Caledonia Mining Corporation “Production increase, cash positive” Steve Curtis, CEO

Commenting on the results for 2015, Steve Curtis, Caledonia Mining PLC (LON:CMCL) CEO said: “2015 was another challenging year due to the lower gold price.  Despite the tough environment, Blanket remained cash generative at the operating level.  Production in 2015 was 2.5 per cent higher than in 2014 and 2 per cent higher than target, at 42,806 ounces.

“Investment at the Blanket Mine increased from $6 million in 2014 to almost $17 million in 2015 due to the implementation of the Revised Investment Plan, which was announced in November 2014.  The objectives of the Revised Investment Plan are to:

·     increase production to approximately 80,000 ounces of gold in 2021;

·     further improve Blanket’s operational efficiency; and

·     enhance Blanket’s ability for further deep level exploration and development, thereby extending the life of mine.

“Implementation of the Revised Investment plan is on-track and within budget. During the year the Tramming Loop was completed, which allowed a sustained increase in tonnes produced in the second half of the year. 

“In the middle of March 2016, production from below 750 meters commenced, as planned, via the Number 6 Winze.  Production from below 750 meters is expected to increase progressively in the remainder of 2016 and 2017 and will contribute to the higher targeted production of approximately 50,000 ounces of gold in 2016 and approximately 65,000 ounces of gold in 2017. 

“Blanket achieved a creditable AISC of $1,038 per ounce of gold (2014: $969/oz), the increase being largely due to higher sustaining capital investment in 2015 compared to 2014. It is expected that the AISC per ounce will fall in 2016 as fixed costs are spread over higher production ounces and the cost reduction measures implemented in 2015 take effect. 

“The focus on resource development at Blanket increased in 2015. There were two resource upgrades in the Year as a result of which the total resource baseremained broadly unchanged, notwithstanding record production in 2015 in terms of tonnes mined.  Following the upgrades, measured and indicated resources increased from 55 per cent of the total resource base to 64 per cent.  Towards the end of the Year, new drilling machines were installed and commissioned as a result of which the drilling rate achieved in January and February 2016 increased to over 2,000 meters per month compared to the average achieved in 2015 of approximately 700 meters per month.       

“In February 2016 Caledonia’s shareholders approved, by an overwhelming majority, the proposal that Caledonia should migrate its tax and legal domicile from Canada to Jersey, Channel Islands.  This migration will be effected today and reduce the tax burden on Caledonia and its shareholders, and reduce the costs of tax compliance.

“I expect that 2016 will be a Transformational Year for Caledonia as the benefits of restructuring and investment become apparent and I look forward to updating the market accordingly.”

Caledonia Mining Corporation has told DirectorsTalk its operating and financial results for the fourth quarter and the year ended December 31, 2015.  All results are reported in United States dollars unless otherwise indicated.  Following the implementation of indigenisation in September 2012, Caledonia owns 49 per cent of the Blanket Mine in Zimbabwe.  Caledonia continues to consolidate Blanket and the operational and financial information set out below is on a 100 per cent basis unless indicated otherwise.

Financial and Operating Review

Shareholder Conference Call

A presentation of the 2015 results and outlook for Caledonia is available on Caledonia’s website (www.caledoniamining.com).  Management will host a “Question and Answer” call at 3pm British Summer Time.   Details for the call are as follows:

Date:  March 29, 2016

Time: 1500 London /1400 Johannesburg, Zurich, Frankfurt/1000 Toronto, New York