Caledonia Mining (CMCL)

Business description

Caledonia Mining mines gold at its main operating asset, the 49%-owned Blanket gold mine in southern Zimbabwe. It is also progressing its understanding of a number of promising satellite projects close to Blanket.

Stock data

Market cap.£57.4m
Last close540.00p
High / Low (52 weeks)587.5p / 415.0p
Stock market listingLN, CN
Forecast net cash (US$m)17.3
Forecast gearing ratio (%)N/A
TeamResources - Mining
SectorMining

Price performance

%1m3m12m
Actual1.412.5(7.7)
Relative *7.514.9(8.2)

* % Relative to local index

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Company news

Investment summary

Q317 results announced on 13 November showed record gold production for the quarter from the Blanket gold mine in Zimbabwe, with 14,396oz produced at AISC of $773/oz, a 10% q-o-q reduction. As a result of this record production, third-quarter gross profit came in 7% higher q-o-q at US$7.2m, with net attributable profit to shareholders 179% higher at US$3.1m.

Last updated on 02/02/2018

Y/E Dec Revenue (US$m) EBITDA (US$m) PBT (US$m) EPS (c) P/E (x) P/CF (x)
2015A 49.0 9.0 5.1 40.0 18.9 9.6
2016A 62.0 23.3 19.6 106.9 7.1 3.1
2017E 68.0 24.5 21.0 129.3 5.9 2.7
2018E 78.7 29.8 25.0 148.4 5.1 3.0

Last updated on 24/01/2018

Latest video

Executive Interview - Caledonia Mining

Industry outlook

We have adjusted our base case valuation for Caledonia’s Q317 results, driven by an improved gold grade providing record gold production for the quarter of 14,936oz at cash operating costs of US$663/oz and all in sustaining cost (AISC) of US$827/oz. The average gold price realised fell slightly by 2% q-o-q from US$1,265/oz to US$1,238/oz. We have also included US$18m in total additional capex required for the central shaft’s depth extension. We assume that US$12m is spent over FY18 with the remaining US$6m spent during FY19 as the central shaft completes. Of most significance to our valuation is the adoption of our new gold price forecasts. Factoring in all these adjustments reduces our previous 933p base case valuation by 7% to 869p. We use a 10% discount rate to reflect general equity risk.

Last updated on 02/02/2018

Key management

Leigh Alan Wilson, Chairman
Steve Curtis, CEO
Mark Learmonth, CFO
Maurice Mason , Head of IR

Company address

Suite 4009
1 King Street West
Toronto
Ontario
M5H 1A1
Canada
+1 (416) 369-9835
View website