Caledonia Mining Q2FY26 Results: Net profit rises 27% YoY to $30 million
- Net profit rose 27% YoY to $30 million, supported by an 18% QoQ production increase.
- Revenue reached $76 million and EBITDA grew 16% to nearly $46 million.
- On-mine costs included a $3.2 million IFRS reclassification charge for employee trusts.
- Cash position stands at $171 million, providing liquidity for strategic initiatives.
- Full-year AISC guidance raised by $400/oz to $2,500-$2,700 range.
*this image is generated using AI for illustrative purposes only.
Caledonia Mining Corporation Plc (AMEX: CMCL) reported a 27% year-on-year rise in second-quarter net profit to $30 million, driven by improved access to higher-grade mining areas. Production increased 18% quarter-on-quarter, supporting revenue growth of 16% to $76 million.
The Zimbabwe-based gold miner navigated operational challenges from the prior period, recovering head grades from 2.5 grams per tonne in Q1 to 2.88 grams per tonne in Q2. This recovery, combined with a robust average realized gold price of $4,259 per ounce, bolstered top-line performance despite lower ounces sold compared to the six-month comparative period.
Financial Performance
Revenue for the quarter reached $76 million, while EBITDA grew 16% to nearly $46 million. Profit after tax for the three months ended June 2026 stood at $30 million, up from the comparable period in 2025. For the first half of FY26, profit after tax was just shy of $50 million, representing a 40% increase.
Earnings per share rose 29% to $1.36. The company declared a quarterly dividend of 14 cents per share. Operating cash flow remained strong at $28.4 million for the quarter.
| Metric | Q2FY26 | Change |
|---|---|---|
| Revenue | $76 million | +16% QoQ |
| EBITDA | ~$46 million | +16% QoQ |
| Net Profit | $30 million | +27% YoY |
| EPS | $1.36 | +29% YoY |
Cost Dynamics and Guidance
On-mine costs were largely in line with budget in absolute terms, though unit metrics rose due to lower production volumes in the comparative periods and specific one-off items. A significant factor was a $3.2 million charge related to Blanket Employee Trust distributions, reclassified as employee costs under IFRS after facilitation loans were paid off. Electricity costs also increased 25% due to higher wheeling charges, despite decreased consumption.
Management updated full-year guidance, raising on-mine cash costs per ounce sold by $100 to a range of $1,600–$1,800. All-in sustaining costs (AISC) guidance increased by $400 to $2,500–$2,700 per ounce, reflecting higher royalties linked to revenue and administrative expenses related to financing initiatives.
Liquidity and Capital Allocation
Caledonia maintained a strong liquidity position with $171 million in cash and cash equivalents at the end of the quarter. Total liquidity, including bullion on hand valued at $13.5 million, exceeded $200 million. The company successfully rolled over various loan notes and raised proceeds from convertible loan notes, keeping its debt structure stable.
Capital expenditure guidance for 2026 was revised downward from $162 million to $103 million, primarily due to timing shifts in the Bilboes project spend. Sustaining capex increased to $48 million to include new initiatives such as a $8.1 million portion of a 133 kV power line project and plant upgrades. Bilboes development spend for 2026 is now set at $48 million, with the remainder deferred to early next year.
What the Numbers Show
The divergence between rising absolute revenues and increasing unit costs highlights the impact of grade variability on Caledonia’s cost structure. While revenue grew 16% due to high gold prices ($4,259/oz), the reclassification of $3.2 million in employee trust distributions as production costs significantly inflated reported on-mine costs. This accounting shift, rather than operational inefficiency, drove much of the unit cost increase, suggesting underlying operational costs remain well-managed despite external pressures like electricity wheeling charges.
Operational Updates
Safety performance remained excellent, with over 400 consecutive days without lost-time injuries across nearly five and a half million man-hours. Exploration progress continues at Motapa, where a maiden resource estimate is expected within four weeks. At Blanket, drilling at the K Pits area revealed oxide grades of 1.5–2.5 grams per tonne and sulfide grades of 6 grams per tonne within 40 meters of the surface, indicating potential for additional heap leach feed without burdening the main processing plant.
How will the reclassification of the $3.2 million Blanket Employee Trust distribution impact Caledonia's long-term cost structure and future AISC guidance?
What is the projected timeline for the Bilboes project to reach commercial production given the deferral of $48 million in development spend to early next year?
Could the 25% increase in electricity wheeling charges signal a broader trend of rising energy costs for Zimbabwean miners, and how might this affect future margins?
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