- FY2024 Output Meets Expectations: 76,656 ounces fell within Equity Axis Research’s projections
- FY2025 Production Guidance Revised Lower: The company has revised its FY2025 production guidance to 73,500-77,500 ounces, down from previous estimates
- Increased Capital Expenditure Planned: To invest $41.8 million in FY2025, primarily to modernize operations and improve mining efficiency at Blanket
Harare- Caledonia Mining Corporation's FY2024 output of 76,656 ounces has fallen within analyst expectations, amidst a significant capital expenditure program of approximately $41.8 million earmarked for 2025.
This investment strategy is geared towards modernizing operations, enhancing mining efficiency, and solidifying the company's gold asset base.
The group's CEO, Mark Learmonth, highlighted that the Q4 and FY2024 gold production at Blanket was in line with expectations, demonstrating consistent operational performance.
The annual gold production exceeded the 2023 output of 75,416 ounces. Annual Blanket gold sales amounted to 76,271 oz, with Q4 sales totaling 17,734 oz.
Prior to the release of the FY2024 results, Equity Axis Research had projected that Caledonia's year-end output would be around 76,000 ounces, not more or less than that (https://equityaxis.net/post/18137/2024/11/can-caledonia-meet-its-gold-targets-by-year-end) citing the company's historical performance and year-to-date production.
We noted that achieving the upper end of the company's guidance range of 74,000 to 78,000 ounces would be challenging, but that the lower end of the range seemed too conservative given the company's performance.
Caledonia's 2025 capital expenditure program is allocated across several key initiatives, including $6.6 million for planned development at Blanket, which entails 4,663 meters of development, including an additional 590 meters to improve flexibility and access higher-grade areas.
Furthermore, $3.4 million has been allocated for energy-saving initiatives at Blanket, while $4.8 million will be dedicated to operational resilience enhancements, including the completion of the tailings storage facility and $0.7 million for IT upgrades.
Additionally, $5.8 million has been earmarked for exploration and project development at Motapa and Bilboes, building on promising 2024 results and completing the feasibility study at Bilboes.
The company's investment strategy is expected to be funded from cash generation and cash reserves, with no anticipated impact on the dividend.
Caledonia has provided production guidance for 2025, anticipating output of 73,500 to 77,500 ounces, reflecting the current mine scheduling and lower-grade ore extraction.
The forecast on-mine cost for 2025 is estimated at $1,050/oz to $1,150/oz, while the all-in sustaining cost is expected to range from $1,690/oz to $1,790/oz. These costs are influenced by increased labor, HR, and IT expenses, as well as higher sustaining capital expenditure.
The 2025 on-mine cost includes $20/oz of environmental, social, and governance cost, whereas the 2024 ESG cost of $1.3 million (approximately $17/oz) was not part of the guidance range for 2024.
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