IH SECURITIES (IH) predicts Caledonia Mining Corporation’s (Caledonia) revenue will reach US$176 million by the end of the fiscal year, driven by favourable gold prices.
This forecast comes as gold prices are expected to hit US$2 500 per ounce in the fourth quarter of 2024. This is premium content. Subscribe to read article.
IH notes, “Rising gold prices did not only help to improve short-term profit margins for gold companies but also led to a reduction in debt which is beneficial over the long term.”
“At an average gold price of US$2 357, we anticipate that Caledonia will register revenue of US$176mn in FY24,” IH stated in their analysis of Caledonia’s second-quarter results.
“Margins are expected to continue to improve in the year relative to FY23, with the group maintaining profitability to year-end.”
Caledonia’s topline grew 35 percent to US$50,1 million in the second quarter, largely driven by firmer gold prices. International gold prices increased by around 23 percent year-on-year in July, reaching US$2 386 per ounce.
The VFEX-listed miner also benefited from increased gold production at Blanket Mine, which recorded 20 773 ounces of gold during the quarter.
This puts Caledonia on track to achieve production within its guidance range of 74 000 to 78 000 ounces for 2024.
The group improved its efficiencies by cutting production costs, resulting in a gross profit of US$22,9 million, a 109,8 percent increase from the second quarter. Operating income also improved to US$22,5 million in the quarter.
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