• Dallaglio produced 1,345kg in the first half, giving Padenga a stronger operating base as the gold price drives a much larger increase in earnings
• Padenga’s profit after tax surged 212% to US$82.75 million as higher gold prices amplified earnings from its mining operations
• Operating cash flow rose 126% to US$90.3 million, strengthening funding capacity for mine development, expansion and shareholder distributions

Harare- Padenga Holdings, Zimbabwe’s biggest listed gold producer has generated US$182.3 million in revenue from Dallaglio during the six months to June 2026, a 48% increase from the comparable period, as stronger gold prices combined with higher production to push the mining business deeper into the group’s earnings structure.

Dallaglio produced 1,345kg of gold during the first half, up 4% from 1,299kg in the same period last year, while gold sales volumes increased 13% to 43,228 ounces from 41,528 ounces.

 “Production increase was due to stronger mined grades, improved plant recoveries and continuing investment in mine development, drilling and operational optimisation,” Sibanda, the group’s chairperson said in a statement accompanying the half-year financials.

The operating numbers provide the foundation for a much larger financial movement at group level. Padenga's revenue from continuing operations increased 44% to US$187.74 million, while EBITDA rose 110% to US$100.82 million and profit after tax increased 212% to US$82.75 million. Operating cash flow increased 126% to US$90.26 million, giving the earnings increase substantial cash support.

The gap between production growth and earnings growth is the central feature of the results. Gold output increased only 4%, yet Dallaglio revenue increased 48%, while group profit after tax more than tripled. The explanation lies heavily in the gold-price environment, although the production increase and operational improvements have allowed Padenga to capture more of that price movement through a larger volume of gold sold.

Dallaglio's average realised gold price increased sharply during the period, while sales volumes also rose. The combination gave the mining business considerably more revenue from each additional ounce produced and provided the operating leverage behind the group's earnings expansion.

A gold producer can generate a dramatic increase in profit when the metal price rises substantially, even where production changes only modestly. The more durable component comes from additional ounces, improved recoveries, stronger grades and lower unit costs, because those factors remain within the operating control of the mining business and can continue to generate earnings after the commodity price cycle changes.

Padenga's first-half results contain evidence of both forces. The company produced 1,345kg of gold, an increase of 46kg from the first half of 2025. That is equivalent to roughly 43,240 ounces, close to the reported 43,228 ounces sold. The increase is modest in percentage terms, yet it occurred while the company was investing in the mining assets that underpin future production.

Pickstone Peerless underground project had made progress against its development targets, including development metres, material handling and access infrastructure. At Eureka, the Cyclone Cluster Upgrade Project is expected to come online in November 2026, while the company is also advancing a new 5MW solar project at Eureka. The Pickstone underground project is being developed in phases, with the later phases intended to sustain production beyond the current mining horizon.

Those projects matter because Padenga is now operating in a market where the temptation to treat the current gold price as a permanent earnings base is particularly strong. The company's capital programme provides a way to separate commodity-price gains from operational gains: additional tonnes of ore processed, improved grades, higher recoveries and longer mine lives can continue contributing after the price environment normalises.

The comparison with other Zimbabwean producers illustrates the point. Caledonia Mining's Blanket Mine produced 32,127 ounces, or about 999kg, in H1 2026, 19% below the 39,741 ounces produced in the first half of 2025. Its realised gold price, however, rose 48% to US$4,502 an ounce, allowing revenue to increase 17% to US$142.3 million and profit after tax to rise 41% to US$48.9 million. Caledonia's all-in sustaining cost also increased 51% to US$2,715 an ounce, reflecting lower grades and higher costs during the period.

Padenga's mining operation therefore enters the comparison from a different operating position. Dallaglio increased production by 4% while Caledonia's Blanket reduced production by 19%. Padenga's earnings benefited from the same broad gold-price environment, but the production trajectory gave the group an additional source of earnings growth.

The difference becomes more apparent when looking at the operating base. Dallaglio's 1,345kg of H1 production was about 35% higher than Blanket's roughly 999kg. Mutapa Gold Resources, meanwhile, produced 1,826kg during the same six-month period, with Freda Rebecca accounting for about 70% of the group's production.

The comparison places Padenga within a small group of Zimbabwean producers operating at meaningful commercial scale. It also shows why production growth deserves as much attention as the headline earnings number.

Freda Rebecca's performance is particularly relevant because Mutapa has been investing heavily in expanding its gold portfolio. The company produced 1,826kg during H1 2026 and has been targeting between 3,400kg and 3,600kg for the full year, supported by investments at Shamva, Jena and Freda Rebecca.

Padenga's strategy is more concentrated around Dallaglio's assets, particularly Pickstone Peerless and Eureka. The company has used the stronger gold-price environment to increase investment in development and exploration while simultaneously distributing more cash to shareholders.

The balance between those two uses of capital is becoming increasingly important. Padenga generated US$90.26 million from operating activities during the first half, compared with US$39.89 million in the corresponding period. Capital expenditure was US$13.24 million, while net cash outflow from investing activities was US$5.25 million. The group ended June with net assets of US$231.62 million, up 65% from US$140.75 million a year earlier.

The cash-flow performance strengthens the quality of the earnings increase. Operating cash flow increased more than profit before tax, giving Padenga considerable internal liquidity to fund its mining programme. The company has therefore reached a point where the capital generated by the gold business can finance both development and shareholder distributions.

The interim dividend was increased to US$0.0319 per share from US$0.0115, a 177% increase. Basic earnings per share rose to US$0.1028 from US$0.0324, while the share price stood at US$1.12 at the reporting date.

The dividend decision places capital allocation directly alongside production growth. Padenga is distributing a larger portion of the wealth created during the current gold cycle while continuing to invest in the assets expected to generate future ounces.

That strategy will be tested through the second half. The company forecasts 2026 gold production to surpass the prior year's comparative performance, while management is advancing projects intended to improve the productive capacity of its existing mines. The Cyclone Cluster Upgrade at Eureka is scheduled for November, while the Pickstone underground project continues to move through its development phases.

The significance of those investments becomes clearer when the H1 production number is put against the full-year ambition. Padenga's Dallaglio operation produced approximately 43,230 ounces during the first half. That means the company has already delivered close to half of its targeted annual production range of 90,000 to 95,000 ounces. The second half therefore needs to produce roughly 46,800 to 51,800 ounces to reach the stated range.

That requirement is achievable within the operating profile already demonstrated by Dallaglio, although the second half will carry a higher production burden than the first. The performance of the underground development programme, the Eureka upgrade and the quality of mined ore will determine how much of the second-half target comes from additional ounces rather than simply favourable bullion prices.

The production target also gives shareholders a more useful measure for the next results cycle. If Padenga reaches or exceeds its 90,000–95,000-ounce target while maintaining the operational improvements described in the interim results, the current earnings expansion will have a stronger production component. If output remains close to the H1 run rate and profit continues to move primarily with the gold price, the earnings profile will remain more exposed to bullion-market conditions.

The distinction is already visible across the Zimbabwean gold sector. Caledonia's H1 production decline demonstrates how a producer can experience strong financial growth even when physical output is under pressure because the realised gold price has risen sharply. Blanket's H1 AISC increased to US$2,715 an ounce, while its realised price reached US$4,502. Caledonia expects stronger production in the second half as access to higher-grade areas improves, with 2026 guidance maintained at 72,000–76,500 ounces.

Padenga is coming from a different position because its H1 production increased and its mine development programme is expanding the operating base. The company's financial performance consequently provides an opportunity to examine whether the capital deployed into Dallaglio is producing the additional ounces needed to support a larger long-term earnings base.

The full ownership of Dallaglio also matters. This changes the role of mining within Padenga. The company originally developed a diversified identity around crocodile farming and gold mining. The current numbers show how far the balance has moved. Dallaglio generated US$182.34 million of revenue in H1 against group continuing-operations revenue of US$187.74 million, meaning the mining business accounted for roughly 97% of continuing-operations revenue during the period.

Padenga is consequently being valued increasingly as a gold producer with a crocodile business attached to it, rather than as a diversified group in which mining is one of several comparable earnings engines.

That makes the quality of Dallaglio's ounces central to the equity story. Higher grades helped the H1 production increase, while improved recoveries supported plant performance. Those gains need to be maintained as the company develops deeper and more complex sections of its mines. The capital programme therefore has two objectives: increasing production and preserving the economics of the existing operation.

The financial results provide some early evidence that the strategy is working. Dallaglio's revenue increased 48%, operating cash generation increased strongly and the group converted the stronger mining performance into a much larger earnings and asset base.

There is also a broader implication for Zimbabwe's gold industry. The current bullion-price environment is giving large-scale producers substantially more cash to reinvest in mines that require expensive underground development, plant upgrades and exploration. The companies that deploy that cash effectively can increase national formal gold production while extending the operating lives of their assets.

Padenga's Pickstone Peerless and Eureka investments fit into that wider capital cycle. The company is using current cash generation to develop underground resources, improve processing and expand its energy base. The success of those investments will eventually be visible through production rather than through the amount of capital committed.

The first half therefore gives investors two numbers to watch together: US$82.75 million of group profit after tax and 1,345kg of Dallaglio gold production. The first demonstrates the financial power of the current gold market. The second provides the operating base from which that financial performance is being generated.

Padenga's 212% profit increase is consequently a much bigger event than a conventional earnings beat, because the company is emerging from a multi-year mining expansion with full ownership of Dallaglio and a substantially stronger cash-generating capacity. Yet the earnings growth cannot be separated from the exceptional gold-price environment that lifted realised prices across the sector.

Padenga needs the investment in Pickstone Peerless, Eureka, exploration, processing and mine development to produce a larger and more resilient gold operation. The H1 production increase provides an early indication of that progress, while the 90,000–95,000-ounce annual target provides a measurable test for the second half.

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