Caledonia Mining (NYSEAMERICAN:CMCL) reported what management described as a “very strong” financial year for 2025, citing a higher gold price environment alongside steady operating delivery at its Blanket Mine and early contributions from the Bilboes oxide operation. On the company’s results call, CEO Mark Learmonth said the performance was underpinned by “a higher gold price and some consistent operating delivery,” while also acknowledging cost pressures and operational constraints that weighed on unit costs during the year.
2025 financial performance driven by gold price and steady sales
Management highlighted year-over-year gains across key financial metrics. Revenue rose 46% to $267 million, gross profit increased 78% to $137 million, and EBITDA doubled to $125.3 million. Profit after tax rose to $67.5 million, up from $23 million in the prior year.
Jerrard said free cash flow reached $62 million, up 483% from the prior year, and earnings per share were $2.83. He also noted that Caledonia will file full financial statements under SEC rules in its 20-F, scheduled for April, following the company’s classification as a foreign private issuer under Canadian rules.
Costs increased and unit costs exceeded guidance range
While production volumes were delivered, Jerrard said on-mine costs rose and unit costs came in “marginally above” Caledonia’s guidance range. He attributed this to restricted access to higher-grade areas, inflationary pressures, and continued development investment “to ensure long-term operational reliability and safety,” as well as a lower-than-anticipated grade profile.
Production costs increased 25% across the group, including a 19% increase at Blanket. Jerrard broke down major drivers:
- Labor: Higher overtime payments, production bonuses, and wage inflation, tied to moving more volume to offset lower grades.
- Consumables: Up 14% due to inflation on reagents and other inputs, plus a “ZIG premium” associated with increased local procurement.
- Power: Grid and genset power overruns, deeper mining areas, and higher overall power requirements.
On the income statement, Jerrard noted royalties increased to $13.5 million due to higher revenue. He also pointed to a change in the royalty rate framework, explaining that ounces delivered at over $5,000 per ounce “attract an additional 5% royalty charge.” Net foreign exchange losses fell to $3.3 million from $9.7 million, which management tied to improved currency differentials and access to the willing buyer, willing seller market.
Caledonia also recorded an $8.5 million profit on the sale of its solar plant. Administration expenses rose to $20.48 million, which Jerrard said reflected one-off advisory fees related to the convertible note, additional employee costs, and other transaction costs. He said the company expects the run rate to fall by roughly 10% to 12% toward about $17 million annually.
Blanket operations: stable throughput, lower grades, and safety review
Learmonth said Blanket’s processing plant continued running near maximum capacity of about 820,000 tonnes per year, supported by use of stockpiles when mine deliveries were short. However, he said grades were lower in the third and fourth quarters as the mine temporarily accessed lower-grade areas, with an expectation that grade will improve as development reaches higher-grade areas, which he said should “reverse into the second quarter of 2026.” He also noted stockpile material tended to be lower grade.
Recovery declined alongside the lower feed grade, with Learmonth pointing to tailings grades of roughly 0.2 grams per tonne and saying the recovery impact was “largely due to the lower feed grade.”
Management also addressed a fatality at the mine in September, which Learmonth said resulted from a secondary blasting incident. He said the company initiated a comprehensive safety review across the business, including operating controls and training programs, with a focus on operational discipline, hazard identification, and embedding a “zero harm culture.”
Liquidity, financing activity, and 2026 capital plans
From a cash flow perspective, Jerrard said cash flow from operations increased to $105 million. Caledonia ended 2025 with cash on hand of $35.7 million, and management said that including bullion, receivables, and fixed-term deposits, the company had nearly $60 million available before facilities, with total liquidity “just under $55 million.”
After year-end, Caledonia completed a $150 million convertible note offering, which was upsized from $100 million due to demand, and the company received net proceeds of about $130 million after implementing a capped call structure that increased the conversion price to $56 per share from $40 per share. In Q&A, management said the convertible has a seven-year maturity, structured to mature after the scheduled repayment timing of anticipated project finance.
For 2026, management said total projected group capital expenditure is $178.9 million. Two projects approved by the board included:
- $14.2 million toward construction of a $34 million power line connecting to a 132 kV backbone.
- $2.2 million allocated to convert the central shaft winder from AC to DC.
Jerrard said these projects have quick paybacks and are aimed at improving power reliability and underground operations. He also noted that sustaining capital includes $136 million primarily allocated to Bilboes, and about $4 million for exploration at Motapa.
Caledonia declared a quarterly dividend of $0.14 per share, and Jerrard reiterated that dividends have been paid since 2012 as the company balances growth investment and shareholder returns.
Bilboes development, funding framework, and exploration updates
Project executive Victor Gapare said the board approved Bilboes implementation in November, reiterating previously disclosed economics including an internal rate of return of 32.5% at a gold price of $2,548 per ounce, and said returns are “materially higher at prevailing spot gold prices.” He said the company has appointed an EPCM contractor and is targeting first gold pour toward the end of 2028, with the first full year of production in 2029 and peak production of around 200,000 ounces per year.
Jerrard outlined a four-part funding strategy for Bilboes, including put options with a $3,500 per ounce floor covering January 2026 through December 2028, the convertible note financing, an interim $150 million facility under negotiation with a consortium of Zimbabwean and South African banks (with Standard Bank and CBZ named as co-lead arrangers), and a longer-dated project finance process expected to progress over the next 12 months. He said total capital costs were presented at $485 million, with capitalized interest and working capital bringing the overall package closer to $600 million.
On exploration, Craig Harvey said the company drilled nearly 30,000 meters at Motapa in 2024 and 2025 and expects to publish a maiden resource estimate in Q2 2026 following final QA/QC and interpretation work. At Blanket, Harvey described ongoing deep drilling targeting resource upgrades, and said the company expects to release additional drilling results in the coming months once QA/QC is finalized.
In closing remarks, Learmonth said the company’s priorities include strengthening safety performance, maintaining reliable operations at Blanket to generate capital for Bilboes, advancing Bilboes financing and development, and continuing exploration at Motapa as Caledonia pursues its strategy to become a multi-asset, Zimbabwe-focused gold producer.
About Caledonia Mining (NYSEAMERICAN:CMCL)
Caledonia Mining Corporation PLC is a UK‐domiciled gold producer listed on the NYSE American under the ticker CMCL and on the London AIM market. The company’s flagship asset is the Blanket gold mine, located near Gwanda in southwestern Zimbabwe. Blanket is a conventional underground and surface gold operation that includes a carbon‐in‐leach processing plant and tailings retreatment facilities, providing a structurally diverse resource base and established production infrastructure.
Caledonia acquired the Blanket mine in 2004, adding to its long operating history that traces back to the early 20th century.
