Caledonia Mining Corporation (CMCL)

[NYBob]

Caledonia Mining 2011 Second Quarter and Half Year Results and Management Conference Call

http://tmx.quotemedia.com/article.php?newsid=43803742&qm_symbol=CAL



TORONTO, ONTARIO--(Marketwire - Aug. 12, 2011) -

Caledonia Mining Corporation
("Caledonia") (TSX:CAL)(OTCBB:CALVF)(AIM:CMCL) is pleased to
announce its second quarter and half year 2011 operating
and financial results.

The financial results below are reported in Canadian dollars, except where otherwise stated.

Second Quarter 2011 Highlights:

• Gold produced at the Blanket Mine in Zimbabwe in the quarter
was 8,226 ounces, 141% higher than the 3,408 ounces of gold
produced in 2nd quarter of 2010.


• Gold production increased by 12% from the 7,322 ounces produced
in the preceding quarter.


• The average price per ounce of gold sold in the 2nd quarter
of 2011 was US$1,512 compared to US$1,192 in the 2nd quarter
of 2010.


• Gross Profit (i.e. before depreciation, amortization and
administrative expenses) was $6,226,000, over 300% higher
than the $1,534,000 achieved in the 2nd quarter of 2010.


• Caledonia recorded net profit before tax of $3,836,000,
over 800% higher than the $413,000 achieved in
the 2nd quarter of 2010.


• Average gold recovery increased to 92.9% from 92.2% in
the first quarter 2011, reflecting the recent investment in
the milling and Carbon-in-Leach ("CIL") circuits.


• Cash operating costs at the Blanket Mine in the quarter
were US$585 per ounce of gold produced, compared to US$648 per
ounce in the 1st quarter of 2011 and US$816 per ounce in
the 2nd quarter of 2010.


• Blanket made payments in the quarter totalling US$3,307,000
(Q1 2011, US$1,442,000) in respect of direct and indirect
taxes, royalties, licence fees and other payments to
the Government of Zimbabwe.


• At June 30, 2011 the Corporation had gross cash and cash
equivalents of $5,033,000 (March 31, 2011 $2,217,000).


• The drilling program at the Nama base metals project in Zambia
commenced in March 2011 to identify typical copper-belt type
mineralization. This program continues and the results are
expected in the 4th quarter of 2011.

Commenting on the results, Stefan Hayden, President and CEO, said:
"Caledonia has had a very strong performance for the second
quarter and first half of 2011.
The further increase in production coupled with the strength
in the gold price and a continued reduction in Blanket's
operating costs has resulted in a substantial improvement
in Caledonia's profitability and cash generation.

We have made significant progress in addressing the remaining
production constraints which, once solved, should enable us
to reach our target of 10,000 ounces per quarter.
The new raise bored ore pass became fully operational at the
end of July and has substantially improved the efficiency of
the underground operations and reduced ore handling costs.

The 10 MVA standby electrical generating system was commissioned
at the end of May and Blanket can now maintain full operations
during any interruption to the normal power supply.
Electricity supply was reasonably stable during the quarter but,
as anticipated, Blanket experienced several interruptions
and the standby generators operated as designed for
approximately 51 hours during the second quarter.

The installation of a second new gyratory crusher,
a new triple-deck screen and
the commissioning of the standby generators required a
five day planned interruption in production during the
second quarter.
The new crushers and screen are operating well and have
contributed to the improved recovery and reduced costs.

Production for the quarter was also impacted by the raise
boring of a ventilation raise, a shortage of spare parts for
key items of equipment, and the need to remediate some
sections of the underground haulages to allow for increased
shunting speeds.
The historic lack of investment over the past years due to
the shortage of funding, which is common to virtually all mines
in Zimbabwe, contributed to an increased incidence of equipment
breakdowns at the higher production levels which are now being
achieved.
This will be an area of focus for Management for the second half
of the year.
It is now anticipated that Blanket will achieve its target
production level of 40,000 ounces per annum by the start of
the fourth quarter of 2011.

Caledonia submitted an indigenization proposal on May 9, 2011
and awaits a formal response from the Minister.
Caledonia continues to work closely with, amongst others,
the Chamber of Mines Zimbabwe (the "Chamber") regarding
the continued engagement between the Chamber and the Minister
in respect of the indigenisation of the mining sector.

During the second quarter Blanket made payments of approximately
US$3.3 million to the Government of Zimbabwe in respect
of direct and indirect taxation, royalties, licence fees etc.
I hope that payments of this magnitude will address the
widespread misconception in Zimbabwe that mining companies
do not pay tax.

The initial drilling program on the Konkola West area of the Nama
base metals project in Zambia commenced during March 2011
to identify whether typical copper-belt type mineralisation,
which is the primary type of mineralisation found in Zambian
copper and cobalt deposits, exists similar to that on the
adjacent property to the east of the Nama Licence Area.
At the end of the second quarter, 2 holes had been drilled
and the drill rig was being moved to the 3rd hole.
This drilling program is expected to be completed by early
in the fourth quarter 2011 and the final assay results received
thereafter.
The conclusions arising from this program will be made
available once management has received and evaluated all of
the results.
This is anticipated to be during the fourth quarter of 2011."

Caledonia Management will host a conference call starting
at 1000 (EDT) on August 15, 2011.
Please dial-in 10 minutes beforehand and quote
the conference ID number: 837504#.




Toll-Free Number*

Toll Number



Canada

+ 1 866 561 8617

[phone]



USA

+ 1 866 928 6049

[phone]



UK

[phone]

[phone]



International


[phone]




*

If you are calling from a mobile phone your provider may charge you when connected to the toll-free numbers.








Financial Highlights








Condensed Consolidated Statement of Comprehensive Income (unaudited)




(In thousands of Canadian dollars except per share amounts)





For the 3 months ended June 30


For the 6 months ended June 30





2011


2010


2011


2010





$


$


$


$




Revenue

11,990


4,154


23,216


8,614




Royalty

(593

)

(147

)

(1,048

)

(292

)



Production costs

(5,171

)

(2,473

)

(10,121

)

(5,755

)



Amortization

(633

)

(575

)

(1,206

)

(1,160

)



Gross profit

5,593


959


10,841


1,407




Administrative expenses

(1,733

)

(469

)

(2,679

)

(895

)



Share-based payment

-


-


(1,102

)

-




Results from operating activities

3,860


490


7,060


512




Finance income

-


63


-


162




Finance expense

(24

)

(140

)

(179

)

(154

)



Profit before income tax

3,836


413


6,881


520




Income tax expense

(962

)

(2

)

(2,112

)

(2

)



Profit for the period

2,874


411


4,769


518




Profit/(loss) on foreign currency translation

(361

)

575


(1,075

)

(101

)



Total comprehensive income for the period

2,513


986


3,694


417




Earnings per share (cents)











Basic

0.58


0.08


0.96


0.10




Diluted

0.54


0.08


0.88


0.10




Weighted average number of common shares outstanding (thousand)











Basic

500,313


500,169


500,241


500,169




Diluted

542,853


500,169


542,781


500,169
















Condensed consolidated statements of financial position (unaudited)



(In thousands of Canadian dollars)



As at

June 30,

December 31,




2011

2010




$

$



Total non-current assets

31,382

28,348



Inventories

2,826

2,620



Prepayments

89

93



Trade and other receivables

4,028

2,314



Cash and cash equivalents

5,033

1,145



Total assets

43,358

34,520



Total non-current liabilities

7,995

7,070



Trade and other payables

5,287

3,882



Bank overdraft

2,421

747



Total liabilities

15,703

11,699



Capital and reserves

27,655

22,821



Total equity and liabilities

43,358

34,520









Condensed Consolidated Statement of Cash Flows (unaudited)




(In thousands of Canadian dollars)





For the 6 months ended June 30





2011


2010





$


$




Cash flows from operating activities







Profit for the period

4,769


518




Adjustments for:







Reconcile net cash from operations

4,580


957




Changes in non-cash working capital

(512

)

139




Income tax paid

(1,312

)

(2

)



Net cash from operating activities

7,525


1,612











Cash flows from investing activities







Property, plant and equipment additions

(5,171

)

(3,438

)



Sale of investment

-


51




Net cash used in investing activities

(5,171

)

(3,387

)










Cash flows from financing activities







Bank overdraft increase

1,675


1,766




Finance expense

(179

)

(154

)



Finance income

-


162




Shares issued

38


-




Net cash from (used in) financing activities

1,534


1,774











Net increase in cash and cash equivalents

3,888


(1

)



Cash and cash equivalents at beginning of period

1,145


1,623




Cash and cash equivalents at end of period

5,033


1,622



Further information regarding Caledonia's exploration activities and operations along with its latest financials and Management Discussion and Analysis may be found at www.caledoniamining.com



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