Yahoo Finance Caledonia Mining Corporation Plc (AMEX:CMCL) Q4 2023 Earnings Call Transcript
Caledonia Mining Corporation Plc (AMEX:CMCL) Q4 2023 Earnings Call Transcript April 3, 2024
Caledonia Mining Corporation Plc isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Camilla Horsfall: We're going to run through the presentation as always, and we will leave time for questions at the end. What we do ask though is if you do have a question, if you could just raise your hand and we will unmute you. We find that's a better format than the written Q&A. I'm now just going to pass you over to Mark and Chester who can run through the presentation.
Mark Learmonth: Thanks very much, Camilla. I'm Mark Learmonth, Caledonia's CEO. And I was going to give a few opening observations and comments before I hand over to Chester. It's fair to say 2023 was a challenging year. Most of the difficulty was encountered in the first half of the year with a difficult situation at Blanket mine and also the Bilboes oxides problem. Both of those are resolved and Q3 was a good quarter. Q4 started off reasonably well. It was sort of sideswiped towards the end of the quarter by a couple of unexpected things. But pretty much the bad news relating to 2023 was dealt within the first half. Having said that let's just run through this. So annual gold production at Blanket was just over 75,000 ounces, which was in line with guidance.
Gross profit for the year was $41.5 million, compared to nearly $62 million in the previous year. And that decrease was largely due to higher production costs, in particular at the Bilboes oxides mine in the early parts of the year. It should also be noted that 2023 performance, particularly the Q4 performance was adversely affected by a higher and work in progress. That was gold in a bar that hadn't been sold at the end of the year, just over 3,000 ounces. So that represents about $6 million of revenue and about $3 million of gross profit and that was sold in the first week of January. So that was just purely a timing issue. In terms of operating costs, we had expected higher labor and power costs, but they were somewhat higher than we'd even expected.
We are looking at measures to reduce our electricity consumption and to reduce our labor -- and to improve our labor efficiency. And that's certainly on the labor side, that's gone reasonably well since December 2023. On the electricity side, the issue is purely one of higher than expected usage. It's got nothing to do with pricing. And in fact, actually, our average unit pricing for electricity has come down. On the good side with the drilling program, our Blanket has yielded very positive results. We put out two news releases, one in July, I think and then the other one in January. And buried deep in the financial statements, you'll find a reference to the fact that on the back of that drilling, the life of minor Blanket has been extended from 2034 out to 2041, and that will be -- that statement will be followed up in due course with a revised resort resource and reserve table.
We maintained our quarterly dividend payable in April this year, which reflects the good start to 2024 and our confidence that the remainder of 2024 will be strong. We've received some preliminary feedback from the various consultants who are working on the bill based feasibility study. Management and the board are evaluating those results so that we can make the capital allocation decision. And we're pressing now quite very hard to get that work to a state of finality where it's capable of being published. Then as previously announced, Dana Roets, the Chief Operating Officer stepped out with effect from the end of February and we're now very, very close to announcing the appointment of his replacement. So just in terms of summary, I've already mentioned production.
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