• Record Production and Revenue: Caledonia achieved production of 21,070 0z, leading to a 30% increase in revenue to $65.0 million
• Operational Excellence: Blanket Mine's plant recovery rate improved to 94.4%, contributing to a strong half-year production total of 39,741 ounces
• Strategic Growth Initiatives: The company is advancing its growth pipeline with ongoing exploration at Blanket and the Bilboes project

Harare- Caledonia Mining Corporation, the third largest gold producer in the country, achieved a record-breaking gold production in the second quarter of 2025, driven by exceptional output at Blanket Mine, the country’s second-largest gold mine. The company reported a Q2 gold production of 21,070 ounces at Blanket, a 1.4% increase from 20,773 ounces in Q2 2024, fuelled by higher ore grades and improved plant recoveries.

This performance contributed to a half-year production of 39,741 ounces (equivalent to 1236.29 kg), following a strong Q1 output of 18,671 ounces.

The surge in production, coupled with record-high global gold prices, propelled Caledonia’s Q2 gold revenue to $65.0 million, a 30% increase from $50.1 million in Q2 2024.

This financial success translated into a gross profit of $33.8 million (up from $22.9 million) and a net profit attributable to shareholders of $20.5 million, more than doubling the $8.3 million recorded in the prior year.

Adjusted earnings per share also soared to 113.9 cents from 44.6 cents, reflecting robust operational and financial health. Caledonia’s strong performance reflects its position as a leading gold producer in Zimbabwe, where it competes with other major players like Freda Rebecca and Padenga, though Blanket’s consistent output and modernisation efforts give it a competitive edge in operational efficiency.

Blanket Mine’s operational improvements were pivotal to Caledonia’s success in Q2 2025.

The mine achieved a record plant recovery rate of 94.4%, up from an average of 93.6% in 2024, due to the addition of a new tank in the carbon-in-leach circuit, optimised reagent dosages, and enhanced process controls. This improvement added approximately 175 ounces to the quarter’s output, and the company anticipates sustaining this recovery rate barring changes in ore feed grade or mineralogy.

Caledonia has also raised its 2025 production guidance for Blanket to 75,500–79,500 ounces, reflecting confidence in sustained operational performance. The company invested $17.7 million in the first half of 2025 ($10.5 million in Q2) in property, plant, and equipment to modernize Blanket’s infrastructure, ensuring long-term efficiency.

Ongoing exploration at Blanket, with 6,976 metres of underground drilling from January 2024 to April 2025, has yielded encouraging results, particularly in the Blanket, Eroica, and Lima orebodies.

The discovery of a potential new orebody with impressive grades and widths, alongside efforts to upgrade inferred resources and extend the mine’s life below the 1,110-metre level, positions Blanket as a cornerstone of Caledonia’s growth strategy. Compared to other Zimbabwean producers, Blanket’s focus on resource expansion and modernisation sets it apart.

Caledonia’s financial position strengthened significantly in Q2 2025, with operating cash inflows of $41.3 million for the half-year ($28.1 million in Q2), driven by higher production and favourable gold prices.

The sale of its Zimbabwe subsidiary, Caledonia Mining Services (Private) Limited, which owned a 12.2MWac solar plant, to CrossBoundary Energy Holdings for $22.35 million in cash further bolstered liquidity. The solar plant will continue supplying power to Blanket under an exclusive agreement, ensuring operational continuity.

Net cash from operating activities rose to $28.1 million from $19.1 million, and the company’s net cash position improved to $26.2 million from a negative $1.4 million in Q2 2024. To optimise short-term returns, Caledonia placed $18.0 million in fixed-term deposits during the quarter.

Financing activities resulted in a net outflow of $6.0 million for the half-year ($6.9 million in Q2), including $9.0 million in dividends paid to shareholders and $3.2 million in net proceeds from loans and bond issuance for capital projects. A dividend of 14 cents per share was declared, reinforcing Caledonia’s commitment to shareholder returns.

This financial discipline and strategic capital allocation highlight Caledonia’s ability to balance growth investments with shareholder value, a strength not always evident among Zimbabwe’s gold producers, where economic volatility often constrains such flexibility.

Beyond Blanket, Caledonia is advancing its growth pipeline through the Bilboes sulphide project and Motapa exploration program. The Bilboes feasibility study, requiring a $309 million recapitalisation, is progressing, with evaluations of new opportunities to enhance project economics and explore near-term, low-capital revenue streams. In Q2, the Bilboes oxide mine produced 372 ounces of gold, a modest contribution but indicative of ongoing activity.

At Motapa, located adjacent to Bilboes, a $2.8 million exploration program for 2025 is targeting sulphide and oxide resources, with 1,788 meters of diamond drilling and 9,638 meters of reverse circulation drilling completed by June 2025. The proximity of Motapa to Bilboes offers potential synergies if viable resources are identified, with results expected in the second half of 2025.

These initiatives reflect Caledonia’s long-term vision to diversify its portfolio, a strategic move that contrasts with some Zimbabwean peers who remain heavily reliant on single-asset operations. However, the capital-intensive nature of Bilboes shows the challenges of developing large-scale projects in Zimbabwe’s economic environment, where access to funding and infrastructure remains a hurdle.

Caledonia’s record-breaking performance in Q2 2025, driven by Blanket Mine’s operational excellence and strategic financial management, solidifies its status as one of Zimbabwe’s leading gold producers.

The company’s ability to achieve record production, improve recovery rates, and generate strong cash flows while investing in growth projects like Bilboes and Motapa demonstrates a balanced approach to operational and strategic priorities.

However, the broader Zimbabwean gold sector faces risks from currency volatility, power supply issues, and regulatory uncertainties, which Caledonia mitigates through its solar plant agreement and robust cash position.

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