Caledonia Mining Share Discussion Threads

[tightfist] 04/10/2021 07:17

Hi SteMIS,Much appreciate your CMCL posts. The Maligreen mine/tenement acquisition does look very attractive from a gold-in-the-ground perspective. .Do you have insight as to the situation within Zim regarding availability of pre-owned and mothballed extraction process plant that could be re-sited and commissioned? One can imagine defunct mining companies eager to off-load kit; or has it been exported and is long-gone?.Would appreciate your views. Cheers, tightfist

[stemis] 04/10/2021 07:10

Seems like my comment re dividend on post 288 was on the money as Caledonia announce another 8% increase:-

Other disclosures - things are going as well as they said they would; production continuing to increase quarter by quarter (q3 ends in a week) and seemed to be hinting at a further dividend increase - "Business is going really well"

[tigerbythetail] 04/10/2021 07:09

Dividend increased (again) to 14 cents (quarterly) - 56 cents annually.
Always welcome news!

[nthn] 24/9/2021 18:00

Nice perspective thank you.

[stemis] 24/9/2021 17:49

From what I understand the seller (a private Zimbabwean company) needed money to progress one of their other properties, so it was a kind of fire-sale. Nobody else in Zimbabwe was able fund an acquisition for cash on this scale. Although non-Zimbabwe gold miners knew the property, they don’t have the in-country capacity to progress it.

One of the advantages, I guess, of being an existing operator in a country which others see as high risk. Personally I think CMCL are ideally placed to take advantage of opportunities as Zimbabwe tries to exploit it's natural resources. Others, of course, may take a different view...

[nthn] 24/9/2021 16:23

SteMis re: "he disclosed that the drilling that has already been done on Maligreen (60,000 m of diamond drilling and percussion drilling) would cost considerably more than what they've paid for the project"

Any idea why they'd sell the site so "cheaply" given that investment?

[stemis] 24/9/2021 12:13

Another interesting interview with Mark Learmonth in which he disclosed that the drilling that has already been done on Maligreen (60,000 m of diamond drilling and percussion drilling) would cost considerably more than what they've paid for the project.

Other disclosures - things are going as well as they said they would; production continuing to increase quarter by quarter (q3 ends in a week) and seemed to be hinting at a further dividend increase - "Business is going really well"

hxxps://youtu.be/mDrSrwJQqHY

[dozey3] 23/9/2021 21:38

I did luckily sell half at 1806 on 27 July last year, usually the signal for a further even more substantial rise. Now sorely tempted to double up again at this bombed out price. What holds me back is lack of understanding why it’s fallen so far out of favour.

[stemis] 23/9/2021 21:10

Sounds like a good strategy. Amazingly I've held these since 2012 (!!!) and bought at 235.63p (inc costs). I've even had 94% of my original investment back in dividends. There are risks with the share; price of gold, Zim politics, sentiment, but one thing I've always believed is that management know how to run a gold mine, are on shareholders' side and aren't going to take stupid risks with our money. Kicking myself for not selling at 1800p obviously, but think we'll eventually get beyond there

[tigerbythetail] 23/9/2021 20:00

Thanks for posting the interview, Stemis.
I'll go back to sleep here now - no point in getting too excited. I'm intending to hold onto these shares for ten years or more whilst the company makes ever more money, pays an ever increasing dividend, and expands in an ever more stable Zimbabwe. Since I bought some shares back down at 400p, my "yield" is already impressive, and it will only get better from here.
Good night, all.

[stemis] 23/9/2021 12:23

Mark Learmonth, CFO of Caledonia Mining joins Tim to discuss today's announcement of the companies' agreement to purchase the Maligreen gold mine in Zimbabwe, especially the due diligence they did and the fact that they've been discussing this acquisition for quite a while.

hxxps://youtu.be/on0BFEWAXU8

[stemis] 23/9/2021 09:45

WH Ireland - Caledonia is on the cusp of being cash-rich following the completion of the Blanket expansion and this looks a perfect project, along with its existing Connemara North project, for Caledonia to look to organically grow its production base in Zimbabwe.

[stemis] 23/9/2021 07:41

Yes, looks a good deal. Knowing how prudent CMCL management are, I'd guess they are pretty confident of the viability of the project to go for an outright purchase...

[tigerbythetail] 23/9/2021 07:30

This morning's RNS concerning the purchase of Maligreen is a remarkable deal.
I read it like this...
60,000m of drilling + test work + strip back for open pit (abandoned when gold price crashed in 2002;
Using higher cut off grade of 1.0 g/t - 872 oz of inferred at good grade of 2.79 g/t;
3/4 of above should be open pittable;
purchase price - $4m cost price + $1.6m confirmatory drilling etc. = $5.6m
That is less than $10 per ounce for high grade open pittable inferred gold resource.

This looks like something that would be fairly easy and cheap to get into production within 4 years or so.

[pi0110] 21/9/2021 14:09

A great opportunity for share buy backs if ever there was.

[stemis] 21/9/2021 12:21

Whilst the share price seems becalmed at around 900p, I've looked at the WH Ireland research note of 12 August. On production of 79.6k oz and a gold price of $1,650, they are forecasting 2022 earnings of 257p (352c), a dividend of 58p and cash of £47m. At 880p (at the time of the note) that's a PE of 3.5, EV/Ebitda of 0.8 and a yield of 6.4%. 2023 forecast is for cash to increase to £72m and dividend to 73p (a yield of 8.2%). Current market cap is £109m.

[ntv] 03/9/2021 06:25

Caledonia Mining Corp Plc
CMCL US
43,612
534,247 0.11

I found this figure not the figure quoted in RNS
I think somebody needs to go to spec savers!
Unless it is a very recent purchase

[fredfishcake] 12/8/2021 07:53

Totally agree about Glen Hume, shows they have the cojones to make tough decisions. TBH I'd be quite happy if they just sat on Blanket and returned the cash to shareholders as they have been doing.

[tigerbythetail] 12/8/2021 07:37

BTW, I'm happy they junked Glen Hume - it shows that management have the courage to drop projects that don't meet the grade.

[tigerbythetail] 12/8/2021 07:34

I'm not so silly as to be suggesting putting 100% (or even 20%) of your portfolio into a country like Zimbabwe. Obviously there are risks. Other than politics, CMCL is also a single mine operator, so plenty could theoretically go wrong - mining is hard. Though management is strong, which helps mitigate that.
But CMCL is a good profitable dividend paying gold miner with its costs under control and on a good upwards trajectory.
So I'm happy to let my smallish investment here just roll on and on and on. I'd add on opportunity if the share price gets cheap enough, but we're not there yet.

[stemis] 12/8/2021 07:33

Market cap $148m = EV of $131m

Underlying ebitda in quarter $14m = annualised of $56m

Currently valued at 2.3 x Q2 ebitda

Average gold price realised in Q2 was $1,792. Current price is $1,725 (a fall of 4%). However this should be more than offset by production increases - July was 5,995 oz (up 8% on average monthly in Q2).

Glen Hume is disappointing but does show that they will stick firmly to their criteria and not throw shareholder money away on low return projects.

Yield is now 4.3%

[fredfishcake] 12/8/2021 07:23

I think there's a balance to be struck here. I don't think outright nationalization is a risk, but things like windfall taxes are, and it's not that long ago that we had to have 50% local ownership. It's part of the reason you wouldn't want 100% of your portfolio here and any investor should bear in mind that the only real resource of this co is a mine in Zim. That doesn't make it uninvestable though!

[sailing john] 12/8/2021 06:39

Excellent results. Production up and most importantly costs down. I think these results will mark a trend reversal. I'm assuming further divi increases will follow.

[tigerbythetail] 12/8/2021 06:35

Good results this morning, as usual here. Company is on a good upwards trajectory.

ScepticalInvestor has been reading too many extreme right wing websites. Zimbabwe much improved for investment since changes, and nationalisation pretty much unthinkable.