 19,201 | 18,626 | ||||||
| Adjusted EPS (cents)@ | 44.3 | 2.1 | ****** | 125.2 | (10.3 | ) |
All values are in US Dollars.
@ Restated - exchange losses and gains on the ZiG and RTGS$ have been retrospectively included in Adjusted EPS due to the recurring nature of these losses.
*Refer to section 10 and section 11 of the MD&A.
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9. RELATED PARTY TRANSACTIONS
Key management personnel are persons responsible for planning, directing and controlling the activities of an entity, and include directors and executive officers of the Company. The amounts paid by the Company for the services provided by key management personnel who are related parties have been determined by negotiation among the parties and are reviewed and approved by the Company’s board. These transactions are in the normal course of operation.
The Company has extended the consultancy agreement with Mr. Curtis, a former director of the Company and Chief Executive Officer, until December 31, 2025 with a monthly fee of $12,500. During the Quarter, the Company expensed $37,500 (2023: $37,500) in advisory service fees to Mr. Curtis and $150,000 for the year (2023: $150,000).
$2,500 rent was paid to Fulbon Investments (Pvt) Limited per month from January 2023, of which Mr. Gapare is a director, which supplied office accommodation to CHZ.
10. RESTATEMENT OF COMPARATIVE INFORMATION
In preparation of the Consolidated Financial Statements for the year ended December 31, 2024, an error was identified in the accounting interpretation related to the calculation of deferred tax liabilities at Blanket. The non-cash restatement does not affect income tax calculations or submissions.
In October 2018, the RTGS$ was introduced in Zimbabwe at 1:1 to the USD. The RTGS$ was deemed the only legal tender in Zimbabwe, and all liabilities held previously were to be denominated in RTGS$. In 2019, Practice Note 26 (as described in note 3.1.5 of the Consolidated Financial Statements) required all income tax returns to be calculated in RTGS$ for transactions occurring prior to introducing the multi-currency regime in 2023.
Blanket’s deferred tax liabilities were incorrectly calculated in RTGS$ and accounted for as a monetary item where RTGS$ deferred tax temporary differences were translated to the USD functional currency. Gains related to the devaluation of the deferred tax liabilities were realised in profit or loss. Transactions from 2019 to 2022 affected the deferred tax liability calculation and continued to be denominated in RTGS$ in accordance with the legislated tax regime after the multi-currency regime was introduced. The accounting for the deferred tax liabilities in RTGS$ with the translation to USD remained consistent in all previous consolidated financial statements, yet the carrying value of the deferred tax liabilities should have been denominated in USD rather than RTGS$. The error, stemming from January 1, 2019, was corrected from the earliest period presented in the Consolidated Financial Statements, as presented in the table below.
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| Consolidated statements of profit or loss and other comprehensive income | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ('000's) | December 31, 2022 | ||||||||||||||||
| Adjustment | As restated | As previously reported | Adjustment | As restated | |||||||||||||
| Net foreign exchange (loss) profit | (2,550 | ) | (4,222 | ) | (6,772 | ) | 4,411 | (10,088 | ) | (5,677 | ) | ||||||
| Tax expense | (12,810 | ) | – | (12,810 | ) | (16,770 | ) | 2,411 | (14,359 | ) | |||||||
| (Loss) profit for the year | (618 | ) | (4,222 | ) | (4,840 | ) | 22,866 | (7,677 | ) | 15,189 | |||||||
| Total comprehensive income for the year | (1,240 | ) | (4,222 | ) | (5,462 | ) | 22,404 | (7,677 | ) | 14,727 | |||||||
| Non-controlling interests | 3,580 | (558 | ) | 3,022 | 4,963 | (1,013 | ) | 3,950 | |||||||||
| Basic (loss) earnings per share () | (0.24 | ) | (0.20 | ) | (0.44 | ) | 1.36 | (0.51 | ) | 0.85 | |||||||
| Diluted (loss) earnings per share () | (0.24 | ) | (0.20 | ) | (0.44 | ) | 1.35 | (0.50 | ) | 0.85 |
All values are in US Dollars.
| Consolidated statements of financial position (’000’s) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| January 1, 2023 | |||||||||||||
| Adjustment | As restated | As previously reported | Adjustment | As restated | |||||||||
| Retained loss | 63,172 | 33,971 | 97,143 | 50,222 | 30,307 | 80,529 | |||||||
| Non-controlling interests | 24,477 | (6,021 | ) | 18,456 | 22,409 | (5,463 | ) | 16,946 | |||||
| Deferred tax liabilities | 6,131 | 39,992 | 46,123 | 5,123 | 35,770 | 40,893 |
All values are in US Dollars.
11. INTERNAL CONTROLS OVER FINANCIAL REPORTING
11.1 Disclosure Controls and Procedures
Management, under the supervision of the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) designed disclosure controls and procedures (“DC&P”) to provide reasonable assurance that:
| ● | material information relating to the Company is made known to them by others, particularly during the period in which filings are being prepared; and |
|---|---|
| ● | information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by the Company under securities legislation is recorded, processed, summarised and reported within the periods specified. |
| --- | --- |
Management has evaluated the effectiveness of the Company’s DC&P as defined in National Instrument 52-109 - Certification of Disclosure in Issuer's Annual and Interim Filings for the period January 1, 2019 to December 31, 2024. As a result of this evaluation, the Company’s CEO and CFO concluded that the Company’s DC&P were not effective during these years. The design and operation of the Company’s DC&P were, therefore, not effective and did not provide reasonable assurance that all material information relating to the Company was reported due to the deferred tax liability error identified as described in section 10.
Identified material weaknesses
A material weakness is a deficiency, or a combination of deficiencies, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.
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In preparation of the Consolidated Financial Statements, management identified the prior period error as described in section 10 and determined that the restatement of financial information presented was necessary. Management has determined that the control over accounting for deferred tax liabilities did not operate effectively and constitutes a material weakness and requires remediation.
Status of the remediation plan
An appropriate IFRS review was not performed on deferred tax related to temporary differences for assets acquired from 2019 to 2022 at Blanket affecting reporting periods from January 1, 2019 to December 31, 2024. Although the calculation was reviewed and the IFRS interpretations were formed after consultation, the IFRS concepts applied were incorrect and not reconsidered in subsequent years up to the completion of the December 31, 2024 year-end. No amendments were made to IAS 12 from 2019 that would have resulted in the interpretation being reconsidered. Remediation efforts are ongoing and are expected to be completed in the second quarter of 2025. Going forward, management plans to reconsider critical accounting interpretations every 3 years.
Should these remedial measures be insufficient to address the material weakness described above, or additional deficiencies arise in the future, material misstatements in our interim or annual financial statements may occur in the future.
11.2 Changes in internal control over financial reporting
Except for the material weakness identified due to the deferred tax liabilities described above, there have been no changes in the Company’s ICFR that have materially affected or are reasonably likely to materially affect the Company’s ICFR during the period January 1, 2019 to December 31, 2024.
11.3 Limitation of DC&P and ICFR
All control systems contain inherent limitations, regardless of how well they are designed. As a result, management acknowledges that its ICFR will not prevent or detect all misstatements due to error or fraud. In addition, management’s evaluation of controls can provide only reasonable, not absolute, assurance that all control issues that may result in material misstatements, if any, have been detected.
12. CRITICAL ACCOUNTING ESTIMATES
Caledonia’s accounting policies are set out in the Consolidated Financial Statements which have been publicly filed on SEDAR+. In preparing the Consolidated Financial Statements, management is required to make estimates and assumptions that affect the amounts represented in the Consolidated Financial Statements and related disclosures. Use of available information and the application of judgement are inherent in the formation of estimates. Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Discussion of recently issued accounting pronouncements is set out in note 4 of the Consolidated Financial Statements. Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the Consolidated Financial Statements is included in the following notes:
12.1. Site restoration provisions
The site restoration provision has been calculated for Blanket based on an independent analysis of the rehabilitation costs as performed in 2024. For properties in the development phase the restoration costs are recognised at the current estimated cost of restoration undiscounted. For properties in the production phase assumptions and estimates are made when determining the inflationary effect on current restoration costs and the discount rate to be applied in arriving at the present value of the provision where the time value of money effect is significant. Assumptions, based on the current economic environment, have been made that management believes are a reasonable basis for estimating the future liability. These estimates take into account any material changes to the assumptions that occur when reviewed by management. Estimates are reviewed annually and are based on current regulatory requirements. Significant changes in estimates of contamination estimates, restoration standards, and techniques will result in changes to the provision from period to period. Actual rehabilitation costs will ultimately depend on future market prices for the rehabilitation. The final cost of the currently recognised site rehabilitation provision may be higher or lower than currently provided for.
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12.2. Exploration and evaluation (“E&E”) expenditure
Exploration and evaluation assets are tested for impairment before the assets are transferred to mine development, infrastructure and other assets or when an indicator of impairment is identified. Exploration and evaluations assets are not depreciated.
The Group also makes assumptions and estimates regarding the technical feasibility and commercial viability of the mineral project and the possible impairment of E&E assets by evaluating whether it is likely that future economic benefits will flow to the Group, which may be based on assumptions about future events or circumstances e.g., such as the completion of a feasibility study indicating construction, funding and economic returns that are sufficient. Assumptions and estimates made may change if new information becomes available. If information becomes available suggesting that the recovery of expenditures is unlikely, the amount capitalised is written off in profit or loss in the period the new information becomes available. The recoverability of the carrying amount of exploration and evaluation assets depends on the availability of sufficient funding to bring the properties into commercial production, the price of the products to be recovered and the undertaking of profitable mining operations. As a result of these uncertainties, the actual amount recovered may vary significantly from the carrying amount.
12.3. Income taxes
Significant estimates and assumptions are required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. Caledonia records its best estimate of the tax liability including any related interest and penalties in the current tax provision. In addition, Caledonia applies judgement in recognising deferred tax assets relating to tax losses carried forward to the extent that there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same taxable entity against which the unused tax losses can be utilised or sufficient estimated taxable income against which the losses can be utilised.
12.4. Impairment
At each reporting date, Caledonia determines if impairment indicators exist and, if present, performs an impairment review of the non-financial assets held in Caledonia. The exercise is subject to various judgemental decisions and estimates. Financial assets are also reviewed regularly for impairment.
12.5. Depreciation
Depreciation on mine development, infrastructure and other assets in the production phase is computed on the units-of-production method over the life-of-mine based on the estimated quantities of reserves (proven and probable) and resources (measured, indicated and inferred), which are planned to be extracted in the future from known mineral deposits. Where items have a shorter useful life than the life-of-mine, the mine development, infrastructure and other assets are depreciated over their useful life. Confidence in the existence, commercial viability and economical recovery of reserves and resources included in the life-of-mine plan may be based on historical experience and available geological information. This is in addition to the drilling results obtained by the Group and management’s knowledge of the geological setting of the surrounding areas, which would enable simulations and extrapolations to be done with a sufficient degree of accuracy. In instances where management can demonstrate the economic recovery of resources with a high level of confidence, such additional resources are included in the calculation of depreciation.
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12.6. Mineral reserves and resources
Mineral reserves and resources are estimates of the amount of product that can be economically and legally extracted. In order to calculate the reserves and resources, estimates and assumptions are required about a range of geological, technical and economic factors, including but not limited to quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity prices and exchange rates. Estimating the quantity and grade of mineral reserves and resources requires the size, shape and depth of orebodies to be determined by analysing geological data such as the logging and assaying of drill samples. This process may require complex and difficult geological assumptions and calculations to interpret the data. Estimates of mineral reserves and resources may change due to the change in economic assumptions used to estimate mineral reserves and resources and due to additional geological data becoming available during operations.
The Group estimates its mineral reserves (proven and probable) and mineral resources (measured, indicated and inferred) based on information compiled by a qualified person principally in terms of Canadian Securities Administrators’ National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and the United States Securities and Exchange Commission’s Subpart 1300 of Regulation S-K (“Subpart 1300”) relating to geological and technical data of the size, depth, shape and grade of the ore body and suitable production techniques and recovery rates. Such an analysis requires geological and engineering assumptions to interpret the data. These assumptions include:
| • | correlation between drill-hole intersections where multiple reefs are intersected. |
|---|---|
| • | continuity of mineralisation between drill-hole intersections within recognised reefs; and |
| --- | --- |
| • | appropriateness of the planned mining methods. |
| --- | --- |
The Group estimates and reports reserves and resources principally in accordance with Subpart 1300 and NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) – CIM Definition Standards for Mineral Resources and Mineral Reserves. Complying with the CIM code, NI 43-101 requires the use of reasonable assumptions to calculate the recoverable resources. These assumptions include:
| • | the gold price based on current market price and the Group’s assessment of future prices; |
|---|---|
| • | estimated future on-mine costs, sustaining and non-sustaining capital expenditures; |
| --- | --- |
| • | cut-off grade; |
| --- | --- |
| • | dimensions and extent, determined both from drilling and mine development, of ore bodies; and |
| --- | --- |
| • | planned future production from measured, indicated and inferred resources. |
| --- | --- |
Changes in reported mineral reserves and mineral resources may affect the Group’s financial results and position in several ways, including the following:
| • | asset carrying values may be affected due to changes in the estimated cash flows; |
|---|---|
| • | depreciation and amortisation charges to profit or loss may change as these are calculated on the unit-of-production method or where useful lives of an asset change; and |
| --- | --- |
| • | decommissioning, site restoration and environmental provisions may change in ore reserves and resources which may affect expectations about the timing or cost of these activities. |
| --- | --- |
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13. FINANCIAL INSTRUMENTS
13.1. Commodity risk
From December 2022 to December 2024, the Company had the following put options to hedge the gold price risk:
| Purchase date | Ounces hedged | Strike price | Period of hedge |
|---|---|---|---|
| December 22, 2022 | 16,672 oz | $1,750 | December 2022 to May 2023 |
| May 22, 2023 | 28,000 oz | $1,900 | June to December 2023 |
| December 19, 2023 | 12,000 oz | $1,950 | January to March 2024 |
| March 7, 2024 | 12,000 oz | $2,050 | April to June 2024 |
| April 10, 2024 | 12,000 oz | $2,100 | July to September 2024 |
| October 4, 2024 | 12,000 oz | $2,600 | October to December 2024 |
During February, 2025 the Company purchased Asian put options to hedge 43,439 ounces of gold, spread according to the planned production profile, over a period of eleven months from February to December 2025 at a strike price of $2,600 per ounce.
On September 29, 2023 and October 6, 2023 the Company purchased two gold purchase options of 1,000 ounces each at a market price of $1,875 and $1,841 per ounce.
The put options were entered into to protect the Company against gold prices lower than the strike price over the period hedged. The options are “out-of-the-money" put options which lock in a minimum price over the number of ounces that are subject to the hedge for an initial option price. These arrangements carry no further financial obligations, such as margin calls.
13.2. Credit risk
The carrying amount of financial assets as disclosed in the statements of financial position and related notes represents the maximum credit exposure. The trade receivable predominantly relates to gold bullion sold before the end of the Quarter and VAT receivables. The amount due in respect of bullion sales was settled shortly after year end.
13.3. Liquidity risk
All trade payables and the bank overdrafts have maturity dates that are repayable as set out in section 3.3.5.
13.4. Currency risk
A proportion of Caledonia’s assets, financial instruments and transactions are denominated in currencies other than the US Dollar. The financial results and financial position of Caledonia are reported in US Dollars in the Consolidated Financial Statements.
The fluctuation of the US Dollar in relation to other currencies will consequently have an impact upon the profitability of Caledonia and may also affect the value of Caledonia’s assets and liabilities and the amount of shareholders’ equity.
As discussed in section 4.7 of this MD&A, the ZiG is subject to variations in the exchange rate against the US Dollar. This may result in Blanket’s assets, liabilities and transactions that are denominated in ZiG being subject to further fluctuations in the exchange rate between ZiG and US Dollars. In addition, the Company may be subject to fluctuations in the exchange rate between the South African Rand and the US Dollar in respect of cash that is held in Rands in South Africa.
13.5. Interest rate risk
Interest rate risk is the risk borne by an interest-bearing asset or liability due to fluctuations in interest rates. Unless otherwise noted, it is the opinion of management that Caledonia is not exposed to significant interest rate risk as it has limited debt financing. Caledonia’s cash and cash equivalents include highly liquid investments that earn interest at market rates. Caledonia’s policy focuses on preservation of capital and limits the investing of excess funds to liquid term deposits in high credit quality financial institutions.
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14. SECURITIES OUTSTANDING
At March 24, 2025, being the last day practicable prior to the publication of this MD&A, Caledonia had 19,214,554 common shares issued and the following outstanding options to purchase common shares (“Options”) granted in equal amounts to each of the employees of a PR consultancy to the Company 3PPB LLC being P Chidley and P Durham:
| Name of option holder | Number of Options | Exercise Price | Expiry Date |
|---|---|---|---|
| P Chidley | 5,000 | USD 9.49 | 30-Sep-29 |
| P Durham | 5,000 | USD 9.49 | 30-Sep-29 |
| 10,000 |
On June 14, 2024, 5,000 options previously granted to P Chidley at an exercise price of US$7.35 were exercised for a total consideration of $36,750. The same number of options and on the same terms, granted to P Durham, were not exercised and expired in August 2024.
The OEICP allows that the number of shares reserved for issuance to participants under the OEICP, together with shares reserved for issue under any other share compensation arrangements of the Company, shall not exceed the number which represents 10% of the issued and outstanding shares from time to time.
15. RISK ANALYSIS
The business of Caledonia contains significant risk due to the nature of mining, exploration and development activities. Caledonia’s business contains significant additional risks due to the jurisdictions in which it operates and the nature of mining, exploration and development. Included in the risk factors below are details of how management seeks to mitigate the risks where this is possible.
| • | Liquidity risk: Caledonia currently has sufficient cash and operating resources, access to funding and continues to generate sufficient cash to cover all its anticipated investment needs. |
|---|---|
| • | Availability of foreign currency: The Company needs access to foreign currency in Zimbabwe so that it can pay for imported goods and equipment and remit funds to Group companies outside Zimbabwe. At prevailing gold prices and the current rate of production the Company has access to sufficient foreign currency to continue normal mining operations and to fully implement its investment plan as scheduled. No assurance can be given that sufficient foreign currency will continue to be available. |
| --- | --- |
| • | Exploration risk: The Company needs to identify new resources to replace ore which has been depleted by mining activities and to commence new projects. No assurance can be given that exploration will be successful in identifying sufficient mineral resources of an adequate grade and suitable metallurgical characteristics that are suitable for further development or production. |
| --- | --- |
| • | Development risk: The Company is engaged in the implementation of the Central shaft project as set out in section 4.4 of this MD&A, as well as other projects including in particular Bilboes. Construction and development of projects are subject to numerous risks including: obtaining equipment, permits and services; changes in regulations; currency rate changes; labour shortages; fluctuations in metal prices and the loss of community support. There can be no assurance that construction will commence or continue in accordance with the current expectations or at all. |
| --- | --- |
| • | Production estimates: Estimates for future production are based on mining plans and are subject to change. Production estimates are subject to risk and no assurance can be given that future production estimates will be achieved. Actual production may vary from estimated production for a variety of reasons including un-anticipated variations in grades, mined tonnages and geological conditions, accident and equipment breakdown, changes in metal prices and the cost and supply of inputs and changes to government regulations. |
| --- | --- |
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| • | Mineral rights: The Company’s existing mining lease, claims, licences, and permits are in good standing. The Company must pay fees etc. to maintain its lease, claims and licences. The Company may not make payments by the required date or meet development and production schedules that are required to protect its lease, claims and licences. |
|---|---|
| • | Metal prices: The Company’s operations and exploration and development projects are heavily influenced by the price of gold, which is particularly subject to fluctuation. Management regularly reviews future cash flow forecasts in the context of the prevailing gold price and likely downside scenarios for future gold prices. |
| --- | --- |
| • | Increasing input costs: Mining companies generally have experienced higher costs of steel, reagents, labour and electricity and from local and national government for levies, fees, royalties and other direct and indirect taxes. |
| --- | --- |
| • | Illegal mining: In previous years there were incidences of illegal mining activities on properties controlled by Blanket which resulted in increased security costs and an increased risk of theft and damage to equipment. Blanket has received adequate support and assistance from the Zimbabwean police in investigating such cases. Those properties most at risk from such activity had been sold. With new mining areas having been acquired by the Group the incidence and possibility of illegal mining has increased, and there have been minor instances of illegal mining at Bilboes and Motapa. The Group is receiving adequate support and assistance from the Zimbabwean police. |
| --- | --- |
| • | Electricity supply: Zimbabwe produces and imports less electricity than it requires and has insufficient funds to adequately maintain or upgrade its distribution infrastructure. This has resulted in frequent interruptions to the power supply at Blanket. Further information available in section 4.7. |
| --- | --- |
| • | Water supply: Blanket uses water in the metallurgical process, most of which is obtained from a nearby dam. Blanket is situated in a semi-arid area and rainfall typically occurs only in the period November to February. Management is assessing measures to reduce water consumption and to establish alternative sources of supply. |
| --- | --- |
| • | Zimbabwe Country risk: The commercial environment in which the Company operates is unpredictable. Potential risks may arise from: unforeseen changes in the legal and regulatory framework which means that laws may change, may not be enforced, or judgements may not be upheld; restrictions on the movement of currency and the availability of foreign currency at a realistic exchange rate to make payments from Zimbabwe which may result in continued foreign exchange losses being realised and/or local currency being used to procure goods and services at elevated prices in USD terms; risks relating to possible corruption, bribery, civil disorder, expropriation or nationalisation; risks relating to restrictions on access to assets and the risk that the Zimbabwe Government is unable to pay its liabilities to Blanket, including amounts due in respect of VAT refunds. Management believes that it has minimised such risks by complying fully with all relevant legislation, by obtaining all relevant regulatory permissions and approvals and by regular and proactive engagement with the relevant authorities. |
| --- | --- |
| • | Gold marketing arrangements: In terms of regulations introduced by the Zimbabwean Ministry of Finance in January 2014, all gold produced in Zimbabwe must be sold to FGR, a company which was previously owned by the RBZ and is now owned by the Mutapa Investment Fund (Zimbabwe's sovereign wealth fund). The Company has a mechanism whereby it sells 75% (now 70% following the recent change in foreign exchange "surrender" requirements) of its produced ounces to refiners outside of Zimbabwe. |
| --- | --- |
| • | Other gold industry risks: On June 27, 2023 the U.S. Department of State together with other U.S. government agencies issued an advisory in light of reports related to the role of illicit actors in the gold trade to (i) highlight the opportunities and specific risks raised by the gold trade across sub-Saharan Africa and (ii) encourage industry participants to adopt and apply strengthened due diligence practices to ensure that such malign actors are unable to exploit and benefit from the sector, which remains essential to the livelihoods of millions of people across sub-Saharan Africa. Caledonia acknowledges and concurs with the U.S. Department of States’ warning that without adequate due diligence and appropriate mitigating measures, an industry participant may inadvertently contribute to one or more of these risks, including conflict and terror financing, money laundering activities, sanctions evasion, human rights and labour rights abuses and environmental degradation. Caledonia has robust policies in place to counter such risks including, amongst other things: a Code of Business Conduct, Ethics and Anti-Bribery Policy, a Human Rights Policy and Customer AML/KYC Policy, and it encourages whistleblowing and grievance reporting in order to monitor compliance. Caledonia performs enhanced due diligence on significant suppliers and other counterparties (including, but not limited to, sanctions and political exposure checks), has established new and robust routes to market for its gold production (none of which, for the avoidance of doubt, is artisanal) and has scrutinised the new refineries to which it now sells its gold. The Company reports its ESG performance annually, disclosing key environmental data, supports artisanal miners in the form of tributing of gold claims (as well as the local community generally) and has adopted best practice in the construction of its new TSF. For more information in all of these areas, please refer to Caledonia’s ESG reports. |
| --- | --- |
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16. FORWARD LOOKING STATEMENTS
Information and statements contained in this MD&A that are not historical facts are “forward-looking information” within the meaning of applicable securities legislation that involve risks and uncertainties relating, but not limited to, Caledonia’s current expectations, intentions, plans, and beliefs. Forward-looking information can often be identified by forward-looking words such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “target”, “intend”, “estimate”, “could”, “should”, “may” and “will” or the negative of these terms or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Examples of forward-looking information in this MD&A include: implementation schedules for, and other uncertainties inherent in, the Central shaft project; production guidance; estimates of future/targeted production rates; planned mill capacity increases; estimates of future metallurgical recovery rates and the ability to maintain high metallurgical recovery rates; timing of commencement of operations; plans and timing regarding further exploration, drilling and development; the prospective nature of exploration and development targets; the ability to upgrade and convert mineral resources to mineral reserves; capital and operating costs; our intentions with respect to financial position and third party financing; future dividend payments; and the proposed sale of the solar plant. This forward-looking information is based, in part, on assumptions and factors that may change or prove to be incorrect, thus causing actual results, performance or achievements to be materially different from those expressed or implied by forward-looking information. Such factors and assumptions include, but are not limited to: failure to establish estimated resources and reserves, the grade and recovery of ore which is mined varying from estimates, success of future exploration and drilling programs, reliability of drilling, sampling and assay data, assumptions regarding the representativeness of mineralisation being inaccurate, success of planned metallurgical test-work, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, changes in government regulations, legislation and rates of taxation, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors.
Security holders, potential security holders and prospective investors should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. Such factors include, but are not limited to: risks relating to estimates of mineral reserves and mineral resources proving to be inaccurate, fluctuations in gold price and payment terms for gold sold to FGR, risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected geological or structural formations, pressures, power outages, fire, explosions, landslides, cave-ins and flooding), risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom the Company does business, inadequate insurance, or inability to obtain insurance, to cover these risks and hazards, employee relations, relationships with and claims by local communities and indigenous populations, political risk, risks related to natural disasters, terrorism, civil unrest, public health concerns (including health epidemics or outbreaks of communicable diseases such as the coronavirus (COVID-19)), availability and increasing costs associated with mining inputs and labour, the speculative nature of mineral exploration and development, including the risks of obtaining or maintaining necessary licenses and permits, diminishing quantities or grades of mineral reserves as mining occurs, global financial condition, the actual results of current exploration activities, changes to conclusions of economic evaluations, and changes in project parameters to deal with unanticipated economic or other factors, risks of increased capital and operating costs, environmental, safety or regulatory risks, expropriation, the Company’s title to properties including ownership thereof, increased competition in the mining industry for properties, equipment, qualified personnel and their costs, risks relating to the uncertainty of timing of events including targeted production rate increase and currency fluctuations. Security holders, potential security holders and prospective investors are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Caledonia reviews forward-looking information for the purposes of preparing each MD&A; however, Caledonia undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.
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17. QUALIFIED PERSON
Mr. Harvey (NHD Economic Geology, MGSSA, MAIG) is the Company’s qualified person as defined by Subpart 1300 and NI 43-101. Mr. Harvey is responsible for the technical information provided in this MD&A except where otherwise stated. Mr. Harvey has reviewed the scientific and technical information included in this document and has approved the disclosure of this information for the purposes of this MD&A.
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