Caledonia Mining targets production recovery at Blanket as Bilboes project advances - ICYMI Proactive Fri, November 13, 2026 at 8:30 AM EST 8 min read GC=F -0.02% CMCL 0.00% Trade CMCL on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL, VFEX:CMCL) CEO Mark Learmonth discussed the company's third-quarter 2026 performance, the recovery in gold production at Blanket Mine in Zimbabwe and progress on the Bilboes Gold Project in an interview with Proactive.
Gold production fell below expectations to approximately 17,000 ounces during the quarter because of operational delays, but higher prices enabled Caledonia to realise more than US$4,100 an ounce.
Despite production challenges, quarterly EBITDA exceeded US$28 million, taking the nine-month total to approximately US$108 million, with Learmonth saying the business continued to generate substantial cash.
Production was affected by delays in installing compressors for deeper mining operations and modifications to the processing plant's gravity recovery circuit, leaving approximately 1,100 ounces of gold trapped in the processing system at quarter-end.
The compressors were installed by the end of October and a new elution vessel was commissioned, helping October production rebound to just under 7,000 ounces as previously held gold was recovered.
Learmonth also outlined progress on Bilboes, supported by a US$150 million, three-year financing facility arranged with Zimbabwean banks to fund long-lead equipment purchases, including ball mills, while longer-term financing options are assessed.
Meanwhile, Caledonia reported a 22% increase in measured and indicated mineral resources at Blanket, identified a new mineralised body and declared a quarterly dividend of US$0.14 a share.
Looking ahead, the company expects improved Blanket production in 2027, supported by operational changes and increased mining activity, while evaluating oxide mining opportunities.
A test heap-leach pad is being prepared for irrigation, potentially paving the way for larger-scale commercial operations next year if the results prove successful.
Here's the full interview for further details on the Q3 results, production recovery, Bilboes financing and Caledonia's growth prospects.
Proactive: Mark, how would you summarise Caledonia's third-quarter performance?
Mark Learmonth: It's fair to say it was a challenging quarter for several reasons, most of which we've already explained to the market.
There are about half a dozen things I'd draw to your attention.
The first is that clearly the gold price was helpful. We realised over $4,100 an ounce, which was very helpful.
Production was 17,000 ounces, and that was a bit less than we'd expected for various reasons, which no doubt we'll go into.
But notwithstanding that, core profitability — EBITDA, earnings before interest, tax, depreciation and amortisation — for the quarter still remained very strong.
It was just over $28 million for the quarter, and for the nine months to the end of September, it was about $108 million.
So the business continues to produce really quite substantial amounts of cash.
In terms of how that translates into financial accounting, as no doubt we'll discuss, there were lots of high-finance accounting adjustments relating to derivatives and what-have-yous.
Those are a little bit of a sideshow in my mind because, frankly, it detracts from the underlying cash generation of the business.
We also announced, subsequent to the end of the quarter, that we'd finalised a $150 million facility with Zimbabwean banks, which we'll be using to progress the Bilboes project.
We increased Blanket's measured and indicated resources by 22%, and we also announced a maiden resource. Within those Blanket resources, we identified a new body.
And we declared yet another quarterly dividend of $0.14 a share.
So I think those are the main issues arising from these quarterly results.
Proactive: Mark, what caused third-quarter production at Blanket to fall below expectations?
Mark Learmonth: We've already explained that it was two issues.
As the mine has moved deeper, as scheduled, we need more compressed air to service those deeper areas.
We had ordered four additional compressors. Two were installed, but two were stuck at the port in Beira.
That meant we weren't able to get the contribution we wanted from the higher-grade, lower-level areas.
Those compressors were installed at the end of October, and that issue has been rectified.
We made some modifications to the gravity circuit to improve recovery and increase security.
That meant more free gold was reporting into the CIL circuit. Because our CIL circuit is somewhat inefficient, we weren't able to recover it.
At the end of the quarter, we had about 1,100 ounces of gold trapped in the CIL circuit.
Again, that's largely been addressed in October, but both issues had an adverse effect on production in the quarter.
Proactive: Does October production provide confidence that performance has normalised?
In October, we produced just short of 7,000 ounces.
Part of that was a strong rebound in core operations.
Even before we got the compressors in, we'd rejigged the mine to make sure we were directing the compressed air we had to the high-grade areas, ensuring those areas were producing to plan.
We weren't starving those areas of compressed air.
That was one aspect of the improvement in October.
The other was that we commissioned a new elution vessel in the middle of the month, which allowed us to start recovering some of the gold trapped in inventory.
The rest will come out over the next couple of weeks.
Proactive: Mark, why did profit after tax fall despite higher revenue and gross profit?
Mark Learmonth: I alluded to that before.
The underlying profitability of the business was strong. Gross profit was good, and EBITDA was good.
But below that, there were an awful lot of high-finance adjustments relating to derivatives.
There's a derivative embedded in the convertible bond issue that we issued in January.
The point of that derivative is to increase the conversion premium that we could offer to the people who took that bond.
Typically, you'd have a conversion premium of about 25% to the prevailing share price on the date of issue.
But because of this derivative, we're able to offer a conversion price that is much higher. I think it's 58%.
That means if those bonds convert, there's substantially less dilution for shareholders.
But to give us the ability to offer that higher conversion rate, there's an embedded derivative, which is a non-cash item.
It means our profits are going to be subject to more volatility as a result of the factors that drive that derivative.
In the third quarter, I think we took a $12 million hit.
In the previous quarter, there was a rather large gain.
Even though it's non-cash, in terms of profit for the nine months, I think we're about $2.5 million ahead.
But I would encourage people to differentiate between cash items — because cash is cash — and the financial effects of derivatives.
Going forward, our earnings will be subject to variations driven by accounting for derivatives.
Proactive: Mark, you mentioned the agreement with Zimbabwean banks allowing Caledonia to borrow up to $150 million for Bilboes. What does this facility enable the company to do now?
It gives us the ability to progress with the procurement process, which has already started.
It's important to us that we get this project up and running as quickly as possible.
That delivers value for the company and for shareholders.
Delays to the project arising from delays in procurement would push the project back.
So it's very important that we continue with the procurement of some of these items.
Some have very long lead times, particularly the ball mills.
Having that interim facility gives us the ability to progress that procurement.
It's got a three-year life, but it's intended to form a bridge between our current cash position and the funding that we expect to come in through project financing.
It gives us the time and flexibility to be more considered and evaluate the options we have in terms of securing project financing.
So it gives us breathing space, and it means we can continue to implement the project.
Proactive: Mark, what are the most important operational and growth milestones investors should watch now?
Mark Learmonth: I think people should be looking to see a continued bounce-back at Blanket over the remainder of 2026.
That won't become apparent until early 2027, when we publish our production numbers for Blanket.
At that time, we typically also give guidance for 2027.
As I've said in the past, there are things in the business that we've done over the course of the year which give us good reason to expect that the production outlook for Blanket, particularly in 2027, will be stronger than we'd previously alluded to.
Things like converting the increased run-of-mine production arising from the new shift system that we introduced in June will deliver more ounces.
Also, the progress we're making on the pits and the oxide mining is going very well.
We've identified an open-pit oxide resource at Blanket.
We're currently loading the test heap-leach pad. We'll start irrigating that next week.
We've got the EIA approval, so if that test heap-leach pad works, we can start large-scale commercial oxide mining operations pretty much as early as we can next year.
People should monitor the news releases we put out to show further progress on those fronts.
(This interview has been edited for clarity and brevity.)
