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Caledonia Mining Faces Challenges


Shares of Caledonia Mining, listed on the New York Stock Exchange, took a hit as the gold miner disclosed increased costs impacting its near-term earnings at the Blanket Mine in Zimbabwe.

Share Performance

The stock saw a significant dip of over 14% in premarket trading, reaching $8.80. This decline added to a downward trend, with shares already down nearly 25% compared to the previous year.

Operational Review

Caledonia Mining highlighted the strong performance of the Blanket Mine in the past year, noting that revenue is expected to meet analysts’ forecasts. However, elevated operating costs for the year, alongside several one-time expenses in the last quarter, led to a decrease in profits.

Cost Challenges

Factors contributing to the higher costs included unexpected overtime payments for mine workers, increased power expenses, and heightened staff-termination expenditures. Moreover, higher financing costs and a one-time impairment charge linked to a tax refund claim for the Blanket Mine solar project impacted the company’s financial results.

Future Outlook

While many of these cost pressures are anticipated to be resolved by 2024, Caledonia Mining disclosed plans to implement strategies aimed at reducing electricity expenses going forward. The company is set to announce the full quarterly results by March 28.

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