Caledonia Mining Share Discussion Threads

[stemis] 03/11/2014 10:00

That didn't seem to go down too well.

The company shouldn't have much trouble holding the dividend. It costs around C$3m a year and the company has C$25m in cash held outside Zimbabwe (equivalent to 29p a share). It's also worth bearing in mind that Caledonia charges a management fee to the Zimbabwean subsidiary and trades with it (supplying it with operating materials etc.) which together generated around C$3.0m in 2013 (although the figure was only $0.3m in 2012).

Dividend yield is currently 7.5%

[proactivest] 03/11/2014 08:35

Video Interview

Mark Learmonth, Vice President, Investor Relations and Corporate Development at Caledonia Mining (LON:CMCL, TSE:CAL), explains the thinking behind the increased investment in the Blanket gold mine in Zimbabwe and the decision to suspend dividend payments.

[gwr7] 17/10/2014 12:46

I warned you what was coming back in August when you could have got out at 60p. Complacent management here sat on cash for too long. Those buying for dividend are locking cash up for years. OK you may get your money back if they maintain the dividend for that long but Blanket will have been worked out by then.

[badtime] 14/10/2014 09:58

Ooops i spoke to soon

[stemis] 14/10/2014 08:55

Not a great trading update but yield and cash should support share price.

[badtime] 10/10/2014 21:29

sp has held up well considering the rout in the mining sector etc

[338] 12/9/2014 08:45

8gggggggg,

Depending on how low it will be and how long it will last... some people believe the gold price will be around US$1100 by Christmas but other believe US$1500...

Cash cost for operating CMCL in Q2 was $624 and dividend cost is 8 times covered by cash resources. CMCL can survive for selling gold at US$1100

Of course lower earning will reduce the generated net cash but should not affect dividend. That's way the management has committed to guarantee dividend next year, which is about 6% yield at share price of 100 canadian cents.

[8gggggggg] 11/9/2014 17:50

What will be the damage done by low gold price to earnings. ??
Opinions please

[338] 11/9/2014 14:54

this looks like the start of breakout

[338] 10/9/2014 21:48

US$1.07 NASDAQ, CANADA $1.20, equal to 67p for CMCL... meaning breakout with next stop 110p imho

[338] 10/9/2014 07:20

US$0.96 nasdaq, canada $1.06, equal to 60p in the UK

[liam wilson] 13/8/2014 15:19

Caledonia Mining Is Still Throwing Off Plenty Of Cash, Despite Recent Revisions To Guidance Today, 2:43 PM
The leading website for news on junior mining companies and commodities

[gwr7] 12/8/2014 12:32

I think some people have a misconception that the local Zimbabweans own Caledonia shares. They own 51% of the Blanket mine which is a subsidiary of the company you have shares in. Once they've paid off the loan they control 51% of the Blanket profit. Obviously they won't take all of the free cash. They'll draw a cash dividend as profitable businesses usually reinvest and/or retain part of their profits. Whereas Caledonia used to get 100% of the Blanket dividend, in future they'll get 49%. In other words their income on a like for like basis is halved due to indigenisation so they sought to double production to make up for that but I don't think that plan is going to work. Hope that helps.

[joan of arc] 12/8/2014 11:59

Igbert, I took a look at the terms of the Indiginisation and as a non accountant I found it all too complicated. At approx 50m shares the divi H1 should be about $1.5m. On the books it shows as $1.887m. Is the difference the 20% due to the Zimbabweans? And if so does that mean that there are another 50m shares in "Treasury" and once the loans are fully paid then there will be 100m+ shares in existence with a need pay $6m/year as divi at the current rate? I hope that all makes sense.

[igbertsponk] 12/8/2014 11:34

They don't lose half the profit, but will have to start paying out the cash on the Zimbabwean shares that currently is being retained in the business to reduce the loan made to snaffle the shares.
So no impact on profit but an impact on cash.

[joan of arc] 12/8/2014 11:28

GWR, I didn't understand your point about losing half the profit once the loans are repaid.
If I understand things correctly the Zimbabweans already have 51% of the shares. The loan should be being repaid from 80% of there entitled dividends, ie 40% is not actually paid out. I can't see where this shows up in the accounts. If it is "Proceeds from shares issued" then that figure is way too low. Likewise CMCL is supposed to be earning LIBOR + 10% on the loans which should be about another $3m and I can't see where that shows up either. Or have I got it all wrong?

[gwr7] 12/8/2014 08:28

I'm no longer invested here having sold down since the mid-July profit warning. The announcement today confirms my unease. I've said before the company needs to run to stand still and it now looks like they're on a conveyor belt going the wrong way. Once the indigenous loans are paid off they'll lose half the profit. To counter that they planned to double production. The passage below tells me the production targets will be cut further so this is effectively ex-growth. I was invested for the dividend but settled for a capital gain. For me the main problem was they slept on their cash for too long.


"Since this plan was initiated, the gold price has fallen from approximately US$1,700 per ounce to the current level of approximately US$1,300 per ounce, and projections for future gold prices have also been significantly reduced. Gold production at Blanket has been lower than anticipated and taxes and regulatory fees in Zimbabwe have increased. Blanket mine remains cash generative however, the combined effect of these factors means that the rate of cash generation at Blanket is lower than anticipated. Accordingly, management at Blanket and Caledonia is currently reviewing the medium term capital investment programme at Blanket. The revised programme is expected to be finalised in Q4 of 2014 and may result in revisions to the rate of increase in Blanket's production."

[badtime] 15/7/2014 20:51

i thought the share price held up well considering the early sells...out but will watch

[338] 15/7/2014 15:00

the price drop is good buying opportunity imho... currently $1.15 in canada or 63p....

[338] 15/7/2014 10:18

3koz down is not a big deal considering higher price of gold in the last few months and for the rest of the year...

It's still very under value so I think CMCL will keep going up to £1 and beyond before christmas this year...

[mr macgregor] 15/7/2014 09:53

There is an inverse relationship between on-mine cash costs per ounce and production. They're working harder for less as they increase throughput to the mill to try to make up for the lower grades. It's not rocket science. The point is they need to double production to make up for the loss of half the profit when the locals take their 51% share of the company. They don't need setbacks.

[chipperfrd] 15/7/2014 09:39

Guidance is 3,000 oz down from the 48koz previously guided - so hardly a massive problem! 45koz will equal the production over 2012 & 2013.

I don't see why 'costs will undoubtedly rise' as costs/tonne milled have been pretty consistent for 4.5 years now.

At an Ev/OPCF of a miserly 0.9x !! they are hardly over-valued.

[igbertsponk] 15/7/2014 09:33

Yup, but you have to assume they are now rock solid on the 45,000 ounces for the year and should outperform. Not to hit that level would make them look like right eejits.