Market Newsdesk

LONDON, Nov. 12, 2020 (GLOBE NEWSWIRE) — Horizonte Minerals Plc, (AIM: HZM; TSX: HZM) (the “Company” or “Horizonte”), the nickel development company focused on Brazil, announces its unaudited financial results for the three month period to 30 September 2020 and the Management Discussion and Analysis for the same period. Both of the aforementioned documents have been posted on the Company’s website www.horizonteminerals.com and are also available on SEDAR at www.sedar.com.

Highlights for the Period

• Horizonte remains well-funded to advance Araguaia towards being construction ready with strong cash position of £13.6m;
• Project financing process continues to progress with a number of key milestones delivered;
• A syndicate of five international financial institutions mandated for a US$325 million senior debt facility to part fund the development of Araguaia;
• BNP Paribas, ING Capital LLC, Mizuho Bank, Ltd., Natixis (New York Branch), and Société Générale will act as the Mandated Lead Arrangers;
• Inaugural Sustainability Report published on 17 August 2020. The Company recognises the importance of conveying its efforts and achievements around the areas of environmental stewardship, social responsibility and corporate governance to its various stakeholders as it moves towards construction at Araguaia;
• The Company has continued to support local communities around the project through the provision of food parcels and health and hygiene guidance in response to the pandemic; and
• Nickel market fundamentals remain strong and are expected to benefit from global stimulus measures, with nickel price returning to pre-Covid levels of approximately US$15,700/t.

Horizonte Minerals plc

Condensed Consolidated Interim Financial Statements for the nine and three months ended 30 September 2020

Condensed consolidated statement of comprehensive income

		9 months ended 30 September				3 months ended 30 September
		2020		2019		2020		2019
		Unaudited		Unaudited		Unaudited		Unaudited
	Notes	£		£		£		£
Continuing operations
Revenue		–		–		–		–
Cost of sales		–		–		–		–
Gross profit		–		–		–		–
Administrative expenses		(2,342,989	)	(1,910,913	)	(777,847	))	(941,996	)
Charge for share options granted		–		(290,833	)	–		(53,662	)
Change in value of contingent consideration		(79,425	)	145,561		311,735		(46,640	)
Gain/(Loss) on foreign exchange		410,804		(21,706	)	(716,018	)	(17,657	)
Loss from operations		(2,011,610	)	(2,077,891	)	(1,182,130	)	(1,059,955	)
Finance income		122,907		50,085		32,177		16,294
Finance costs		(2,969,053	)	(222,788	)	(1,027,349	)	(75,951	)
Loss before taxation		(4,857,756	)	(2,250,594	)	(2,177,302	)	( 1,119,612	)
Taxation		(51,071	)	–		(51,071	)	–
Loss for the year from continuing operations		( 4,908,827	)	(2,250,594	)	(2,228,373	)	(1,119,612	)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss Change in value of available for sale financial assets
Currency translation differences on translating foreign operations		(9,232,975	)	(1,093,862	)	(1,165,298	)	(1,559,385	)
Other comprehensive income for the period, net of tax		( 9,232,975	)	(1,093,862	)	( 1,165,298	)	(1,559,385	)
Total comprehensive income for the period
attributable to equity holders of the Company		(14,141,802	)	(3,344,456	)	(3,393,671	)	(2,678,997	)
Earnings per share from continuing operations attributable to the equity holders of the Company
Basic and diluted (pence per share)	9	(0.339	)	(0.157	)	(0.154	)	(0.078	)

Condensed consolidated statement of financial position

		30 September 2020		31 December 2019
		Unaudited		Audited
	Notes	£		£
Assets
Non-current assets
Intangible assets	6	8,241,277		39,317,506
Property, plant & equipment		24,924,599		483
		33,165,876		39,317,989
Current assets
Trade and other receivables		2,391,659		2,381,535
Cash and cash equivalents		13,584,055		17,760,330
		15,975,714		20,141,865
Total assets		49,141,590		59,459,854
Equity and liabilities
Equity attributable to owners of the parent
Issued capital	7	14,463,773		14,463,773
Share premium	7	41,785,306		41,785,306
Other reserves		(13,899,906	)	(4,666,930	)
Accumulated losses		(24,743,918	)	(19,835,092	)
Total equity		17,698,255		31,747,057
Liabilities
Non-current liabilities
Contingent consideration		6,666,016		6,246,071
Royalty Finance		23,594,661		–
Deferred tax liabilities		155,692		212,382
		30,416,369		6,458,453
Current liabilities
Trade and other payables		1,026,966		21,254,344
Deferred consideration		–		–
		1,026,966		21,254,344
Total liabilities		31,443,335		27,712,797
Total equity and liabilities		49,141,590		59,459,854

Condensed statement of changes in shareholders’ equity

	Attributable to the owners of the parent
	Share capital £		Share premium £		Accumulated losses £		Other reserves £		Total £
As at 1 January 2019	14,325,218		41,664,018		(16,990,291	)	(2,039,991	)	36,958,954
Comprehensive income
Loss for the period	–		–		(2,250,594	)	–		(2,250,594	)
Other comprehensive income
Currency translation differences	–		–		–		(1,093,862	)	(1,093,862	)
Total comprehensive income	–		–		(2,250,594	)	(1,093,862	)	(3,344,456	)
Transactions with owners
Issue of ordinary shares	138,555		121,288		–		–		259,843
Issue costs	–		–		–		–		–
Share based payments	–		–		290,833		–		290,833
Total transactions with owners	138,555		121,288		290,833		–		550,676
As at 30 September 2019 (unaudited)	14,463,773		41,785,306		(18,950,052	)	(3,133,853	)	34,165,174

	Attributable to the owners of the parent
	Share capital £		Share premium £		Accumulated losses £		Other reserves £		Total £
As at 1 January 2020	14,463,773		41,785,306		(19,835,092	)	(4,666,930	)	31,747,057
Comprehensive income
Loss for the period	–		–		(4,908,827	)	–		(4,908,827	)
Other comprehensive income
Currency translation differences	–		–		–		(9,232,975	)	(9,232,975	)
Total comprehensive income	–		–		(4,908,827	)	(9,232,975	)	(14,141,802	)
Transactions with owners
Issue of ordinary shares	30,000		63,000		–		–		93,000
Issue costs	–		–		–		–		–
Share based payments	–		–		–		–		–
Total transactions with owners	30,000		63,000		–		–		93,000
As at 30 September 2020 (unaudited)	14,493,773		41,848,306		(24,743,919	)	(13,899,905	)	17,698,255

Condensed Consolidated Statement of Cash Flows

		9 months ended 30 September				3 months ended 30 September
		2020		2019		2020		2019
		Unaudited		Unaudited		Unaudited		Unaudited
		£		£		£		£
Cash flows from operating activities
Loss before taxation		(4,908,827	)	(2,250,594	)	(2,228,373	)	(1,119,612	)
Interest income		(122,907	)	(50,085	)	(32,177	)	(16,294	)
Finance costs		2,790,062		222,788		947,785		75,951
Exchange differences		(410,804	)	21,706		716,018		17,657
Employee share options charge		–		290,833		–		53,662
Change in fair value of contingent consideration		79,425		(145,561	)	(311,735	)	46,640
Change in fair value of derivative asset		178,991		–		79,564		–
Depreciation		–		–		–		–
Operating loss before changes in working capital		(2,394,060	)	(1,910,913	)	(828,918	)	(941,996	)
Decrease/(increase) in trade and other receivables		50,742		(45,771	)	(2,384	)	(42,496	)
(Decrease)/increase in trade and other payables		152,845		468,782		290,166		442,376
Net cash outflow from operating activities		(2,190,473	)	(1,487,902	)	(541,136	)	(542,116	)
Cash flows from investing activities
Purchase of intangible assets		(2,006,910	)	(1,944,388	)	(680,325	)	(655,180	)
Purchase of property, plant and equipment		(605,603	)	–		(198,360	)	–
Interest received		122,907		50,085		32,177		16,294
Net cash used in investing activities		(2,489,606	)	(1,894,303	)	(846,508	)	(638,886	)
Cash flows from financing activities
Proceeds form issue of ordinary shares		93,000		–		93,000		–
Issue costs		–		–		–		–
Net cash used in financing activities		93,000		–		93,000		–
Net decrease in cash and cash equivalents		(4,587,079	)	(3,382,205	)	(1,294,644	)	(1,181,002	)
Cash and cash equivalents at beginning of period		17,760,330		6,527,115		15,594,717		4,322,699
Exchange gain/(loss) on cash and cash equivalents		410,804		(20,870	)	(716,018	)	(17,657	)
Cash and cash equivalents at end of the period		13,584,055		3,124,040		13,584,055		3,124,040

                                                                                                                                        

Notes to the Financial Statements

1.  General information

The principal activity of the Company and its subsidiaries (together ‘the Group’) is the exploration and development of precious and base metals. There is no seasonality or cyclicality of the Group’s operations.

The Company’s shares are listed on the Alternative Investment Market of the London Stock Exchange (AIM) and on the Toronto Stock Exchange (TSX). The Company is incorporated and domiciled in the United Kingdom. The address of its registered office is Rex House, 4-12 Regent Street, London SW1Y 4RG.

2. 

Basis of preparation

The condensed consolidated interim financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards and in accordance with International Accounting Standard 34 Interim Financial Reporting. The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2019, which have been prepared in accordance with International Financial Reporting Standards (IFRS).

The condensed consolidated interim financial statements set out above do not constitute statutory accounts within the meaning of the Companies Act 2006. They have been prepared on a going concern basis in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS). Statutory financial statements for the year ended 31 December 2019 were approved by the Board of Directors on 7 April 2020 and delivered to the Registrar of Companies. The report of the auditors on those financial statements was unqualified.

The condensed consolidated interim financial statements of the Company have not been audited or reviewed by the Company’s auditor, BDO LLP.

Going concern

The Directors, having made appropriate enquiries, consider that adequate resources exist for the Group to continue in operational existence for the foreseeable future and that, therefore, it is appropriate to adopt the going concern basis in preparing the condensed consolidated interim financial statements for the period ended 30 September 2020. Please refer to note 2.2 in the annual report for 2019 for the assessment of the current Covid-19 pandemic on the operations of the Group.

Risks and uncertainties

The Board continuously assesses and monitors the key risks of the business. The key risks that could affect the Group’s medium term performance and the factors that mitigate those risks have not substantially changed from those set out in the Group’s 2019 Annual Report and Financial Statements, a copy of which is available on the Group’s website: www.horizonteminerals.com and on Sedar: www.sedar.com The key financial risks are liquidity risk, foreign exchange risk, credit risk, price risk and interest rate risk.

Critical accounting estimates

The preparation of condensed consolidated interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the end of the reporting period. Significant items subject to such estimates are set out in note 4 of the Group’s 2019 Annual Report and Financial Statements. The nature and amounts of such estimates have not changed significantly during the interim period.

3.  Significant accounting policies

The condensed consolidated interim financial statements have been prepared under the historical cost convention as modified by the revaluation of certain of the subsidiaries’ assets and liabilities to fair value for consolidation purposes.

The same accounting policies, presentation and methods of computation have been followed in these condensed consolidated interim financial statements as were applied in the preparation of the Group’s Financial Statements for the year ended 31 December 2019.

4  Segmental reporting

The Group operates principally in the UK and Brazil, with operations managed on a project by project basis within each geographical area. Activities in the UK are mainly administrative in nature whilst the activities in Brazil relate to exploration and evaluation work. The reports used by the chief operating decision maker are based on these geographical segments.

2020	UK		Brazil		Other		Total
	9 months ended 30 September 2020 £		9 months ended 30 September 2020 £		9 months ended 30 September 2020 £		9 months ended 30 September 2020 £
Revenue	–		–				–
Administrative expenses	(1,636,689	)	(407,779	)	(298,521	)	(2,342,989	)
Loss0020on foreign exchange	731,429		(338,984	)	18,359		410,804
(Loss) from operations per reportable segment	(905,260	)	(746,763	)	(280,162	)	(1,932,185	)
Inter segment revenues	–		–		–		–
Depreciation charges	–		–		–		–
Additions and foreign exchange movements to non-current assets			(6,482,508	)	–		(6,482,508	)
Reportable segment assets	7,303,457		39,264,577		2,573,556		49,141,590
Reportable segment liabilities	7,076,456		763,181		23,603,698		31,443,33
2019	UK		Brazil		Other		Total
	9 months ended 30 September 2019 £		9 months ended 30 September 2019 £		9 months ended 30 September 2019 £		9 months ended 30 September 2019 £
Revenue	–		–		–		–
Administrative expenses	(1,433,182	)	(477,731	)	–		(1,910,913	)
Loss on foreign exchange	(6,655	)	(15,051	)	–		(21,706	)
(Loss) from operations per reportable segment	(1,439,837	)	(492,782	)	–		(1,932,619	)
Inter segment revenues	–		–		–		–
Depreciation charges	–		–		–		–
Additions and foreign exchange movements to non-current assets	–		774,255		–		774,255
Reportable segment assets	2,767,328		36,932,142		–		39,699,470
Reportable segment liabilities	5,172,502		361,794		–		5,534,296

2020	UK		Brazil		Other		Total
	3 months ended 30 September 2020		3 months ended 30 September 2020		3 months ended 30 September 2020		3 months ended 30 September 2020
	£		£		£		£
Revenue	–		–		–		–
Administrative expenses	(609,868	)	(158,942	)	(9,037	)	(777,847	)
Loss on foreign exchange	(334,566	)	(374,326	)	(7,126	)	(716,018	)
(Loss) from operations per	(944,434	)	(533,268	)	(16,163	)	(1,493,865	)
reportable segment
Inter segment revenues	–		–		–		–
Depreciation charges	–		–		–		–
Additions and foreign exchange movements to non-current assets	–		(230,005	)	–		(230,005	)

2019	UK		Brazil		Other		Total
	3 months ended 30 September 2019		3 months ended 30 September 2019		3 months ended 30 September 2019		3 months ended 30 September  2019
	£		£		£		£
Revenue	–		–		–		–
Administrative expenses	(794,076	)	(147,920	)	–		(941,996	)
Profit/(Loss) on foreign exchange	5,689		(23,346	)	–		(17,657	)
(Loss) from operations per	(788,387	)	(171,266	)	–		(959,653	)
reportable segment
Inter segment revenues	–		–		–		–
Depreciation charges	–		–		–		–
Additions and foreign exchange movements to non-current assets	–		(969,007	)	–		(969,007	)

A reconciliation of adjusted loss from operations per reportable segment to loss before tax is provided as follows:

	9 months ended 30 September 2020		9 months ended 30 September 2019		3 months ended 30 September 2020		3 months ended 30 September 2019
	£		£		£		£
Loss from operations per reportable segment	(1,932,185	)	(1,932,619	)	(1,493,865	)	(959,653	)
– Change in fair value of contingent consideration	(79,425	)	145,561		311,735		(46,640	)
– Change in fair value of derivative asset	(178,991	)			(79,564	)
– Charge for share options granted	–		(290,833	)	–		(53,662	)
– Finance income	122,907		50,085		32,177		16,294
– Finance costs	(2,790,062	)	(222,788	)	(947,785	)	(75,951	)
Loss for the period from continuing operations	(4,857,756	)	(2,250,594	)	(2,177,302	)	(1,119,612	)

5  Change in Fair Value of Contingent Consideration

Contingent Consideration payable to Xstrata Brasil Mineração Ltda.

The contingent consideration payable to Xstrata Brasil Mineração Ltda has a carrying value of £3,176,017 at 30 September 2020 (30 September 2019: £4,640,847). It comprises US$5,000,000 consideration in cash as at the date of first commercial production from any of the resource areas within the Enlarged Project area. The key assumptions underlying the treatment of the contingent consideration the US$5,000,000 are based on the current rates of tax on profits in Brazil of 34% and a discount factor of 7.0% along with the estimated date of first commercial production.  

As at 30 September 2020, there was a finance expense of £162,240 (2019: £222,788) recognised in finance costs within the Statement of Comprehensive Income in respect of this contingent consideration arrangement, as the discount applied to the contingent consideration at the date of acquisition was unwound.

The change in the fair value of contingent consideration payable to Xstrata Brasil Mineração Ltda generated a loss of £37,842 for the nine months ended 30 September 2020 (30 September 2019: £145,561 debit) due to changes in the exchange rate of the functional currency in which the liability is payable.

Contingent Consideration payable to Vale Metais Basicos S.A.

The contingent consideration payable to Vale Metais Basicos S.A. has a carrying value of £3,489,996 at 30 September 2020 (2019: £nil). It comprises US$6,000,000 consideration in cash as at the date of first commercial production from the Vermelho project and was recognised for the first time in December 2019, following the publication of a PFS on the project. The key assumptions underlying the treatment of the contingent consideration the US$6,000,000 are the same as those for the Xstrata contingent consideration and are based on the current rates of tax on profits in Brazil of 34% and a discount factor of 7.0% along with the estimated date of first commercial production.

As at 30 September 2020, there was a finance expense of £178,280 (2019: £nil ) recognised in finance costs within the Statement of Comprehensive Income in respect of this contingent consideration arrangement, as the discount applied to the contingent consideration at the date of acquisition was unwound.

The change in the fair value of contingent consideration payable to Vale Metais Basicos S.A. generated a loss of £41,583 for the nine months ended 30 September 2020 (2019: £nil) due to changes in the value of the functional currency in which the liability is payable (USD).

6 Finance income and costs

	9 months ended 30 September 2020		9 months ended 30 September 2019
	£		£
Finance income
– Interest income on cash and short-term deposits	122,907		–
Finance costs			–
– Contingent and deferred consideration: unwinding of discount	(340,520	)	–
– Amortisation of Royalty Finance	(2,449,542	)	–
– Royalty Fair Value Adjustment	(178,991	)	–
– Movement in fair value of derivative asset	–		–
Total finance costs	(2,969,053	)	–
Net finance costs	(2,846,146	)	–

7  Intangible assets

Intangible assets comprise exploration and evaluation costs and goodwill. Exploration and evaluation costs comprise internally generated and acquired assets.

	Goodwill		Exploration licences		Exploration and evaluation costs		Total
	£		£		£		£
Cost
At 1 January 2020	210,585		4,534,392		2,312,467		7,057,444
Additions	–		–		1,893,618		1,893,618
Exchange rate movements	(56,209	)	95,439		(749,015	)	(709,785	)
Net book amount at 30 September 2020	154,376		4,629,831		3,457,070		8,241,277

8  Share Capital and Share Premium       

Issued and fully paid	Number of shares		Ordinary shares £		Share premium £		Total £
At 1 January 2020	1,446,377,287		14,463,773		41,785,306		56,249,079
Issue of equity	3,000,000		30,000		63,000		93,000
At 30 September 2020	1,449,377,287		14,493,773		41,848,306		56,342,079

9  Dividends

No dividend has been declared or paid by the Company during the nine months ended 30 September 2020 (2019: nil).

10  Earnings per share

The calculation of the basic loss per share of 0.339 pence for the 9 months ended 30 Sept 2020 (30 Sept 2019 loss per share: 0.157 pence) is based on the loss attributable to the equity holders of the Company of £ (4,908,827) for the nine month period ended 30 Sept 2020 (30 Sept 2019: (2,250,594)) divided by the weighted average number of shares in issue during the period of 1,446,643,856 (weighted average number of shares for the 9 months ended 30 Sept 2019: 1,435,584,489).

The calculation of the basic loss per share of 0.154 pence for the 3 months ended 30 Sept 2020 (30 Sept 2019 loss per share: 0.078 pence) is based on the loss attributable to the equity holders of the Company of £ (2,228,373) for the three month period ended 30 June 2020 (3 months ended 30 Sept 2019: (£1,169,612) divided by the weighted average number of shares in issue during the period of 1,447,217,722 (weighted average number of shares for the 3 months ended 30 Sept 2019: 1,435,866,256).

The basic and diluted loss per share is the same, as the effect of the exercise of share options would be to decrease the loss per share.

Details of share options that could potentially dilute earnings per share in future periods are disclosed in the notes to the Group’s Annual Report and Financial Statements for the year ended 31 December 2019 and in note 10 below.

11  Issue of Share Options

On 12 February 2019, the Company awarded 2,000,000 share options to leading members of the Brazilian operations team. All of these share options have an exercise price of 4.80 pence. One third of the options are exercisable from August 2019, one third from February 2019 and one third from August 2020.

12  Ultimate controlling party

The Directors believe there to be no ultimate controlling party.

13  Related party transactions

The nature of related party transactions of the Group has not changed from those described in the Group’s Annual Report and Financial Statements for the year ended 31 December 2019.

14  Events after the reporting period

There are no events which have occurred after the reporting period which would be material to the financial statements.

Approval of interim financial statements

These Condensed Consolidated Interim Financial Statements were approved by the Board of Directors on 10 November 2020.

For further information contact:

Horizonte Minerals plc
Jeremy Martin (CEO) Anna Legge (Corporate Communications)	+44 (0)203 356 2901 [email protected]
Peel Hunt (NOMAD & Joint Broker)
Ross Allister David McKeown	+44 (0)207 418 8900

About Horizonte Minerals:

Horizonte Minerals plc is an AIM and TSX-listed nickel development company focused in Brazil. The Company is developing the Araguaia project, as the next major ferronickel mine in Brazil, and the Vermelho nickel-cobalt project, with the aim of being able to supply nickel and cobalt to the EV battery market. Both projects are 100% owned.

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

Except for statements of historical fact relating to the Company, certain information contained in this press release constitutes “forward-looking information” under Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the potential of the Company’s current or future property mineral projects; the success of exploration and mining activities; cost and timing of future exploration, production and development; the estimation of mineral resources and reserves and the ability of the Company to achieve its goals in respect of growing its mineral resources; the realization of mineral resource and reserve estimates. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, and are inherently subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to risks related to: exploration and mining risks, competition from competitors with greater capital; the Company’s lack of experience with respect to development-stage mining operations; fluctuations in metal prices; uninsured risks; environmental and other regulatory requirements; exploration, mining and other licences; the Company’s future payment obligations; potential disputes with respect to the Company’s title to, and the area of, its mining concessions; the Company’s dependence on its ability to obtain sufficient financing in the future; the Company’s dependence on its relationships with third parties; the Company’s joint ventures; the potential of currency fluctuations and political or economic instability  in countries in which the Company operates; currency exchange fluctuations; the Company’s ability to manage its growth effectively; the trading market for the ordinary shares of the Company; uncertainty with respect to the Company’s plans to continue to develop its operations and new projects; the Company’s dependence on key personnel; possible conflicts of interest of directors and officers of the Company, and various risks associated with the legal and regulatory framework within which the Company operates. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

ST HELIER, Jersey, Nov. 12, 2020 (GLOBE NEWSWIRE) — Caledonia Mining Corporation Plc (NYSE AMERICAN: CMCL; AIM: CMCL) (“Caledonia” or the “Company”) announces its operating and financial results for the quarter and the nine months ended September 30, 2020 (the “Quarter” and “Nine Months ” respectively). Further information on the financial and operating results for the Quarter and Nine Months can be found in the management discussion and analysis (“MD&A”) and the unaudited financial statements which are available on the Company’s website and have been filed on SEDAR.

Financial
Highlights
for the Quarter

• Gross revenues of $25.4 million, a 27 per cent increase on the $20.0 million achieved in the third quarter of 2019 (“Q3 2019”).
• Gross profit¹ of $12.5 million, a 47 per cent increase on the $8.5 million in Q3 2019 at a gross margin of 49 per cent (Q3 2019, 43 per cent).
• EBITDA² (excluding net foreign exchange gains and share based payments) of $11.2 million, a 34 per cent increase on the $8.3 million in Q3 2019 at a margin of 44 per cent (Q3 2019, 42 per cent).
• The on-mine cost per ounce³ increased from $686 in Q3 2019 to $758 due to costs associated with COVID-19, a share-based payment expense and increased use of the diesel generators.
• The all-in sustaining cost per ounce³ increased from $872 in Q3 2019 to $1,119 due to a higher insurance premium and an increased share-based payment expense.
• Basic IFRS earnings per share (“EPS”) of 36.6 cents (Q3 2019, 63.4 cents). IFRS earnings for the Quarter were adversely affected by a lower foreign exchange gain and higher taxation.
• Adjusted EPS³ of 34.1 cents (Q3 2019, 15.8 cents).
• Net cash from operating activities of $5.3 million (Q3 2019, $4.9 million).
• Net cash and cash equivalents of $21.6 million (December 31, 2019, $8.9 million).
• Total dividend paid in the Quarter of 8.5 cents per share; a further dividend at the increased rate of 10 cents per share was paid in October.

Operating Highlights

• 15,155 ounces of gold produced in the Quarter (Q3 2019, 13,646 ounces); 42,887 ounces produced in the Nine Months (first nine months of 2019, 38,306 ounces).
• Tonnes mined and milled in the Quarter increased by 10 per cent compared to Q3 2019; recoveries were also slightly improved.
• Equipping of Central Shaft continued in the Quarter at an increased rate as operations returned to normal following the relaxation of measures to prevent the spread of COVID-19.

Effect of COVID-19
and
Outlook

• COVID-19 had no effect on production in the Quarter which was above target for the Nine Months.
• Production guidance for 2020 increased from 53,000 to 56,000 ounces to 55,000 to 58,000 ounces.
• Progress on the Central Shaft returned to the planned rate as travel and transport restrictions were lifted. Central Shaft is expected to be fully equipped by the end of 2020 and to be commissioned in the first quarter of 2021 – approximately three months later than expected due to the delays arising from COVID-19. Production guidance for 2021 is 61,000 to 67,000 ounces; guidance for 2022 is approximately 80,000 ounces.
• Voltalia, an international renewable energy provider, has been appointed as the contractor for the 12MW solar project which is expected to be commissioned before the end of 2021 and is expected to provide approximately 27 per cent of Blanket’s average daily electricity requirements.

Dividend

• The July dividend was increased by 13.3 per cent to 8.5 cents per share and the October dividend was further increased to 10 cents per share following the continued strong financial and operating performance.
• The cumulative increase in the dividend per share since January 2020 is 45 per cent.
• Further dividend increases will depend on the balance between delivering returns to shareholders and pursuing the significant growth opportunities within Zimbabwe.

Steve Curtis, Chief Executive
O
fficer
,
commented
:

“I am delighted by Blanket Mine’s continued strong operating performance in the Quarter.Despite the disruption caused by the COVID-19 pandemic, the management initiatives which were implemented in 2019 have continued into 2020 and have resulted in a12 per cent increase in gold production in the first nine months of 2020 compared to the same period of 2019. The resilience of Blanket’s operations during this difficult period is testament to the outstanding commitment of the entire team at Blanket Mine. Production for the first nine months of 2020 exceeded expectations and this trend continued into October.We have therefore increased our gold production guidance for 2020 from a range of 53,000 to 56,000 ounces to a range of 55,000 to 58,000 ounces.

“
Cost control in the
Quarter
continued to be excellent, but
a comparison of the costs for the Quarter
to
costs in the
third
quarter of 2019
is
complicated by factors which
somewhat increased
the costs in th
is
Quarter
. The on-mine cost per ounce
i
n the Quarter w
as
$
758
compared to $
686
in Q
3
2019. However, the costs in Q
3
20
20
include
approximately $73 per ounce of
costs relating to COVID-19, a non-cash charge in respect of share-based payments
and the cost of increased usage of the diesel generators.
After adjusting for these items, the on-mine cost per ounce of the Quarter
was $685 per ounce
–
virtually unchanged from Q3 2019 and lowe
r
than budget.

“
T
he
a
ll-in sustaining cost per ounce for the
Q
uarter
was $1,119 per ounce – an increase of
28 per cent compared to Q3 2019. This increase was
due to a higher royalty charge, which reflects the increased gold price,
increased administrative expenses, which is largely due to
higher insurance premiums
and an increased charge for share-based payments, which reflects the increased share price.

“
Notwithstanding these and other factors, we remain
on track to achieve our cost guidance for 2020 of
between $
693 and $767 per ounce for
o
n-mine costs and between $951 and $1,033 per ounce for all-in sustaining costs.

“
The
excellent
performance was also reflected in
continued
strong
cash generation:
net cash flow from
operating
activities (i.e. before
interest, taxation payments and capital expenditure) was $
7.4
million
in the
Quarter
compared to $
4.9
million in
Q
3
2019.
Net cash flow from operating activities for the Quarter was after an increase
in working capital of $1.5 million as we replenished our inventories to increase our
business
resilience
to guard against
any
resurgence of the COVID-19 pandemic which could affect Blank
e
t’s supply chain.

“During the
Q
uarter we raised $13 million (before
e
xpenses)
from the issue of equity
,
and the proceeds
will be used to construct the 12 MW s
o
lar
plant
.

“
Caledonia ended the
Quarter
with net cash and cash equiv
a
lents of
$
21.6
million
(
excluding $1 million of a gold ETF which we purchased in the Quarter to protect
cash in South Africa
against
devaluation of the
S
o
uth African Rand
)
.

“
T
he
continued strong performance
was achieved with
out
compromis
ing
o
n safety performance.
The
T
otal Injury Frequency
R
ate has bee
n
subst
antially
reduced
from
the levels in 2019 after a
concerted effort by management
over the last
18
months
to improve and enforce safety standards.
I am also very pleased to report that
in the Quarter we achieved
one
million
manhours at the Central Shaft project without incurring any serious injury
.

“
I
nterruptions to the
supply of
electricity
from the grid
have continued, but Blanket
manage
s
the
se
using
its
increase
d
su
i
te of diesel generators.
In the previous quarter we
resolved to construct a 12MW solar plant at a cost of approximately
$12 million, which is expected to provide 100
per cent
of Blanket’s
baseload
electricity demand during daylight hours and approximately
27
per cent
of Blanket’s tot
al
daily
electr
i
c
i
ty
demand.
Whilst
expected to
deliver an acceptable
financial retu
r
n
,
this investment
is primarily
intended to protect Blanket fr
om
a
further deterioration in its electric
i
ty supply
as well as to reduce
Blanket’s environmental footprint
. We have raised the funds to construct this project and have appointedVoltalia as the contractor for the project which could be operational by the end of 2021.

“T
he coron
a
virus pandemic had no appreciable effect on Blanket
’s production in
the Quarter
and a minor effect on costs.
However,
w
ork on Central Shaft
has been
slower than planned
because trav
e
l restrict
i
ons
imposed to control the spread of COVID-19
affected the movement of
speciali
s
ed
equipment and
contractors
between
South Africa
and Blanket.
The project is approximately 12 weeks be
h
ind schedule
: it is currently expected that the shaft will be equipped before the end of 2020 and will be commissioned during
the first quarter of
2021. As a result of this delay,
the
build-up in production
will also be affected
: gold production in 2021 is now expected t
o
be in the range of
61,000 to 67,000 ounces
; there is no change to the
production target of approximately
80,000 ounces of gold from 2022 onwards

⁴

.

“
I
n light of the
improved performance
and the brighter outlook for 2020
and beyond
, Caledonia
increase
d
its quarterly dividend from 6.875 cents per share to 7.5 cents per share
in January 2020
.
A
t the end of
June
, in light of Blanket’s strong perf
o
rmance
, the higher gold price
and the return to normal levels of production
including renewed access to supply chains
,
Caledonia increased its quarterly dividend further to 8.5 cents per share
. In October,
due to the continued strong operational performance, the dividend was further increased to 10 cents
per share. This
means the
cumu
l
ative increase in the quar
t
er
ly
dividend
in 2020 is
45
per cent. The
board will review Caledonia’s future dividend distributions as appropriate while considering the balance between delivering returns to shareholders and pursuing the significant growth opportunities within Zimbabwe and in line with a prudent approach to financial management.
” 

___________________
¹ Gross profit is after deducting royalties, production costs and depreciation but before administrative expenses, other income, interest and finance charges and taxation.
² EBITDA is after deducting royalties, production costs and administrative expenses, but is before depreciation, net other income, profit on sale of a subsidiary, net foreign exchange gains, cash-settled share-based payments, hedging expenses, finance charges and taxation.
³ Non-IFRS measures such as “on-mine cost per ounce”, “all-in sustaining cost” and “adjusted EPS” are used throughout this announcement. Refer to section 10 of the MD&A for a discussion of non-IFRS measures.
⁴Mr Dana Roets (B Eng (Min.), MBA, Pr.Eng., FSAIMM, AMMSA), Chief Operating Officer, is the Company’s qualified person as defined by Canada’s National Instrument 43-101 and has approved any scientific or technical information contained in this news release.

For further information please contact:

Caledonia Mining Corporation Plc Mark Learmonth Camilla Horsfall	Tel: +44 1534 679 800 Tel: +44 7817841 793
WH Ireland (Nomad & Broker) Adrian Hadden/James Sinclair-Ford	Tel: +44 20 7220 1751
Blytheweigh Tim Blythe/Megan Ray	Tel: +44 207 138 3204
3PPB Patrick Chidley Paul Durham	Tel: +1 917 991 7701 Tel: +1 203 940 2538

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.

Cautionary Note Concerning Forward-Looking Information

Information and statements contained in this news release that are not historical facts are “forward-looking information” within the meaning of applicable securities legislation that involve risks and uncertainties relating, but not limited to Caledonia’s current expectations, intentions, plans, and beliefs. Forward-looking information can often be identified by forward-looking words such as “anticipate”, “
envisage
”, “believe”, “expect”, “goal”, “plan”, “target”, “intend”, “estimate”, “could”, “should”, “may” and “will” or the negative of these terms or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Examples of forward-looking information in this news release
include:
production guidance, estimates of future/targeted production rates, and our plans and timing regarding further exploration and drilling and development. This forward-looking information is based, in part, on assumptions and factors that may change or prove to be incorrect, thus causing actual results, performance or achievements to be materially different from those expressed or implied by forward-looking information. Such factors and assumptions include, but are not limited to: failure to establish estimated resources and reserves, the grade and recovery of ore which is mined varying from estimates, success of future exploration and drilling programs, reliability of drilling, sampling and assay data, assumptions regarding the representativeness of mineralization being inaccurate, success of planned metallurgical test-work, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors.

Securityholders, potential securityholders and other prospective investors should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. Such factors include, but are not limited to: risks relating to estimates of mineral reserves and mineral resources proving to be inaccurate, fluctuations in gold price, risks and hazards associated with the business of mineral exploration, development and mining, risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom the Company
does business; inadequate insurance, or inability to obtain insurance, to cover these risks and hazards, employee relations; relationships with and claims by local communities and indigenous populations; political risk;
risks related to natural disasters, terrorism, civil unrest, public health concerns (including health epidemics or outbreaks of communicable diseases such as the coronavirus
(COVID-19)
)
;
availability and increasing costs associated with mining inputs and
labour
; the speculative nature of mineral exploration and development, including the risks of obtaining or maintaining necessary licenses and permits, diminishing quantities or grades of mineral reserves as mining occurs; global financial condition, the actual results of current exploration activities, changes to conclusions of economic evaluations, and changes in project parameters to deal with unanticipated economic or other factors, risks of increased capital and operating costs, environmental, safety or regulatory risks, expropriation, the Company’s title to properties including ownership thereof, increased competition in the mining industry for properties, equipment, qualified personnel and their costs, risks relating to the uncertainty of timing of events including targeted production rate increase and currency fluctuations. Shareholders are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent
risks
and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Caledonia undertakes no obligation to update publicly or otherwise revise any forward-looking information whether
as a result of
new information, future events or other such factors which affect this information, except as required by law.

This news release is not an offer of the common shares of Caledonia for sale in the United States. This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the common shares of Caledonia, in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such province, state or jurisdiction.

Condensed consolidated statements of profit and loss and other comprehensive income ( in thousands of United States dollars, unless indicated otherwise)
	Three months ended							Nine months ended
Unaudited	September 30,							September 30,
	2020			2019				2020			2019
Revenue	25,359			19,953				71,874			52,393
Less: Royalty	(1,271	)		(999	)			(3,599	)		(2,682	)
Production costs	(10,399	)		(9,410	)			(32,537	)		(26,750	)
Depreciation	(1,143	)		(1,059	)			(3,457	)		(3,159	)
Gross profit	12,546			8,485				32,281			19,802
Other income	27			5				4,736			2,043
Other expenses	(305	)		(173	)			(1,827	)		(482	)
Administrative expenses	(2,539	)		(1,246	)			(5,361	)		(3,951	)
Cash-settled share-based payment	(231	)		(36	)			(1,177	)		(406	)
Net foreign exchange gain	985			3,345				4,694			28,270
Profit on sale of subsidiary	–			–				–			5,409
Fair value gain/ (loss) on derivative assets	27			–				(121	)		(324	)
Operating profit	10,510			10,380				33,225			50,361
Finance income	4			30				36			80
Finance cost	(91	)		(46	)			(390	)		(116	)
Profit before tax	10,423			10,364				32,871			50,325
Tax expense	(4,993	)		(1,858	)			(11,410	)		(3,154	)
Profit for the period	5,430			8,506				21,461			47,171
Other comprehensive income
Items that are or may be reclassified to profit or loss
Exchange differences on translation of foreign operations	(88	)		(353	)			(1,146	)		(353	)
Reclassification of accumulated exchange differences on the sale of subsidiary	–			–				–			(2,109	)
Total comprehensive income for the period	5,342			8,153				20,315			44,709
Profit attributable to:
Owners of the Company	4,433			7,007				17,807			39,628
Non-controlling interests	997			1,499				3,654			7,543
Profit for the period	5,430			8,506				21,461			47,171
Total comprehensive income attributable to:
Owners of the Company	4,345			6,654				16,661			37,166
Non-controlling interests	997			1,499				3,654			7,543
Total comprehensive income for the period	5,342			8,153				20,315			44,709
Earnings per share
Basic earnings per share ($)	0.37			0.63				1.50			3.60
Diluted earnings per share ($)	0.37			0.63				1.50			3.60

Condensed consolidated statements of financial position (in thousands of United States dollars, unless indicated otherwise)
Unaudited		September 30,		December 31,
As at		2020		2019
Assets
Property, plant and equipment		123,923		113,651
Deferred tax asset		105		63
Total non-current assets		124,028		113,714
Inventories		14,280		11,092
Prepayments		4,254		2,350
Trade and other receivables		6,839		6,912
Derivative financial assets		1,160		102
Cash and cash equivalents		21,562		9,383
Total current assets		48,095		29,839
Total assets		172,123		143,553
Equity and liabilities
Share capital		74,696		56,065
Reserves		137,337		140,730
Retained loss		(73,240	)	(88,380	)
Equity attributable to shareholders		138,793		108,415
Non-controlling interests		15,913		16,302
Total equity		154,706		124,717
Provisions		3,404		3,346
Deferred tax liabilities		1,724		3,129
Term loan facility – long term portion		193		1,942
Cash-settled share-based payment – long term portion		1,692		540
Total non-current liabilities		7,013		8,957
Term loan facility – short term portion		322		529
Cash-settled share-based payment – short term portion		285		–
Income taxes payable		1,902		163
Trade and other payables		7,895		8,697
Overdraft		–		490
Total current liabilities		10,404		9,879
Total liabilities		17,417		18,836
Total equity and liabilities		172,123		143,553

Condensed consolidated statements of cash flows (in thousands of United States dollars, unless indicated otherwise)
Unaudited	Three months ended					Nine months ended
	September 30,					September 30,
	2020		2019			2020		2019
Cash generated from operations	7,393		4,886			23,764		14,003
Net interest paid	(74	)	(33	)		(337	)	(129	)
Tax paid	(2,048	)	–			(4,082	)	(608	)
Net cash from operating activities	5,271		4,853			19,345		13,266
Cash flows used in investing activities
Acquisition of property, plant and equipment	(8,007	)	(5,583	)		(15,928	)	(14,909	)
Purchase of derivative financial asset	–		–			(1,058	)	–
Proceeds from disposal of subsidiary	–		–			900		1,000
Net cash used in investing activities	(8,007	)	(5,583	)		(16,086	)	(13,909	)
Cash flows from financing activities
Dividends paid	(1,129	)	(883	)		(3,110	)	(2,503	)
Payment of lease liabilities	(30	)	–			(87	)	–
Shares issued – equity raise	12,538		–			12,538		–
Share options exercised	–		–			30		–
Net cash used in financing activities	11,379		(883	)		9,371		(2,503	)
Net increase/ (decrease) in cash and cash equivalents	8,643		(1,613	)		12,630		(3,146	)
Effect of exchange rate fluctuations on cash held	1,280		1,063			39		(15	)
Net cash and cash equivalents at the beginning of the period	11,639		9,742			8,893		11,187
Net cash and cash equivalents at the end of the period	21,562		9,192			21,562		8,026