Caledonia Mining Plc, a mining firm listed on the Victoria Falls Stock Exchange (VFEX), anticipates a decline in full-year profitability due to heightened operating costs at its Blanket Mine in Gwanda. These increased costs, including unexpected overtime payments and elevated power expenses, have impacted the company’s bottom line for the year ending December 31, 2023.
Mark Learmonth, the group’s chief executive officer, acknowledged the solid performance of Blanket Mine in the fourth quarter.
However, various one-off and non-operating costs, coupled with a tax refund claim impairment charge related to the mine’s solar project, have adversely affected overall profitability.
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Despite these challenges, Caledonia Mining remains optimistic that a significant portion of the cost increases will not persist into 2024. Year-to-date production and costs at the Gwanda-based mine align with full-year guidance expectations thus far.
To mitigate future electricity costs, the company is implementing measures aimed at reducing expenses over the medium term. Learmonth expressed confidence that many of the current cost issues will not recur in 2024, signaling a positive start to the year.
Caledonia Mining plans to publish its operating and financial results for the quarter ended December 31, 2023, by March 28, 2024. As of December 31, 2023, the company reported cash on hand of US$6.7 million and overdrafts and term loans totaling $17.7 million.