Q4 2021 Caledonia Mining Corporation PLC Earnings Call

March 21, 2022

Yeah.

Sure.

Okay.

Right, it's now 3 p.m. UK, so I think we can go ahead and start.

Ryan It's Cheryl.

Three P M U K. So I thought we should we can go ahead and start.

Speaker Change: Hello, everyone. Welcome to our Q4 results call for shareholders. So, on the call from Caledonia, you have Steve Curtis, our CEO , Mark Learmonth, our CFO , Maurice Mason, our Vice President of Corporate Development, and then myself, Camilla Horsfall, I'm the Vice President of Investor Relations.

Hello, everyone welcome to our Q4, a result cole shareholders. So on the calls with holiday here you have a deep conscious on C E O.

Glamour CFO Mark Mason, our vice President of corporate development, and then myself commendable as blended vice president of Investor Relations.

Camilla Horsfall: We're going to leave some time at the end for questions, so if you have any, then please just type them into the Q&A at the bottom or raise your hand and we will unmute you.

We're going to leave some time at the end of the question. So if you have any then please just type them into the Q&A and at Boston or raise your hand, and we will.

Camilla Horsfall: I'm now just going to share my screen and pass you over to Steve and Mark, who are going to talk through the presentation.

Now just going to share my screen and concentrated you Stephen mock who are going to talk through the presentation.

Steve Curtis: Thank you most well while you do that just say welcome to everybody. Thank you for joining this results presentation.

Thank you Ms Schwalm, while you do that just say welcome to everybody. Thank you for joining this results presentation.

Steve Curtis: Very nice set of results to run through with you and we're going to have the usual presentation which you would be able to find on the website as well.

The nice set of results to run through with you.

And are we going to have the usual presentation, which you would be able to find on the web sites as well.

Steve Curtis: And we'll run through the presentation quickly between Mark and myself and Morris.

And wheel will run through the presentation quickly between Mark and myself and Morris and and then as Camillo said, we'll we'll take questions. So, let's let's get going.

Steve Curtis: And then as Camilla said, we'll take questions. So let's get going.

Steve Curtis: I'll just do the first few and then when we get into the numbers, I will hand over to Mark and let him go through those particular slides. So, Mills, if we can have the next one.

I'll just do the first year and then when we get into to the numbers I will hand over to Mark Canadian go through those particular slides. Most if we can have the next one.

Okay.

So the disclaimer everybody knows about so we'll flick will flick into the into the highlights section.

Mark Learmonth: Another disclaimer everybody knows about, so we'll flick into the highlights section.

And a lot of this people are familiar with already.

Mark Learmonth: And a lot of this people are familiar with already. We must acknowledge that our health and safety record was tarnished by a fatal accident that we had in February this year. So although we were talking to the highlights of 2021, we do recognize the severity of that. Prior to that, we'd had a really, really.

We must acknowledge that our health and safety record was tarnished by a fatal accident that we had in February this year. So although we were talking to the highlights of 2021.

We do recognize the severity of that prior to that we'd had a really ready.

Mark Learmonth: a seizing run of fatality-free shifts, but this always reminds us of the industry we're in. So our condolences go to the mine and the family of the deceased.

Pleasing run all fatality free shifts.

But.

This vessel is reminds us of the industry. We're in so our condolences go to the mine and the family of the deceased.

Mark Learmonth: Albeit a very excellent performance in 2021, which you're familiar with, over 67,000 ounces. These have already been announced. Costs well contained. Financial performance, very good. 21% increase in turnover. That's the combination of ounces and good gold prices.

Albeit a very excellent performance in our in 'twenty, and 'twenty, one, which you're familiar with over 67000 ounces.

These have already been announced costs well contained.

Financial performance very good 21% increase in turnover is it's a combination of ounces and good gold price.

Mark Learmonth: 11% increase in the adjusted EPS, and a 49% increase in the dividend that all of you as shareholders or interested parties would have been familiar with already. And then we've been speaking about the new opportunities for quite some time now, and we have already announced the Marley Green project, so that's also familiar territory.

11% increase in the adjusted EPS and a 49% increase in the dividend that all of your shareholders or interested parties would it be familiar with.

Already.

And then we've been speaking about the new opportunities for all for quite some time now and we have already announced the Monty Green projects.

So that's all set familiar territory.

The results highlights just summarized here.

Mark Learmonth: The results highlights just summarized here.

Yeah.

Mark Learmonth: As I've said, 67,500 ounces, an average gold price slightly above 2020, revenue benefiting from the higher number of ounces, $121 million.

And as I've said 67, and a half thousand ounces at average gold price slightly above 2020.

Revenue benefiting from the higher number of ounces $121 million.

Mark Learmonth: Gross profit, very nicely up at over $50 million, $54 million. Adjusted profit attributable shareholders, 27 and a half. And adjusted earnings per share, 226 cents. Very, very nice.

Gross profit very nicely up and over $50 million $54 million.

Adjusted profit attributable to shareholders 27, and a half and adjusted earnings per share to 226 cents very very nice and the dividends paid out during the period 50 cents per share to shareholders over the quarterly periods.

Mark Learmonth: And the dividends paid out during the period, 50 cents per share to shareholders over the quarterly period.

Yeah.

Okay.

Generally health and safety was a was a good record for 'twenty, one which is the last row.

Mark Learmonth: Generally, health and safety was a good record for 21, which is the last row on this table showing that in total we had 31 occurrences.

ROE on this table.

Showing that in total we have 31 okay.

Occurrences.

Mark Learmonth: But very, very good to see no fatalities in 21 as we had in 2019 and 2020.

But a very very good to see no fatalities in 'twenty, one as we had in 2019 and <unk> 20.

Mark Learmonth: Medical aid, yes, 21, which was a high number.

Medical aid, yes, a 'twenty, one which was a high number.

Mark Learmonth: But we have to recognize the industry we're in. We continue our education efforts in terms of health and safety through INEANZVI. And that was disrupted by COVID, where we had to do social distancing.

But we have to recognize the industry we're in.

We continue our education efforts and in terms of of health and safety through and Yancey and AR that was disrupted by Covid way, we had to do social distancing that is now fully up and running again and it will get.

Mark Learmonth: That is now fully up and running again and it will get a high level of attention.

It will get a high level of attention because a two year gap, where neons V really wasn't the highlight that it always has been.

Mark Learmonth: because the two-year gap where Jansvi really wasn't the highlight that it always has been is not good for an industry like ours. So Jansvi is really, really a focus area. But a satisfactory and a very happy safety performance. As I've said already, unfortunately, you have to remember that we had a fatality. We cannot take our eye off the ball.

It is not good for an industry like ours, So neons V.

Is really radio focus area, but a better satisfactory at a very happy safety performance as I've said already. Unfortunately, you have to remember that we had a fatality we cannot take our eye off the ball.

COVID-19 is not much we need to talk about here, we spoken about it a lot.

Mark Learmonth: COVID-19, there's not much we need to talk about here. We've spoken about it a lot. Needless to say, it is still around. We have got a high number of our employees and their families vaccinated, which is very good. Operations are not disrupted. There is a tolerable level of COVID infections in Zimbabwe and operations continue as normal.

Needless to say it is still around we have got a high number of our employees and their families vaccinated, which is very good.

Operations are not disrupted there is a there is a tolerable level of COVID-19 infections in Zimbabwe and operations continue.

As normal.

Mark Learmonth: Transiting in and out of Zimbabwe is perfectly possible, so we can get specialist skills in when we need, and we can also move material up to the mine. So yeah, COVID is there, but it is not affecting us. But again, we don't take our eye off the ball. Safety protocols are still very, very high on the mine, and we will continue with our vaccination drive.

Transiting in and out of Zimbabwe is perfectly possible. So we can gauge specialist skills in when we need and we can also move material.

Up to the mine. So yes, COVID-19 is there, but it is not affecting us, but we again, we don't take our eye off the ball.

Safety protocols are still very very high on the mine and we will continue with our vaccination drive.

Operating review.

Mark Learmonth: We've spoken about central shaft a lot, everyone is aware that it was commissioned in March 21 and it is currently being used to hoist waste material and we will slowly migrate across to hoisting ore, but the benefit of hoisting waste material out of central shaft is that it has freed up the capacity on foreshaft.

We've spoken about central shaft lots are everyone is aware that it was commissioned in March 'twenty one.

And it is currently being used to hoist a waste material and we will slowly migrate across to hoisting ore, but the benefit of hoisting waste material out of out of central shaft is that it has freed up the capacity on four shaft and that allowed us to ramp up production in 2020.

Mark Learmonth: and that allowed us to ramp up production in 2021. We would not have achieved 67 and a half thousand ounces if we hadn't had the ability to have two shafts running. And as we got towards the end of 2021, four shaft was proving that the mining operation was capable of delivering the requisite tons to achieve our 80,000 ounce run rate.

One we.

We would not have achieved 67 and a half thousand ounces. If we hadn't had the ability to have two shops running.

And as we got towards the end of 2021.

Four shaft was was proving that the mining operation was capable of delivering.

The requisite talent to achieve our 80000 ounce run rate and we have successfully hoisted out of four shaft.

Mark Learmonth: And we have successfully hoisted out of foreshore.

Mark Learmonth: the 2,200, 2,300 tons a day when we need to, and so we are very happy that Central Shaft is running. There's obviously a fair amount of development work that has to still take place in and around the infrastructure of Central Shaft.

The 2000 202300 tons a day when when we need to.

So we are very happy that central shaft is running is obviously a fair amount of development work that has to still take place in and around the infrastructure of central shop, but are we there are very few operations that actually commissioner shaft and immediately put it into into some sort of.

Mark Learmonth: But there are very few operations that actually commission a shaft and immediately put it into some sort of use.

Mark Learmonth: So the preparation work that Dahler and his teams did has paid handsomely for us in the fact that we have been able to bring it into production, utilize its capacities, and therefore continue with deep level developments that are very necessary to ensure that we open up the production areas that are gonna be needed to sustain the 80,000 ounces.

Hughes.

So the preparation work their daughter and his teams did has paid handsomely for us in the fact that we have renewable to bring it into production utilize its capacities and therefore continue with the with deep level developments that are very necessary to ensure that we open up.

The production areas that are going to be needed to sustain the 80000 ounces.

Mark Learmonth: These are just some visuals that you're going to get of the central shaft infrastructure.

These are just some visuals that you get a gauge of the central shaft infrastructure.

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Mark Learmonth: So this is obviously drone footage. The central shaft is evident. The genset housings are there on the left, the white.

So this is obviously drone footage the central shaft is.

Is evident.

The Gen sets housings are there on the left is the white.

Mark Learmonth: You've got the main winder house, the big green building in the middle, a very, very nice setup. The village you can see in the background there.

You've got.

You've got the main one the house the Big Green building in the middle.

A very very nice very nice data there.

The village you can see in the background there.

Mark Learmonth: And if you would have known, sort of between Central Shaft and the village would have been Foreshaft, just to put it into perspective.

And if you would have known sort of between central shaft and the village will be enforced off just to put it into perspective.

I think we can move on.

So this is a this is a graphical representation of what has happened.

Mark Learmonth: So this is this is a graphical representation of what has happened during the year 2021. And a very nice uptick in the number of tons, very necessary. The grade has has delivered in terms of.

During the year 2021.

And a very nice uptick in the number of tonnes very necessary the grade has.

Has.

Delivered in terms of the plan.

Mark Learmonth: So that is why we have achieved very good production results.

So that is why we have achieved very good production results you can see the bars on the bottom graph.

Mark Learmonth: You can see the bars on the bottom graph.

Mark Learmonth: illustrating our production progress.

Illustrating our our production progress record quarters.

Mark Learmonth: record quarters, resulting in a record year.

Resulting in a record year. So this this is the proof of the pudding that central shaft is delivering and it was a worthwhile investment and we are therefore confident that we can go forward and.

Speaker Change: So this is the proof of the pudding that Central Shaft is delivering and it was a worthwhile investment and we are therefore confident that we can go forward and ramp up to the 80,000 ounces as we are guiding 73 to 80,000 ounces for 2022, but everything is pointing in the right direction.

Ramp up to the to the 80000 ounces as we are guiding 73 to 80000 ounces for 2022.

But everything is pointing in the right direction.

So.

Speaker Change: We will obviously on a quarterly basis be able to represent how the progress is going. We haven't done a 20,000 ounce quarter yet, but very, very close in Q3 and Q4. So as I've said, we are very confident that the run rate that we have been talking about for years will be achieved.

We will we will obviously on a quarterly basis be able to represent how how the progress is going.

We havent done a 20000 ounce quarter, yet, but very very close in Q3 and Q4. So as I've said, we are very confident that the run rate that we have been talking about for years will be achieved.

Speaker Change: Electricity continues to be a challenge in Zimbabwe and not just Zimbabwe. Southern Africa is very short of grid power. Blanket's primary source of electricity is still grid.

Electricity continues to be a challenge in Zimbabwe.

And not just in Barbara Southern Africa is very short of grid power.

Blankets blankets primary source of electricity is still grid.

Speaker Change: Although we do have full generating capacity on diesel to augment that if there are shortages.

Although we do have full generating capacity on diesel to augment that if there are shortages.

Speaker Change: We put in protective equipment, auto tap changes to protect us from erratic supply coming through the grid, and as many of you will be aware, we're also constructing a 12-megawatt

We've put in protective equipment.

Sure.

<unk> changes to protect us from erratic supply coming through the grid and as many of you will be aware. We're also constructing a 12 megawatt.

Speaker Change: a solar farm which will be operational around about mid-year 2022.

Solar farm, which will be operational roundabout midyear 2022.

Speaker Change: So as long as we are reliant on the grid power, we do have a risk factor.

So as long as long as we are reliant on the grid power.

We do have a risk factor, we don't have difficulty at this pointing time getting diesel for the J&J as and when we need them, but obviously, we don't we don't want to use them any more than absolutely necessary. It's expensive it is not environmentally friendly.

Speaker Change: We don't have difficulty at this point in time getting diesel for the gensets as and when we need them, but obviously we don't want to use them any more than absolutely necessary. It's expensive. It is not environmentally friendly. And I must say, since we put in the AutoTap changes, the ability of the mine to manage the erratic electricity coming through the grid has improved dramatically.

And I must say since we've put it in the order type changes the ability of the mine to manage the.

Erratic electricity coming through the grid has improved dramatically.

Speaker Change: And we haven't had to use the generators, anything like we had to before the AutoTap changes went in.

We've had we haven't had to use the generators anything like we had to before before the water tap changes went in.

Speaker Change: So that was money well spent again, but you can see in the first block.

So that was money well spent again.

But you can see in the first block that's the cost of the diesel in 2021 $84 million.

Speaker Change: that the cost of the diesel in 2021, nearly $4 million. That's a lot of money on something we really don't want to spend money on, but it secures production. So we will do it when we have to.

A lot of money on something we really don't want to spend money on but it secures production. So we will do it when we have to.

Speaker Change: I've spoken briefly about the solar project. We visited the site probably two weeks ago, three weeks ago. It is progressing well. Solar panels are there and arriving.

I've spoken briefly about the start of the project.

We visited the site.

Probably two weeks ago three weeks ago.

It is progressing well solar panels.

There and arriving.

Speaker Change: on mass, and once the actual pilings go in for the support structure, this project is going to progress very, very quickly. We are at the end, pretty much the end of March, but we are still confident that by the end of June , we should have a solar farm that is operational and supplying clean power to Blanket. It is only going to be, just to remind you, only about 27% of Blanket's total needs on a 24-hour basis.

On mass.

And once the once the actual tilings go in for the for the support structure. This project is going to progress very very quickly. We are at pretty much. The end of March but we are still confident that by the end of June we should have a solar farm that is operational and supplying clean power.

Blanket it is only going to be just to remind you only about 27% of blankets total needs on a 24 hour basis.

Speaker Change: Because we are not putting in battery storage facilities at this point in time, so it's only available to us during daylight.

Because we are not putting in battery storage facilities at this point in time, so it's only available to us during daylight hours, but it is still going to be a massive assets to the blanket pine.

Speaker Change: but it is still going to be a massive asset to the blanket mine.

Speaker Change: And it will enable us then to plan forward as to how we deal with, let's say, second phase or alternative thinking around securing blankets, electricity supply, so that, again, the investment made in central shaft is not hamstrung by anything to do with power.

And then will enable US then to plan forward as to how we deal with a let's say second phase or alternative thinking around securing blankets electricity supply. So that again the investment made in central shaft is not hamstrung by by anything to do with <unk>.

Speaker Change: So very excited about that and that'll be something we'll be talking to shareholders about during the year and hopefully some very impressive pictures round about June .

Sure.

So very excited about that and that'll be something we'll be talking to shareholders about during the year and hopefully some very impressive pictures round about June .

Speaker Change: I'm going to hand over to Mark to do the financial review and enjoy that and then we'll chat again towards the end.

I'm going to hand over to Marc to do the financial review.

And enjoy that soon and we'll chat again towards the end.

Mark Learmonth: Thanks, Steve. Just to reiterate a point that Camilla made, you can send questions in by typing in the chat bar. Okay. The avenue we discussed, it's primarily up because of the...

Thanks, Steve just to just to reiterate a point that <unk> eliminated.

Some questions.

By typing in the Choctaw, Okay Rhem.

Revenues were discussed it's primarily up primarily because of the.

Mark Learmonth: the higher production gold price was virtually unchanged. Royalty still stays at five percent, no change there. I've got a little bit more detail on production costs.

The higher production gold prices virtually unchanged royalty still say, 5% no change there.

A little bit more detail on.

Production costs.

Mark Learmonth: which increased from 43.7 to 53.1, primarily due to higher labour costs and

Which increased from 43, 7% to $33 one.

Primarily due to higher labor costs.

<unk>.

Mark Learmonth: more electricity cost. Depreciation has more or less doubled because, don't forget now, having brought the central shaft into operation, we've now started depreciating it, so that explains that. G&A also up significantly and that's again mainly due to higher wages and salaries. I've got more analysis on that at the moment.

More than capacity cost depreciation is more or less doubled because don't forget now having brought the central shaft into.

Operation with Novo start depreciating it unexplained snacks.

G&A also up significantly and that's again, mainly due to higher wages and salaries.

More analysis, a lot of the Maryland.

Mark Learmonth: The net foreign exchange gain was markedly reduced from 4.3 million to 1.2 and that just reflects the slower rate of the devaluation of the local currency. Don't forget the exchange rate is a managed exchange rate managed by the Reserve Bank. It doesn't reflect the rate of local inflation and again I'll be referring back to that in a moment.

Foreign exchange gain the net foreign exchange gain was was markedly reduced from $4 3 million to one two.

That just reflects the slower rates of the devaluation of the local currency so don't forget.

The exchange rate is a managed exchange rates managed by the reserve bank it doesn't reflect the rates of local inflation.

And again, referring back to that.

In a moment.

Mark Learmonth: Then there's quite a substantial delta net other income expense.

It's quite a substantial debt for net other income expense.

Mark Learmonth: This year is a seven million dollar net expense. Last year it was pretty much flat at 0.6.

This year was a 7 million dollar that's expense last year. It was pretty much flat six but don't forget the 2021 number $7 1 million includes the $3 $8 million of impairments on the Glen <unk> exploration asset, which we decided not to pursue whereas in 2000 22020 number included.

Mark Learmonth: And don't forget, the 2021 number, 7.1 million, includes a $3.8 million impairments on the Glen Hume exploration asset, which we decided not to pursue. Whereas in 2020, the 2020 number included a $4.1 million credit rising from export incentives. That was discontinued. So those are the two big factors that explain the swing in other income.

$4 1 billion dollar credit arising from export incentives that was discontinued.

Does the two big factors that explain the swing.

And other income tax remains remains at about 33, 8% on a consolidated basis.

Mark Learmonth: Tax remains at about 38% on a consolidated basis. And also I've got some more information about later, but that does include leakage due to withholding tax as we move money around the group. Also tax on inter-company profits in South Africa. The non-deductibility of certain costs that we incur in Jersey, because the tax rate here is,

For more information about later, but that does include leakage due to withholding tax as we move money around the group.

Tax on intercompany profits in South Africa, the non deductibility of certain costs, we incur in Jersey corporate tax rates here as them.

Zero.

Mark Learmonth: The NCI, the minority interest in our language, that reflects the economic interest of the local owners in blanket after taking account of the facilitation loans. So that is the 10% now unencumbered economic interest.

And the NCI.

Minority interest in a language that reflects the economic interest of the local owners and blanket after the tough to take into account the facilitation.

It is the 10% unencumbered economic interest held by the community and then if I.

Mark Learmonth: held by the community and an effective 3.2% held by the government, that's very effective holding after taking into account the labour repayments. The ownership of the employees is included in production costs as required by ILO.

Three 2%.

Goodbye.

The government is reflective holding after taking into account delivery payments.

Ownership the ownership of the employees is included in <unk>.

In production costs as required by law.

And for US so our adjusted earnings per share up from 2200 to 204 cents last year to 226 this year.

Mark Learmonth: So adjusted earnings per share up from 20, 204 cents last year to 226 cents this year.

Mark Learmonth: A bit more information on the wages and salaries, the big increase was on production costs. The big increase was wages and salaries, increasing by nearly five million dollars. And that reflects online salary increases.

It's a bit more information on the wages and salaries.

The Big increase was was.

Production costs, the big increase was wages and salaries, increasing by $35 million does not reflect some online salary increases higher bonus provision with them to get the.

Mark Learmonth: higher bonus provisions. Don't forget the mine performed well in terms of production and that resulted in higher bonus payments. And also we've appointed some additional senior people at the mine who clearly cost more than the average as well as a substantial increase in the on-mine headcount. The on-mine headcount is now just under 2,000 people.

Well content production and that resulted in higher.

Bonus payments and also we've appointed.

Some senior additional some additional senior people at the mine, who clearly comfortable the average as well as a substantial increase in the online head count the online head count is now just under 2000 people.

Mark Learmonth: Consumables also up above the rate of run rate of production, and that reflects the the the cost of the trackless equipment, which is very expensive and is used in the in the declines we have during the year. We did put measures in place to control those costs better, but that day that only flow came that was only sort of.

Consumables also.

Above the rate of run rate of production and that reflects the.

The cost of the trackless equipment, which are very expensive and has used it in the numbers.

The declines we have during the year, we did put measures in place too.

<unk> costs better.

Not really.

The thought was there any sort of firm.

Mark Learmonth: recognised partway through the year. We are going to live with trackless equipment for quite some time as we continue doing the development, so that will be an embedded cost in the business.

Recognize sort of partway through the year, we are going to live with trackless equipment for quite some time as we continue through the development side.

That will be that will be.

Embedded cost in the business could be consumables reduced substantially as the.

Mark Learmonth: COVID consumables reduced substantially as the need to sort of incur those costs diminished. Electricity, as we've already mentioned, that increased substantially, a $2.1 million increase, and that really reflects the increased use of the diesel generators, particularly toward the end of the year when the incidence of power interruptions arising from voltage surges was substantially increased, and that required us to

They need to.

Sort of incurred those costs diminished electricity as I've already mentioned that increased substantially to $1 billion increase not really reflects the increase use of the diesel generators, particularly towards the end of the year.

When the incidence of.

The power of power interruptions arising from.

Voltage surges was substantially increased and that required us to.

Mark Learmonth: use the gen sets more. As Steve mentioned right at the end of the year we did put in a further auto tap changer which protects our equipment from the surges and we have now seen a substantial decrease in the diesel usage from January onwards which is good.

Use the Gen sets more as Steve mentioned right at the end of the year, we did put in a further them off the top changer, which which protects our equipment from the searches and we have not seen a substantial decrease in the <unk>.

The diesel usage.

January onwards, which is good.

Mark Learmonth: And you'll see on my administration, it's not a big it's not a big cost. One point eight million increasing to two point seven million. But that did increase quite substantially. That that reflects the fact that a lot of those local online costs.

And Youll see amount of administration, it's not big it's not a big cost 1.8 million increased $2 7 million.

Does that did increase quite substantially that reflects the fact that a lot of those local online costs.

Mark Learmonth: paid in local currency, RTGS, and the rate of inflation in the local currency is still extraordinarily high, and that's just not reflected in the official exchange rate, which is what we use to convert those locally dominated costs back into US dollars, and that does give rise to an increase in that cost area.

But paid in local currency, while TTS, but the rate of inflation.

The local currency is still extraordinarily high but not just not reflected in the official in the official exchange rate, which we use to convert those local local luxury denominated costs back into U S. Dollars does give rise to that increase in that.

Cost scenario.

Mark Learmonth: Just in total, the cost per ounce of $7.42 an ounce was within the bottom end of our guidance range, which was $7.40 to $8.15 an ounce.

Just in total the cost per ounce of $742, an ounce was within the bottom end of our guidance range, which was 740 to $15 an ounce.

Mark Learmonth: When you get G&A, the big component in G&A is wages and salaries, which increased from 4 million to 5.4 million. That reflects an increase in the headcounts. We increased the size of the Johannesburg office from 20 to 24. And again, the extra, the extra employees were at the expensive end of the scale. People like particularly rock engineers, where as we're going deeper, we need to devote more attention to that area.

And you can see the G&A and the big components in G&A as wages and salaries, which increased from 4 million to $4 4 million.

<unk> an increase in the head counts, we increased the science of the journal the journal of critical office from 'twenty to 'twenty, four and again the extra the extra employees.

The scale.

People like particularly rock engineers.

As we go deeper we need to devote more attention to that area.

Mark Learmonth: so those those costs have gone up. I don't really think there's much more to talk about on on on GNA because the main the main component of that really is wages and salaries.

Those costs have gone up.

I don't really think there's much more to talk about com.

G&A because of that.

Components of that really is wages and salaries.

Moving on.

Mark Learmonth: Taxation just analyzes tax between the main component being income tax in Zimbabwe.

And just the final analyses talks between the main component being income taxes Zimbabwe.

Mark Learmonth: and then the other bits and pieces which is all the withholding tax. So we've got income tax in South Africa that arises on the intercompany profit.

And then the other bits and pieces, which is withholding tax so it got income tax in South Africa that arises on the intercompany profit clearly that intercompany profit disappeared on consolidation the amount would have to pay on that profit to the second.

Mark Learmonth: Clearly, that intercompany profit disappears on consolidation, but the amount we have to pay on that profit to the.

Mark Learmonth: South African revenue, obviously you can't wish that away. So it's half a million dollars of tax.

It's got African revenues, obviously accomplished underway, so that's half a million dollars.

Mark Learmonth: And then there's the various withholding taxes on the management fees, as we pay management fees from Zimbabwe to South Africa, but also on the deemed dividend component.

And then the third is withholding withholding taxes on the management fees, we pay management fees from Zimbabwe to South Africa, but also on the deemed dividend component.

Mark Learmonth: those management fees are recognised by the Zimbabwean authorities as effective dividends.

Management fees are recognized whether it's in Brooklyn authorities effective dividends again, nothing cuz withholding tax in Zimbabwe deferred tax $5 8 million not just simply reflects the fact that in Zimbabwe, we get a 100% capital allowances for capital expenditure in the year of which was incurred but clearly it doesn't.

Mark Learmonth: again that that incurs a withholding tax in Zimbabwe. Deferred tax 5.8 million that just simply reflects the

Mark Learmonth: fact that in Zimbabwe, we get 100% capital allowances.

Mark Learmonth: for capital expenditure in the year in which it's incurred, and clearly there's no corresponding accounting benefit from that arising from depreciation. And so that's a sort of a temporary factor and will over time reverse.

Corresponding accounting benefit from that arising from depreciation.

So that's the sort of the temporary temporary factor, we will over time reverse.

Mark Learmonth: Cash flow remains very strong. The number I like in particular is the one at the top, cash flow before working capital. Just a shade under 50 million dollars, nearly a million dollars a week. And that really does reflect the improvement in cash generation due to due to higher production.

Cash flow remains very strong with umbrella in particular is one of them.

Cash flow before working capital.

A shade under $50 million $90 million, a week and that really does reflect the improvement in cash generation due to due to higher production below that you can see working capital increase substantially in the year two by $11 million of approximately $4 million of increase in inventories.

Mark Learmonth: Below that, you can see working capital increased substantially in the year by $11 million. That's approximately a $4 million increase in inventories, a $4 million increase in prepayments, and a $4 million increase in amounts receivable offset by a small increase in payable.

$4 million increase in prepayments and a $4 million increase in accounts receivable.

By a small increase in payables of those three big increases inventories receivables and prepayments, but one that we can really control. These inventories and we are putting a lot of effort now into and to try to manage the inventory level down.

Mark Learmonth: Of those three big increases inventories receivables and prepayments, the one that we can really control is inventories, and we are putting a lot of effort now into into trying to manage the inventory level down. I mean, I think previously, the mantra of just just in time has moved to just in case.

I think previously.

At the moment, we're just just in time to move to just in case and we did we did.

Mark Learmonth: and we did deliberately increase our stock levels in the course of 2021 to protect ourselves from any interruption to the supply chain arising from COVID, but also from the sort of insurgency in South Africa in September , I believe. But I think that's pulling on too far now, so we need to put more control on our inventories. In terms of receivables and prepayments, I've got some information on that at the moment, but it's not an area of great concern to us.

Deliberately increase our stock levels in our call.

So 2021 to protect ourselves from any interruptions to the supply chain horizon from Covid, but also from the.

And sort of insurgency.

In South Africa or in September I believe.

I think that's probably going to fall now so we need we need to.

More control on our inventories in terms of our receivables are prepayments I've got to make sure that at the moment, there's not an area of great concern to us.

Mark Learmonth: We invested a lot, $35.9 million in the year, that includes $4 million on the purchase of the Marley Green asset towards the end of the year, and $1.6 million spending on solar. So there is a lot of spending left to do on the solar project in the course of the next few months.

We invested a lot.

$35 $9 million in the year that includes $4 million on the purchase of the amount of greenhouse that towards the end of the year.

$1 6 million spending on cellular so there is a lot of spending less to do almost none of the project and the <unk>.

The next few months financing is $2 four income set a dividend payments plank is dividend payments the the dividend payments of <unk> placements minorities, plus the dividend payments with California Mikes nuts.

Mark Learmonth: Financing is 2.4 income, so that's dividend payments, so blankets, dividend payments, the dividend payments, the blanket pays to its minorities, plus the dividend payments that Caledonia makes, net of equity raises in 2020 and 2021, and the proceeds of the gold loan, which we took out towards the end of 2021.

Equity raises in 2020 and predict 'twenty one on the proceeds of the gold loan, which we took out towards the end of 2021.

Mark Learmonth: For the end of the year, we had cash of 16.3, and I will warn you that we do expect that cash to be eroded in certainly the first half of 2021, as we embark on quite a high level of planned capital expenditure on the central shaft and on the solar project in the first half of 2022.

So the end of the year, we had cash of $16 three.

And I Wonder if you will.

Warn you that we do expect that cash to be eroded in the certainly the first half of 2021 must as we embark on quite a high level of planned capital expenditures on the central shaft and all of a sudden approach into the first half of 2022.

Mark Learmonth: Just a bit more information if you're concerned about prepayments and trade receivables, you can see the prepayments, nearly $7 million of prepayments. The components of that really relates to prepayments for the solar project, so that's prepayments to Voltalia. Then the rest of it reflects the fact that the supply of credit in South Africa and Zimbabwe is drying up, and we're just being now required to make prepayments for shipments for the line.

Just a bit more information if you're concerned about some about prepayments and trade receivables you can see the prepayments will be $7 million of prepayments.

The components of that really relates to prepayments for the for the solar project prepayments to mortality than the rest of it reflects the fact that.

The supply of credit in South Africa, Zimbabwe is drawing up because we're just being not required to make prepayments.

Shipments for the mine in terms of the bullion sales receivable again that doesn't look to have gone up alarmingly $4 3 million to $4 five so without <unk> broken that down. So you can see when those amounts were $4 5 million was repaid.

Mark Learmonth: In terms of the bullion sales receivable, again, that does look to have gone up alarmingly from 1.3 million to 4.5. So we've helped to broken that down so you can see when those amounts were when that 4.5 million was repaid.

Mark Learmonth: Now, the way in which we get paid for each gold delivery is you get staggered payments.

The way the way in which we get paid for each gold deliveries you get you get started payments. So typically you get pretty old TGF complaint on first and then the U S. Dollar component later and then the.

Mark Learmonth: So typically, you get paid the RTGS component first, and then the US dollar component later. And then there's a correcting US dollar payment, which reflects the extent to which our delivery is in a month.

Then theres a correcting the U S dollar payment, which reflects the extent to which our deliveries in the months that exceeded the benchmarks such that we qualify for an incremental proportion of our revenues in U S. Dollar so it's not.

Mark Learmonth: have exceeded the benchmark such that we qualify for an incremental proportion of our revenues in US dollars. So it's not particularly straightforward, but I think the point of that little inset table is to show you that of that 4.5 million dollars, it had all been recovered partway through January . So I don't want people thinking it was a difficult

Particularly straightforward.

The point of the point to that little table is to show you that hold up $4 $5 million little been recovered partway through January so I don't want people thinking there's a difficulty with.

Mark Learmonth: getting our money out of Fidelity and actually the payment system from Fidelity has improved substantially as 2021 progressed.

Getting our money out of fidelity and I actually think the payment payment system from fidelity has improved substantially.

2021 progressed.

Mark Learmonth: Balance sheets, obviously, non-current assets, fixed asset goes up because of the continued investment. Working capital goes up for reasons that I've just discussed. The derivative financial asset. But in 2020, we had a one point two million dollar gold ETF. And that reflects the fact that temporarily we had a cash surplus in South Africa, which we're obliged to hold in South Africa around.

The balance sheets.

Non current assets successfully goes up because of the continued investment.

Capital goes up for reasons that are due.

Just discussed.

The derivative financial asset, but in 2020, we had $1 2 million dollar gold Etfs and that reflects the fact that temporarily.

We had a cash surplus in South Africa, which were obliged to hold in South Africa runs, we knew we would need it and sell it we.

Mark Learmonth: We knew we would need that cash in South Africa at some time, but getting money out of South Africa and then back into South Africa can take quite a long time. So rather than run the risk of shipping the money out of South Africa so we could hold it in US dollars and protect ourselves from any RAND devaluation, we decided to do the next best thing, which was holding a gold ETF to protect against the RAND devaluation. I think there's nothing really much more to say on that.

We knew we would need that cash in South Africa at some time, but getting money out of South Africa, and then back into South Africa can take quite a long time, so it rolls in and run the risk of shipping the money out of South Africa. So we can hold it in U S dollars and protect ourselves from any round around devaluation, we decided to do the next best thing, which was holding a gold etfs, 2%.

To protect against an antique valuation.

Nothing really much more to say on the balance sheet.

Moving on so.

Mark Learmonth: So in terms of outlook, this year we've guided our production 73,000 to 80,000 ounces. Clearly, we strongly hope that we'll be towards the top end of that guidance range. All in sustaining costs of between $880 and $970 an ounce. I think the critical thing is.

So in terms of outlook.

This year, we're going at our production 73000 to 80000 ounces clearly.

We hope it will be towards the top end of that guidance range all in sustaining cost of between 80 and 90 certainty.

So I think the critical thing is the capex. The capex burden for 2022 is too quite substantial so what you see there on the table as we reconcile from the Capex showed in the technical report that was published in May of $15 2 million and then show the extent to which that has increased.

Mark Learmonth: the capex burden for 2022 is still quite substantial. So what you see there in that table is we reconcile from the capex shown in the technical report that was published in May at 15.2 million and then show the extent to which that's increased.

Mark Learmonth: by an overrun on planned development. The additional development central shaft was due to the COVID delay. As Steve mentioned, the development needs to chase the fact that the mining areas have continued to go deeper using the declines. That's given rise to 3.4 million. The poor electricity supply, that's going to cost us another 3.2 million dollars in terms of generators and the further equipment to protect ourselves.

And over on our planned development.

The additional development central shops was due to the Covid denials as Steve mentioned, we need to.

Element needs to chase the fact that the mining areas have continued to go deeper.

Using the declines given launched $3 4 million.

That cause it to supply not so that's going to cost us another $3 $2 million in terms of generators.

The further and further equipment to protect ourselves.

Mark Learmonth: I mentioned the fact that the number of workers has increased. I think it's gone up from about 1,700 to just under 2,000. They need to live on the village. So that means we need to spend money upgrading the workers village in terms of housing units and upgrading the water and sewage facility. And also, we're increasing the volume going through the plant.

The fact that the number of workers as increased something that's gone on for about 1700 too just on the 2000 and they need to live on the village. So that means we need to spend money upgrading the workers' village in terms of housing units and upgrading the water and sewage facility.

We're increasing the volume going through the plant and so we need to spend more money on.

Mark Learmonth: so we need to spend more money on an additional primary mill and a regrind mill and a CIL tank and some more compressors. So all of that.

On the additional primary mill and the re grind mill.

Cir CIL tankage more compressed so all of that.

Mark Learmonth: in conjunction with the balance of the solar spend gives rise to a total capex bill for 2022, about $37.4 million, and I have to tell you that more than half of that, the bulk of that is front-loaded in the first half of the year.

In conjunction with the balance of the solar spend gives rise to a potential total capex capex Bill for 2020 to about $37 4 million on I have to tell you more than half of that bulk of that is front loaded in the first half of the deal.

Mark Learmonth: I'm happy to talk about the dividend. As you know, we've increased the dividends pretty much quarter on quarter for the past few years. In January , we took the decision not to increase the dividends further. At that time, we were on a yield of approaching 5%.

I'm happy to talk about the dividend.

As you know we've increased the dividend.

So much quarter over quarter. The past few years in January we took the decision not to increase the dividend further.

At that time, we were on a yield of a crazy approaching 5%.

Mark Learmonth: and there was an internal discussion to the effect that the market was becoming complacent as to our continued dividend increases but more importantly we're now beginning to to pivot the company

There was an internal discussion to the fact that the market was becoming complacent.

Two our continued dividend increases, but more importantly, we're now beginning to appear.

Because of the company transition the company towards being a.

Mark Learmonth: towards being perhaps a more traditional mining company with increased exposure to exploration and development. And so that we're really beginning to sort of signal the change that the money that comes out of Blanket is now going to be, not all gonna go in terms of into ever increasing dividends. A portion of it will be retained to create a modest.

Perhaps a more traditional mining company with increased with increased exposure to exploration and development and say that we're really beginning to sort of a signal of a change that the money that comes out of a blanket is not going to be all kind of got it in terms of into ever increasing dividends a portion of it will be retained.

Two to create a modest.

Mark Learmonth: Warchester contribute, but not fully fund, contribute to further developments, particularly in barley green.

Our war chest to contribute not fully fund contribute to further developments, particularly in Bali Greig.

Steve you want to cover New York Joseph.

Morris Tour volume.

Speaker Change: Yeah, I'm happy. I'm happy too. And then Morris can can jump in as well. We've looked at we've looked at many properties. And Morris through his responsibility as business development has built up an enormous knowledge of of the potential that Zimbabwe has.

Yes, I'm happy I'm happy to and then Morris.

<unk>.

Jump in as well.

We've looked at we've looked at many properties and.

And Morris through his responsibility is business development has built up an enormous knowledge of the potential that Zimbabwe has.

Speaker Change: In principle, we don't want to buy large producing assets that come with

In principle, we want to we don't want to buy large producing assets.

That come with <unk>.

Speaker Change: big problems. So we feel very much.

Big problems so.

So we feel very much more comfortable and capable of repeating the sort of the process that we embarked on a multi greed something that is has a pedigree in terms of gold and potentially even gold ounces in our resource statement and then we build.

Speaker Change: more comfortable and capable of repeating the process that we embarked on in Mali Green, something that has a pedigree in terms of gold and potentially even gold ounces in a resource statement. And then we build and develop our own operations.

And develop our own our own operations.

Speaker Change: We are cognizant of the difficulties of various processes in Zimbabwe, but we're also confident that if you if you sequence events

We are cognizant of the difficulties of various processes in Zimbabwe, but we're also confident that if you if you sequence events.

Speaker Change: that you can build a very, very nice pipeline. We are absolutely committed to moving away from being a single asset producer. Work is progressing on Marley Green right now to improve the confidence level around the inferred resource that we purchased.

You can you can build a very very nice pipeline, we are absolutely committed to moving away from being a single asset producer.

Work is progressing on moly green right now to improve the confidence level around the inferred resource that we purchased.

Speaker Change: And at that point in time, we will then be able to develop a plan for the next stages. Morris, what else what else you want to mention in terms of new opportunities? Well, just just to give maybe shareholders a sense of scale, Steve, I mean, on this slide, you see we toggle a map of Burkina Faso over.

And at that point in time, we will then be able to develop a plan for the next stages Morris what else what else do you want to mention is in terms of new opportunities.

Just to give maybe several is a sense of scale, Steve I mean.

On this slide you see we toggle.

Matt Fassler.

Morris: Zimbabwe and that just gives you a sense that this is a big country, it's half the size of Germany.

Zimbabwe and that just gives you a sense of this is this is a big country is half the size of Germany.

Morris: And that greenstone belt that you see there that runs north.

And that.

<unk> greenstone belt, but you see there that runs north.

Morris: down to southwest, we're in the bottom tip of that maguanda.

E down to southwest we're in this we're in the bottom typically glenda.

Morris: But there's a huge gold belt, which.

Theres a huge gold producing.

Gold belts, which.

Morris: frankly, has probably spent 50 years of being underexplored. So we feel.

Frankly, it's probably spent 50 years.

Being under explored so we feel.

Morris: got a unique competitive advantage and probably one of the last gold frontiers in Africa.

Got it.

<unk> competitive advantage and probably one of the last call Frontiers in Africa.

Thank you.

Speaker Change: Yeah, Molly Green, we've spoken about, purchased 100% ownership, an inferred mineral resource of just below a million ounces, and as I've said, we're working to improve the confidence around that resource number so that we can then do the next stage of planning.

Yes.

Molly Green we've spoken about.

So just 100% ownership.

And inferred mineral resource of just below 1 million ounces and as I've said, we are working to improve the confidence around that.

Resource number so that we can then do the next stage of planning.

Speaker Change: and be able to see this for investors who do want to see that technical report.

And we also see this too.

Do you want to see that technical report.

Speaker Change: We're quite excited about Monty Green. It's got the technical report being published. It's got quite a nice grade, tonnage curves. We think there's definitely potential.

It does.

We're quite excited about Monte agreements, particularly with would be published.

We're quite nice grade tonnage codes.

We think there's definitely potential for amendment.

And then.

We're working hard on that.

Speaker Change: Yeah, sorry, just so just to be clear, we're focusing on upgrading our confidence level. And then once we've done that, we can then move to a feasibility study to support an initial mining operation. We're still confident that there is further material depth, a long strike and then a new mining area. It's just our approach to these things is very much to try to turn to account and generate cash.

Yes, sorry, just so just to be clear we're focused on upgrading our.

The confidence level.

And then once we've done that we can then move to a feasibility study to support.

<unk> mining operations were still confident on the risk for the material, perhaps along strike because at a new mining area. It's just our approach to these things as very much too to try to turn to accounts and generate cash.

Speaker Change: from what we know we've already got, rather than take time and money to developing a bigger resource space. The bigger resource space will come, hopefully, in time.

We know we've already got relatively tight.

Take time and money.

Developing a bigger resource space I think it was all space will come will come hopefully in time okay.

Speaker Change: ESG, I'll talk a little bit about that. Most of you want to put the next slide up. Hopefully most of you will have seen our inaugural ESG report that was published last year.

ESG I'll talk a little bit about that.

Most of you want to put the next slide up.

Hopefully hopefully most of you will have seen.

Inaugural ESG report that was published last year.

Speaker Change: We are very focused on ESG and the publication of a report really just formalizes many aspects of what the mine management at Blanket has been doing and what Caledonia has been doing. But it is recognized now internationally that ESG is something that people must talk about, must commit to and, you know, must actually put their cards on the table and show their credentials.

We are very focused on ESG and the publication of a report really just formalizes many aspects of what.

The mine management of blanket has been doing and while Caledonia has been doing but it is it is recognized now internationally that.

<unk> is something that people must talk about must commit to and.

Must must actually put their cards on the table and show their credentials.

Speaker Change: So although Zimbabwe is a difficult environment and a very poor environment, we have got a very robust ESG program, and really environmental and social really applies to what goes on at the mind level and the business level inside of Zimbabwe. The governance, the governance side of that, yes, the principles that are

So, although Zimbabwe is a difficult environment and a very poor environment.

We have got a very robust.

Program, and really environmental and social really applies to what goes on at the at the mine level and the and the business. They are in inside of Zimbabwe. The governance, the governance side of that yes. The principles that are.

Speaker Change: applied at the Caledonia level, we have always been very, very high on our governance performance, being listed on multiple exchanges, we know what our responsibilities are, and obviously that discipline just flows into the way we do business in Zimbabwe. So governance is a...

Applied at the Caledonia level, we have always been very very high on our governments governance performance being listed on multiple exchanges. We know what our responsibilities are and obviously that discipline just flows into the way we do business in Zimbabwe. So governance is a taken.

Speaker Change: And then environment and social, as I've already said, we're working towards the solar farm.

And then.

<unk> environmental and social as I've already said, we are working towards the solar farm to improve our environmental footprint.

Speaker Change: to improve our environmental footprint.

Speaker Change: We're very conscious about the water we consume, and we are doing whatever we can do because it's a very dry area where the Blanket Mine is.

We're very conscious about the water, we consume and we are doing whatever we can do because it's a very dry area, where the blanket mine is and the principles that are outlined here.

Speaker Change: And the principles that are outlined here of the areas and the topics that we focus on, these will all be applied 100% at any new operation as well.

The of the areas in the topics that we that we focus on these will all be applied 100% at any new operation as well. So this is not just going to be a one week Wanda.

Speaker Change: So this is not just going to be a one week wonder, this is the way we do business and we will be very happy and we'll talk about ESG on an annual basis in a formally written report.

This is the way, we do business and we will be very happy and.

We'll talk about ESG on a on an annual basis and a 4 million written report.

Speaker Change: And this is part of our DNA, or it has been, but now it's in black and white.

<unk>.

Is this is part of our DNA.

It has been but now it's in black and white.

Speaker Change: These are just some photographs of showing the sides of the current tailings dam. Tailings dam is going to be mothballed during the next couple of years and we will build a new tailings dam to the absolute right standards.

These are just some photographs of showing the sides of the the current tailings dam.

<unk> is going to be.

Mothballed.

During the next couple of years, and we will build a new tailings dam.

Two the absolute right standards.

Speaker Change: But this just shows the sort of the work that the mine management is doing in terms of vegetation on the banks of the walls of the current tailings dam.

But this just shows the sort of the work that the mine management is doing in terms of vegetation on the banks of the of the walls of the current.

Tailings dam.

Speaker Change: very, very successful. We use some very clever botanists to help us with the right indigenous plants for this dry area. And yeah, this shows it is successful. Sorry, just to interject, sorry Steve. The new tailings dam is not because there's a problem with the existing tailings dam.

Very very successful we use we.

We had some very clever.

Bossiness to help us with the right indigenous plants for this dry area.

This shows the shows it is successful so just just to interject.

The new tightening of terms not because there's a problem with the existing tailings dam.

Speaker Change: We need a new tailings dam because the mine is continuing to produce and the old dam has outlived its useful life. So the new dam is more a reflection on a deficiency with the existing dump.

We need to detailing.

Because the bond is continuing to produce.

The old Dom has outlived its useful life.

The new Domino slow reflection on money deficiency with the existing bottom dump.

QUADRA. Thank you Bob.

Okay.

Speaker Change: Okay, so I should probably let Mark do the outlook because as everyone is aware, I am standing down as CEO at the end of June .

Okay. So I should I should probably let Marc do the outlook because as everyone is aware I am spending down as CEO at the end of June .

Speaker Change: Mark is taking over as CEO and as I've said to everyone and anybody who's asked me why, I've been doing this job for eight years.

Marcus.

Taking over as CEO .

And.

As I have said to everyone and anybody who has asked me why I've been doing this job for eight years.

Speaker Change: I thoroughly enjoyed the period that I've spent in management with Caledonia.

Thoroughly enjoying.

The periods that are staying in managements with with Caledonia, but the next phase. The next phase of development for calendar year in terms of becoming a multi asset producer gold producer in Zimbabwe is gradually retire it's going to require.

Speaker Change: But the next phase, the next phase of development for Caledonia in terms of becoming a multi-asset producer, gold producer in Zimbabwe.

Speaker Change: is going to require absolute focus for the next five to ten years.

Absolute focus for the next five to 10 years, it's going to be a very very interesting in busy periods and it would be wrong, if I thought that.

Speaker Change: It's going to be a very, very interesting and busy period.

Speaker Change: And it would be wrong if I thought that I could carry on doing this for the next period. So it's time for me to stand down and hand over to new management.

I could.

Carry on doing this for the next day or so it's time for me to stand down and handover to do new new management, but I stay on the board.

Speaker Change: I stay on the board. I'm available to Mark in terms of some of my knowledge and relationships that I've built up in Zimbabwe. So I, and remaining a shareholder, really, really look forward to the future. So, Mark, anything else you want to say about that?

Im available to Mark in terms of some of my knowledge and relationships that are built up in Zimbabwe. So in Romania shareholder ready ready to look forward to the future. So mark anything else you want to say about the outlook.

Mark Learmonth: No, no, just just to reiterate what you've just what you just talked about there on behalf of your management colleagues on the board, we'd like to thank you for what you've achieved over the last sort of eight years or so. It'll be, it'll be, it'll be exciting the next few years are going to be very exciting but it'll be good to have you still still contributing from the board.

Just to reiterate what you've just what you just talked about that on behalf of management colleagues on the board would like to thank you for what you've achieved over the last sort of firm right users.

It'll be it'll be it'll be exciting for the next few years could be very exciting the term it'll be good to have you still contributing from the board.

Speaker Change: Thank you. But in terms of vision, we're clearly chasing this target production from Central Shaft of 80,000 ounces a year. And hopefully we'll get there this year. We have a we have a commitment to return money to shareholders. That's not going to be balanced between.

Thank you thanks, but in terms of vision from.

We're clearly tracing this target production from central shaft of 80000 ounces, a year and hopefully we will get there this year.

We have a we have a commitment to return money to shareholders that is not going to be balanced between returning money to shareholders and retaining some cash to contribute to invest in the company's critics and we really are very excited about not just small degree, but also some of the other opportunities we've been looking at in Zimbabwe.

Speaker Change: returning money to shareholders and retaining some cash to contribute to invest in the company's growth. And we really are very excited.

Speaker Change: about not just Marley Green but also some of the other opportunities we've been looking at in Zimbabwe.

Speaker Change: and you know that as Steve mentioned and one of the reasons why we're stepping down is we see the next sort of five, seven, ten years.

Yes.

<unk> mentioned that one of the reasons why we stepping down as we see the next sort of five 710 years.

Speaker Change: as being quite a high energy period for us as we grow the business from being a single asset operator to becoming a multi-risk, multi-project, de-risked business, again, focused on Zimbabwe. So we think.

Being a quite a high energy.

Period for us as we as we grow the business from being a single asset operator to becoming a multi risk multi multi project derisked business again focused on Zimbabwe. So we think blanket.

Speaker Change: Blanket and having done the central shaft creates a fantastic platform for us to achieve that growth.

Having done the central shelf creates a fantastic platform for us to achieve that growth.

Yeah.

Speaker Change: quite a lot of contacts for people in Zimbabwe and I know there are some Zimbabwean on the call. First, it may be difficult sometimes for you to get hold of people outside Zimbabwe, so I really would encourage you to try and get hold of Debra in Harare, otherwise in North America Patrick and Paul at 3PP, they know as well. In Europe there's Jochen Steiger, but also we have our PR advisors and our nomads in London.

Cuomo contacts for people in Zimbabwe on another lessons about within the cool you first maybe maybe difficult sometimes to get colder people outside so bullish I really would encourage you to try and get a hold of Debra.

In Harare.

Otherwise in North America, Patrick and pool.

<unk> right now as well in Europe .

But you have to stagger.

But also we have our <unk>.

Peer advisors, not like Manhattan and London.

So I think we can go into questions can we come along.

Speaker Change: I do see some questions already, which I'm happy to deal with.

Yes.

Okay.

Do you see some questions already which I'm happy to deal with.

Speaker Change: The first relates to power supply. So power supply is the most significant operating difficulty we face.

The first relates to power supply surplus power supply is is the most significant operating difficulty we face.

Speaker Change: But I don't want it. I don't want people to get it out of proportion. It's actually it's actually a problem that we we believe we've got our arms around.

I don't want to I don't want people to get it out of proportion it's actually there's actually a problem that we believe we got our arms around.

Speaker Change: In terms of first off, we have a full suite of standby diesel gen sets, so we can and do often run the mine completely using diesel. It has a cost implication and an environmental implication, but we can we can still make excellent money using using diesel gen sets. So don't don't think that the mine is going to sit there not producing if the Zimbabwe grid falls over. Having said that, the solar project.

In terms of first off we have a full suite of standby diesel Gen sets. So we can do after around the mine completely using diesel.

It has a cost implication on the environmental implications.

We couldnt.

Through my extra money.

Using using diesel Gen sets.

But the mine is going to say, but not producing because if these in both grid falls over.

Having said that the solar project.

Speaker Change: does make a contribution and already we are focusing, we're beginning to look at a second phase project.

It does make a contribution but already we are we are focusing we are beginning to look at our second phase project to increase the contribution from solar further that will include some solar battery storage.

Speaker Change: to increase the contribution from solar further. That will include some sort of battery storage. And so it will be more expensive. So broadly speaking, 12 megawatt facilities costing about $14 million. The cost per megawatt included batteries will be approximately twice that.

We will be more expensive so broadly speaking.

The 12 megawatts 12 megawatt facilities costing about $14 million.

The cost per megawatt and creative batteries will be approximately twice that so we're not going to go completely off grid, but we will we will hopefully.

Speaker Change: So we're not going to go completely off grid, but we will we will hopefully or hopefully I do expect that we will we will reduce our average cost of power by increasing the contribution from solar.

I do expect that we will we will reduce our average cost of.

Power an increase in the contribution from <unk>.

From Sandler.

Speaker Change: So I'm really comfortable that we've actually got a solution to solar inflation.

Right.

I'm reasonably comfortable that we've actually got a solution to this.

Inflation.

Speaker Change: is another big problem in Zimbabwe. But again, I think we've dealt with it.

He is another big problem in Zimbabwe.

And again I think we're done with it.

Speaker Change: the workers towards the end of the year, what was happening is because the rate of inflation in Zimbabwe is very, very high, what happens is that the RTGS denominated components of our labour bill

Our work is towards the end of the year.

What was happening is because the rate of inflation Zimbabwe is very very high what happens is that the RTG ask denominated component of our labor Bill increases by 40%, 50% for six month period.

Speaker Change: increases by 40-50% for a six-month period.

Speaker Change: But because the exchange rate is only devalued by 10% or 15%, once you translate that higher RTGS salary back into local, into dollars, it gives rise to a very significant, I think it was about 25% increase in the US dollar salary bill. And that was only for six months. So to lance that boil, we took the decision late last year to pay all of our workers 100% in US dollars. And so the question that someone was asking,

Because the exchange rates devalued by 10 or 15% once you translate the higher all TGF salary occupancy into local into into dollars. It gives rise to a very significant I think it was about 25% increase in the U S dollar.

Salary Bill and that was only for six months.

To launch the Boeing when we took the decision late last year to pay all of our work is 100% in U S dollars.

So the question that someone asked was.

Speaker Change: You know, high, high local inflation is a demotivating employees. Well, they're no longer demotivated. They currently get paid to get paid in US dollars. Now they can do what they will with those US dollars. So they're very happy.

High local inflation is that most of your employees, while they're no longer demotivated. They currently get paid they get put in U S dollars now they could do what they want whether you guys told us that they're very happy okay. The workforce has grown more quickly than we expected and thats because the grade was lower than we expected. So we're having to move more tons to achieve that.

Speaker Change: The workforce has grown more quickly than we expected and that's because the grade was lower than we expected and so we're having to move more tonnes to achieve the target of 80,000 ounces and that's also flown through in terms of needing additional billing capacity and additional CIL capacity. It is at the margin. Okay, it's not a significant.

Good of 80000 ounces must also flowing through in terms of.

Needing additional lending capacity.

Additional CIL capacity it does at the margin I would tell you it's not a significant problem.

Speaker Change: So I think that deals with inflation.

So I think hopefully that deals with inflation.

Speaker Change: Just to say, if people want to ask questions, you can just raise your hand and we are able to unmute.

So.

If people want to ask questions. You can just raise you raise your hand.

Speaker Change: Yeah, I think Howard's trying to raise a question. So I think, Howard, if you raise your hand, I think then Camilla will unmute you. I think he's saying that his computer doesn't have a microphone, so I don't think he's able to.

Yes, I think how the how it is trying to raise the question sort of income.

Howard if you raise your hand and I thank them Camilla will.

<unk> doesn't have a microphone. So I don't think he is April .

I think he is able to speak.

Speaker Change: Okay. Howie should be able to talk now. There you go, Howie. You're in.

Okay, how we should be able to talk now they go home at year end.

Howie: Can you hear me? Yeah. Yeah. Yeah. Oh, good. Good. Yeah.

Can you hear me yeah, Yeah, yeah, Okay, great yes.

Speaker Change: I'm coming, I'm joining by both phone and computer. First, a minor question and then a few comments, all positive.

Hum.

Joining by phone.

Computer first.

A question and then a few comments are all positive.

Speaker Change: Could you save $3 million in electricity once the solar plant, $3 million a year? Yes, we would. Yeah, the answer, sorry to be clear, it's about $3 million a year, which would equate to something between $35 million and $40 million.

Could you say $3 million.

Christie once the solar plant $3 million a year.

Yes.

Yeah. The answer the answer sorry to be clear, it's about it's about $3 million, a year, which would equate to something between 35 and $40 per ounce, which is about 5% of our own mine cost per Mcf Howard completely right.

Speaker Change: dollars per ounce, which is about 5% of our online cost per ounce. Yes, Howard, completely right.

Speaker Change: It gets a little bit of complexity in terms of the accounting, which I won't bore you with, but on a consolidated level, that benefit will get recognised.

Well done.

A little bit of complexity in terms of the accounting, which I won't bore you with that on a consolidated level a benefit we will get recognized yet.

Speaker Change: Okay. Second, on your comment about the dividend, if you keep some money to grow, people will find an excuse to buy your stock. Just grow the business. They'll figure it out. Somebody figured out Buffett stock, and here it is, $515,000, with maybe one broker report in 50 or 60 years. Somebody figured it out. Yeah. Second.

Okay.

Second on your comment about the dividend.

It keeps some money to grow people will find an excuse to buy your stock.

Grow their business they'll figure it out.

Somebody figured somebody figured out buffer stock and here it is $515000.

Maybe maybe one brokerage important 50 or 60 years somebody figured it out.

Second.

Maui Green.

Speaker Change: appears to have the potential to grow your production another 65 or 75 percent per year once you get it operational. Is that correct?

Appears to have the potential to grow your production, another 65 or 75% per year once you get it operational.

Correct.

Speaker Change: Well yeah, we can't indicative, I don't know where you get that from, we think Marder Green could support an asset of 60 to 70,000 ounces a year, so that's about the same number, yeah 60 over 80 at three quarters, yeah, yeah, yeah that's and it only costs you four million bucks. Well hold on, hold on, hold on.

Well, yeah, we kind of indicative of another way to get that done.

We think mondegreen could support an asset of 60 to 70000 ounces a year.

So it does Scott.

At the same number yes fixed fee of R&D at three quarters yeah.

Yes.

Okay.

Sure.

Well on all of them, we've got to build it up between the hours.

Speaker Change: The gold won't jump out of the ground.

The goal.

The Goldberg jumped out of the ground.

Speaker Change: No, no, I understand you have to spend money, but $4 million for almost a million ounces is pretty cheap, even in Zimbabwe.

No I understand you have to spend money, but 4 million bucks for almost familiar announces its pretty cheap even in Zimbabwe.

Speaker Change: And finally, for Steve, people forget that seven or eight years ago, when the price of gold was $12.50 and Zimbabwean inflation was 4 million zillion percent, you were able to

And finally for Steve.

People forget that seven or eight years ago, when the price of gold was $12 50 in Zimbabwe inflation of $4 million million percent.

You were able to guide Caledonia through production and then plan.

Steve Curtis: Caledonia through production and then plan

Steve Curtis: to expand the business through the best kind of financing, retained earnings.

We're expanding the business through the best kind of financing retained earnings.

Steve Curtis: and here we are. So, on your way out. Nice job.

And here, we are so on your way out nice job.

Speaker Change: Thank you, Howie. And and remember, remember the team that was with me at that time is pretty much still here. And that's that. I think shareholders should should really remember there is there is no disruption, no disruption.

Thank you Howie.

And remember remainder the team that was with me at that time.

That's what we're here and that's that I think shareholders should should really remember there is there is no disruption no disruption.

Speaker Change: Yeah, I forgot to mention that, that nine-tenths of the team is still there, so there should only be beneficial changes. Correct.

Yes, I forgot to mention that.

So the team is still there so.

Sure I'll be beneficial changes correct.

Alright, Thank you Harry.

Right. Thank you everybody.

Speaker Change: Thank you. We've got one more question here, so.

Okay.

We've got one more question here right.

Okay.

Hi, Thanks, Thanks Mark.

Okay.

Speaker Change: Just a quick question on the fact that we've seen quite a number of international gold players coming into Zimbabwe and acquiring gold assets. What is your view in terms of opportunities going forward? Do you think they will remain as cheap as they are or what do you think will happen?

Go ahead, John I'm, just my question on the Aqua.

Thanks Austin.

Just a quick question on the fit that we're seeing quite a number of our.

International good players coming into Zimbabwe end up quieting, our gold assets.

What is your view in terms of opportunities going forward do you think they will remain as cheap as they are or what do you think it will happen.

Speaker Change: I think one of the prime difficulties we face

I think one of the prime difficulties we faced.

Speaker Change: over the course of recent years has been has been the quite obscenely ridiculous price expectation.

Over the course of recent years, it's been that's been the <unk>.

Obscene their ridiculous price expectations.

Speaker Change: that people who hold Zimbabwean documents have as to what those documents are worth.

The people, who hold Zimbabwe its hard as to what that's worth.

Speaker Change: and it's been a real struggle to actually get them to understand that they don't have a producing mind, they often don't have a resource base, they might think they've got gold there but they don't know they've got gold there and they expect people like Caledonia to spend the money to prove what the resource base and then so we found a big disconnect between realistic price expectations and local price expectations and hopefully that's going to moderate.

And it's been a real struggle to actually get them to understand that they don't have a producing mine. They often don't have a resource base demand think amongst thing they've got colder weather, neither got Goldberg and they expect.

[noise] Caledonia to spend the money to prove up the resource base and then.

So we found a big disconnect.

Between.

Realistic price expectations on local price expectations, and hopefully that's going to moderate.

Speaker Change: Zimbabwe is a challenging place to operate, I don't want to overdo it because we're very successful at it, but if you're not operating in Zimbabwe

The bulk of it is a challenging place to operate.

Just the.

I don't want to overdo it because we were very successful at it but if you're not operating in Zimbabwe.

Speaker Change: it is quite a, you've got to be quite brave, I think, to jump into Zimbabwe and start developing new mines. So we have seen people come into the sector and they're very welcome, very, very welcome and that's great because it means that finally international

It is quanta.

You've got a quad, Brian sorry to jump into Zimbabwe.

Install developing new mines.

We have seen people people come into the sector on the very welcoming very very welcome.

And that's a great it's Greg.

Because it means that finally international investors will be a professional investors or the market in the gold space are now beginning to recognize the real the real merits of Zimbabwe not as good.

Speaker Change: will be a professional investors in the mine in the gold space are now beginning to recognise the real the real merits of Zimbabwe. And that's good. You know, we're in the water and we'd like other people to come in come into it. That was a nice. But we're perfectly we're perfectly

Women are wearing the water and we'd like other people to come in coming two weeks that was a nice.

But we're clearly we're perfectly happy to compete alongside other gold producers processes, Zimbabwe perfectly happy.

Speaker Change: to compete alongside other gold producers for assets in Zimbabwe. Perfectly happy.

Maybe just a quick comment from me market.

Speaker Change: We actually think having other internationally reputable organizations in the country would help investors enormously. One of our challenges is that we're the only one, the only internationally listed

Alright.

We actually think having other internationally repeatable organizations in the country would help invest enormous you one of our challenges is that we're the only one is donny internationally listed.

Speaker Change: mining company in Zimbabwe. So you take a country like Burkina, where there's a good 10 or 12 internationally recognized reputable operators there, I don't think it's justifiable that Zimbabwe, I don't think it's any less risky than Burkina or other countries, not to knock those countries.

Mining company in Zimbabwe, you take a country like Makena, where there's a good 10 or 12 internationally recognized reputable operators I don't think is justifiable Zimbabwe I don't think its a less risky.

Other cash not to knock those countries, but but it's because there's lots of other people there there's other benchmarks as other comparisons frankly.

Speaker Change: But it's because there's lots of other people there. There's other benchmarks. There's other comparisons.

Speaker Change: Frankly, we think we have a competitive advantage in the country and so we're not scared of any competition, but a few other reputable players, we think that rising tide would lift all the boats and would be helpful.

Frankly, we think we have a competitive advantage in the country and so we don't we're not scared of any competition.

But a few other reputable players, we think that rising tide would lift all boats and that would be helpful.

So a question about it.

Speaker Change: The question about CentraShaft, yes, the CentraShaft will start hoisting ore towards the end of this year and then increasingly over 2023 will start hoisting more ore and in the order of course of events, No. 4 shaft would stop operating because No. 4 shaft doesn't really have access below 750 metres, but we believe there's actually a reasonable prospect

Thank you.

So a question about SUNFISH off yes, the central shaft will will start hoisting or towards the end of this year and then increasingly over 2023 will start hoisting more oil and and absent.

The order of course events number four shaft would would stop operating because number four shaft doesn't really have access to about 750 meters.

We believe there's actually a reasonable prospect that.

Speaker Change: that we may continue to mine remnants above 750 metres, so it could well be that central shaft

We may continue to mine remnants.

750 meter slightly it could well be the central shaft keeps going for longer than what I expected because it is mining if mining material that we.

Speaker Change: keeps going for longer than we'd expected because it is mining material that we didn't expect to be mining when we set about this plan. But Central Shaft will certainly stop hoisting all by the end of the year.

We didn't expect to be mining when we sent about this plan, but central shelf central shelf will certainly start hosting rule by the end of the year.

Although the standards on the solar project everything is on its way it's either.

Speaker Change: in country on its way overland or on a boat. I don't think we are at risk of any further supply constraints. I guess what's driving that question is the current news about production difficulties in China as they face another wave of Covid. As I understand it, pretty much everything we need is either on its way or on a ship.

In country Onyx way overland.

Right.

I think we are risk of any further.

Apply constraints and I guess my quick I guess, what's driving that question is.

As the current news about the production difficulties in China of my face. Another is another another wave of Covid doesn't understand it.

Pretty much everything we need is either on its way on a ship.

Okay.

I think that's it.

Oh.

Good.

Okay great.

Speaker Change: Don't see any new questions, so let me, just on behalf of the team who've been here today, say thank you to all of you for joining. I hope you've enjoyed the presentation. As I said, the slides that we did flip through quite quickly are available on our website.

Yes.

We don't see any new questions.

Let me just on behalf of the team who have been here today say, thank you to all of you for joining I hope you've enjoyed the presentation as I said the sides that we did flip to quite correctly are available on our web site.

Speaker Change: Our ESG report is on our website, and look out for the new one that will be published during this year. So thank you very much for attending, and we will be in touch with you through our normal communication channels in the near future. Thanks a lot, everyone. Bye now.

Our ESG report is on our website.

And look out for the new one that will be published during during this year. So thank you very much for attending and we will be in touch with us through our normal communication channels in the near future. Thanks, a lot everyone by now.

Okay.

Yeah.

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