CMCL

Business Context and Reporting Period

Caledonia Mining Corp Plc (CMCL) is a gold mining company incorporated in Jersey, Channel Islands, with primary operations in Zimbabwe. The company operates the producing Blanket Mine (64% interest) and is advancing the development of the Bilboes Project (100% interest), alongside exploration at Motapa and Maligreen. This Form 20-F covers the fiscal year ended December 31, 2025.

Key Financial Metrics (Fiscal Year 2025)

Material Changes vs. Prior Period

• Revenue Growth: Revenue increased 46% year-over-year, driven primarily by a 44% increase in the average realized gold price ($3,383/oz vs. $2,347/oz), despite a slight 0.6% decrease in total gold production.
• Profitability Surge: Profit for the year more than doubled to $67.5 million, aided by higher gold prices and a one-time pre-tax profit of $8.5 million from the sale of the company's solar plant.
• Cost Inflation: On-mine costs rose 17.7% and AISC rose 29.6% due to increased labor costs, consumables, electricity fees, and higher sustaining capital expenditure.
• Liquidity Improvement: Net cash position improved significantly from a deficit of $8.7 million in 2024 to a surplus of $23.8 million in 2025, bolstered by operating cash flows and the solar plant sale proceeds.
• Foreign Exchange: Net foreign exchange losses decreased to $3.3 million in 2025 from $9.7 million in 2024, following the introduction of the Zimbabwe Gold (ZiG) currency and improved hedging strategies.

Guidance, Outlook, and Risks

Guidance and Outlook

• 2026 Production: Blanket Mine production guidance is set between 72,000 and 76,500 ounces.
• 2026 Costs: Consolidated on-mine cost guidance is $1,500–$1,700/oz; AISC guidance is $2,100–$2,300/oz (excluding CSR costs).
• Bilboes Project: The company completed a feasibility study in late 2025, targeting first production in late 2028. A $150 million convertible senior notes offering was closed in January 2026 to fund development.
• Capital Expenditure: Total 2026 capital expenditure is forecast at $178.9 million, with $132.1 million allocated to Bilboes development.

Risks and Contingencies

• Operational Hazards: A fatality occurred in September 2025 due to a secondary blasting accident. The company has since moved to exclusive use of electronically detonated charges.
• Infrastructure: Operations face risks from electricity shortages (load-shedding) and water supply constraints in Zimbabwe, though a new 34km power line is planned to mitigate grid reliance.
• Regulatory & Currency: The company is subject to Zimbabwean monetary policy changes, including the 30% surrender requirement of export proceeds for local currency (ZiG) and fluctuating exchange rates.
• Debt Servicing: The new $150 million convertible notes (5.875% coupon) increase future debt service obligations, though capped call transactions were used to mitigate dilution.

Investor Verification Checklist

• Gold Price Hedging: Verify the effectiveness of the new put options (108,000 oz hedged at $3,500/oz) in protecting cash flows during the peak Bilboes capital investment period.
• Bilboes Funding: Confirm the status of the interim funding facility and project finance discussions, as the $150 million notes alone may not cover the full $353 million multi-year capital requirement.
• Cost Control: Monitor whether the 2026 cost guidance ($1,500–$1,700 on-mine) can be achieved given the 2025 inflationary pressures on labor and electricity.
• Rehabilitation Provisions: Review the $9.7 million site restoration provision, which is a critical audit matter involving significant estimation uncertainty regarding future closure costs.
• Dividend Sustainability: Assess the impact of the new debt service and increased capital spend on the company's ability to maintain its quarterly dividend policy (14 cents/share).