Caledonia Mining Share Discussion Threads

[pi0110] 07/10/2020 11:10

Anyone else perplexed why CMCL raised tge funds for their solar power plant in September of this year given that it is due to start in Q4 2021?

We should be throwing off cash like a drunken sailor on shore leave once the main shaft is commissioned in Q1 2021.

[melody9999] 06/10/2020 18:45

Clearly our Company felt that it was a material development that warranted an RNS, and clearly the Govt would have authorised the RNS, and the text.

Not sure how competitors will react to the news.

[stemis] 06/10/2020 09:26

CMCL always seem to be well placed in Zim. They navigated the Indigenous Act, the foreign currency shortage and the CV19 lockdown. I think they are ideally placed to benefit from the post Mugabe opening of the country, which desperately needs foreign investment. They've clearly got good connections, allowing them to cherry pick the best prospects. This sounds like a very positive development.

[mikkydhu] 06/10/2020 06:28

Today's RNS reads like a genuinely sharing relationship between the Govt of Zimbabwe and Caledonia Mining, and as long as noone is greedy everyone should benefit. Is it too much to hope that lessons (on both sides) have been learnt in Zimbabwe over the last few decades? Maybe CMCL will get to pick the best of the government's offerings.

Encouraging action in America yesterday.

[tightfist] 05/10/2020 09:44

Looks pretty sound overall. I guess the question is what the delay impact will be the short-term H1 2021? It doesn't change the outlook for LTH in my opinion. The Central Shaft commissioning timeline is better than I feared. NIAI, tightfist

[stemis] 05/10/2020 07:10

Well there you have it. Strong Q3 production and full year forecast upgraded by 2,000 oz. Production target of 80,000 oz reaffirmed for 2022 (which is the same as before the notification of delays to commissioning of the central shaft)

[dozey3] 03/10/2020 06:13

Probably they take the view that there are plenty of prospects in safer jurisdictions, which no doubt is reflected in the value proposition here.

[ntv] 02/10/2020 17:39

mikkydhu
Just hoping the Americans have got this wrong as the price is down well over 40% from the top and still falling though volume seems to have dropped off a bit
Certainly Q1 next year is going to be interesting
We have just got to be patient

[mikkydhu] 01/10/2020 17:56

NTV, I'm sure it will not be long before the timing is of diminishing importance, considering what is likely to come. I also added, some this morning and some this afternoon.

We should get the Q3 production update in the next two weeks or so. It can only be good news because they would not have increased the dividend today if it were otherwise.

Work on the new shaft, temporarily affected by Covid 19, has now resumed, and it will not be long before we get the resulting increased production.

They talk of further dividend increases as well as having enough cash for a new project (both to acquire it and, presumably, develop it). So they are very confident that the mine will be generating a lot of cash.

And there should be some reduction in payments for electricity once the solar power scheme gets under way.

It's a great story.

[ntv] 01/10/2020 17:33

Totally out of favour in the US at the moment
added a few more this morning
Timing not good

[dozey3] 01/10/2020 08:52

Agreed. It looks as if they’ve got the idea that the dividend is important to many investors, the more so since general interest rates are near zero.

[stemis] 01/10/2020 08:45

Looks like good news all round

[fredfishcake] 01/10/2020 06:46

Agreed, would be easy to miss the following if you assume (as per the title) that it's just increasing the divi...again!

"Central Shaft equipping on track to be completed in Q4 2020 and commissioning to be completed by end of Q1 2021"

"As we approach the end of the six-year investment programme at Blanket Mine, we anticipate that the rate of capital expenditure will begin to reduce in 2021. We expect the combination of rising production and declining capital investment to give us greater flexibility to consider further increases in the dividend in addition to possible investment in new projects."

[tightfist] 01/10/2020 06:40

Yes, slightly strange that the Central Shaft commissioning confirmation and timing was secondary to the dividend update.

[pi0110] 01/10/2020 06:37

Nice announcement. Dividend up 18% Q on Q and up 45% Y on Y.

Central shaft to be commisioned by Q1 2021.

[ntv] 08/9/2020 19:57

I worked it out that they raised the monies at $21 approx but guessing that was before what was effectively a profits warning (for 2021) caused by the new shaft completion date being delayed

[stemis] 07/9/2020 22:49

If that's the case then it hasn't been well handled. Surely they could have placed the shares with institutions?

[fredfishcake] 04/9/2020 07:22

The other thing it could be, if my understanding is correct, is that they've been dribbling out new shares to pay for the solar plant. This has now finished, and again if I understand correctly, they've had to issue fewer shares than they had allowed for to raise the necessary:

"St Helier, September 4, 2020 - Caledonia Mining Corporation Plc ("Caledonia" or the "Company") today announces that, further to its announcement on July 24, 2020 relating to a block admission application and an "At the Market" or "ATM" sales agreement with Cantor Fitzgerald & Co (the "ATM Sales Agreement"), the Company has now raised US$13m pursuant to the ATM Sales Agreement through the sale and issue of 597,963 shares in the Company (the "ATM Shares")."

Hopefully now this flow of new shares has stopped we can get back more to fundamentals.

[stemis] 03/9/2020 19:01

Ok, I've done a bit more research. I don't think it's any thing to do with this 'new project' but to potential delay in commmissioning the new shaft. There's a decent article on Seeking Alpha -

Here's a few quotes if you are not registered:-

the single analyst covering the stock, Cantor Fitzgerald's Mike Kozak, reduced his earnings estimates slightly for 2020, and cut his rating on the stock to Hold from Buy....

....the COVID 19 Pandemic and associated lockdowns and travel restrictions had a negative effect on the Central Shaft project in the Quarter. Work on the project was adversely affected because several members of the supervision team returned to South Africa prior to the imposition of travel restrictions. Work has continued with the remaining team, but at approximately half of the anticipated rate. The Central Shaft project also requires specialised contractors to travel to Blanket from South Africa and specialised equipment to be transported from South Africa to Blanket; under the current COVID-19 quarantine requirements such travel is impractical and. At this stage, the equipping is proceeding slower than planned and although this has not yet resulted in significant delays. The Company is receiving high level support from the Zimbabwe Government to address this matter with the corresponding departments in the South African Government. Currently it is not possible to predict when travel and other restrictions will be lifted so that work can resume on the project as planned. Accordingly, it is likely the timetable for commissioning of the Central Shaft will be extended to an indeterminate extent. This may affect the anticipated build-up in production which is currently expected to be 75,000 ounces of gold in 2021 and 80,000 ounces of gold from 2022 onwards; it is not currently possible to provide revised guidance.

I see this very much as a timing issue but the SE is an impatient beast and I guess some shareholders have less patience that I have...

[dozey3] 03/9/2020 18:13

Unfortunately you can’t compare the two. It’s all about sentiment and buyers balancing sellers. The market has lost faith in management - hopefully it will return.

[stemis] 03/9/2020 13:00

I doubt the share price fall has anything to do with the possibility of investing in a new project. The fall has wiped £55/60m off market cap. I don't think anyone has ever suggested they'd be spending that sort of money ...

[dozey3] 03/9/2020 12:39

You are absolutely right melody9999 but that misses the point, which is that in my view the cash generated belongs to shareholders. It should be their decision whether or not to invest in a new prospect.
Btw I think the market agrees with me judging by the slump in share price

[melody9999] 27/8/2020 23:11

I think it is one thing when loss making companies repeatedly raise funds from shareholders. Totally different when the company is generating cash and determines that the best use of that free cash is to invest it to further grow the company (in this case by acquiring another mine.)

[dozey3] 27/8/2020 10:02

Perhaps I’ve been a bit harsh having read the risk factors. Glad to have sliced a month ago though.