Caledonia Mining Q3 Earnings Call Highlights

Key Points

• Caledonia cut its 2026 production guidance to 69,000–72,500 ounces after producing just over 49,000 ounces in the first nine months. Equipment shortages and processing issues at Blanket weighed on third-quarter output, though October production and grades improved after repairs and upgrades.
• Higher gold prices lifted quarterly revenue 10% and gross profit 14%, but EBITDA fell 16% to $28 million as lower production pushed costs higher; a $12.9 million noncash derivative loss also weighed on results.
• The company secured a $150 million interim financing facility for its Bilboes project and began earthworks, while pursuing broader project financing. Caledonia targets first gold at the end of 2028, with peak annual production expected at 200,000 ounces.

Caledonia Mining NYSEAMERICAN: CMCL reported third-quarter gold production of just over 17,000 ounces, as equipment shortages and processing problems at its Blanket mine offset the benefit of higher gold prices.

Chief Executive Officer Mark Learmonth said the company had lowered its 2026 production guidance to 69,000 to 72,500 ounces after producing just over 49,000 ounces in the first nine months. The revised range implies a strong fourth quarter, he said.

Caledonia realized an average gold price of $4,134 an ounce during the quarter, up 20% from the comparable period, according to Chief Financial Officer Ross Jerrard. Revenue rose 10% and gross profit increased 14%, but EBITDA fell 16% to $28 million. For the first nine months, EBITDA was nearly $108 million.

Blanket production and recovery

Learmonth said a shortage of compressed air limited mining in deeper, higher-grade areas of Blanket. Four additional compressors had been ordered, but two were delayed by congestion at the port of Beira in Mozambique. Replacement compressors were commissioned at the end of October, he said.

Processing problems also reduced gold recovery. Changes to the gravity circuit sent more gold into the carbon-in-leach plant, where limited elution capacity prevented the company from recovering the additional material efficiently, Learmonth said. The company has stopped the gravity circuit from sending that material into the carbon-in-leach process and commissioned a new elution vessel on Oct. 16.

Blanket produced just under 7,000 ounces in October, an improvement on the third-quarter monthly pace, Learmonth said. The grade rose to 3.07 grams per ton from approximately 2.7 grams per ton in the third quarter. He added that the company had begun recovering gold retained in the plant.

Caledonia is also ramping up the Little Lima processing plant, which was recommissioned during the third quarter. Learmonth said accelerated development was improving access to higher-grade areas and that the company had built a stockpile of approximately 18,000 tons after moving to a seven-day working week.

The company reported no lost-time injuries during the quarter and had gone more than 500 days without one, Learmonth said.

Financial results and Bilboes funding

Jerrard said higher gold prices increased royalties, while lower production contributed to higher per-ounce costs. All-in sustaining costs rose 21% on an ounces-sold basis, and on-mine costs increased 23%.

A $12.9 million noncash derivative fair-value loss weighed on quarterly results, Jerrard said. The company recorded gains on the accounting in the first two quarters and remained ahead by $2.5 million for the nine-month period. Profit attributable to the company was just under $3 million for the quarter.

Cash and cash equivalents stood at $158 million at quarter-end, down just under $10 million during the period. The company declared another quarterly dividend of $0.14 per share, Learmonth said.

Caledonia also completed a $150 million interim financing facility for its Bilboes development project, comprising a $100 million term loan and a $50 million revolving credit facility from a syndicate of eight Zimbabwean banks. Jerrard said the facility would provide liquidity while the company pursued wider project financing, which it aims to close early in the new year.

Executive Director Victor Gapare said earthworks began at Bilboes in October, engineering work was advanced and orders had been placed for long-lead equipment. The project has 1.75 million ounces of proved and probable reserves and is expected to produce 200,000 ounces annually at peak, he said.

Learmonth said Caledonia was targeting first gold from Bilboes at the end of 2028, with 2029 as its first full production year. Asked about potential capital-cost increases, Gapare said procurement was still underway and that nothing was alarming at that stage.

Resource updates and exploration

Vice President of Technical Services Craig Harvey said measured and indicated underground resources at Blanket increased 22% to just under 2.2 million ounces. The increase reflected improved confidence in the resource estimate, he said. A revised life-of-mine plan and reserve conversion are expected to follow.

At Blanket’s K-Pits, Caledonia is preparing a trial heap-leach operation using approximately 10,000 tons of oxide material. Learmonth said the company could move toward full-scale processing, targeting throughput of about 40,000 tons a month, if the trial is successful.

At Motapa, adjacent to Bilboes, Caledonia reported a maiden measured and indicated resource of 379,000 ounces and an inferred resource of 131,000 ounces. Harvey said the 2026 exploration program is focused on infill drilling at Motapa North, with work planned at Motapa Central and South in 2027.

About Caledonia Mining (NYSEAMERICAN:CMCL)

Caledonia Mining Corporation Plc is a gold producer focused on Zimbabwe. Its principal operating asset is the Blanket Mine, an underground gold mine near Gwanda in the country's Matabeleland South province. The company produces gold for sale to refiners and other customers. Caledonia acquired an interest in Blanket in 2006 and later increased its ownership to 100%. It also owns the Bilboes gold project in Zimbabwe, which it acquired in 2022, and pursues development and exploration activities there.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.