Mar 31, 2025 / 01:00PM GMT
Presentation
Mar 31, 2025 / 01:00PM GMT
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Corporate Participants
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* Mark Learmonth
Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
* James Mufara
Caledonia Mining Corporation PLC - Chief Operating Officer
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Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
Good morning or good afternoon, depending on where you are. Welcome to this webinar to discuss Caledonia's results for the fourth quarter of 2024 and for the year. I'm here in Jersey. I'm joined also in Jersey by Ross Gerard, our CFO, who joined today. And then in Johannesburg, I've got James Mufara, our Chief Operating Officer; and Victor Gapare, an Executive Director who is based in Harari, Zimbabwe.
And in case I need them, I've got some accounting support in Johannesburg and (technical difficulty). If you just move forward, we've got the disclaimer next, which I think we just need to [pause on] so that's the presentation to which we've already dealt with. Okay. Let's move on to the summary. So a record gross profit for the year of nearly $77 million that's up 86% from 2023.
That pretty much flowed down to the bottom line with net attributable profit of just under $19 million compared to a loss of $4 million than the previous year. That's reflected in stronger operating cash flow. So that's after tax and interest and working capital before CapEx and dividends. And that was nearly $42 million compared to just less than $15 million in the previous year. Production of Blanket was within guidance, slightly towards the top end of the guidance range.
And there was also a continuing very small production and build those oxides, which I'll refer to very briefly. Last week, we -- so there's a lot more information on these results as we go through this presentation. we announced that we're going to extend the period of time need to look at the feasibility study for Bilboes. That gives us time to assess some factors, some of which have only materialized within the last month and to optimize the project economics. So we have a little bit more on that.
We have some good exploration success at Blanket and Motapa, which is encouraged us to do more work in that area. So whether that's the slide on that. And just so that we -- on Monday, we announced a further dividend of $0.14 for the quarter, making $0.56 for the year.
And it's fair to say also that we've had some fairly significant changes to the Board and to management over the course of the last year or so with James joining us as COO in May, and that's been rise to a very substantial turnaround in the operating performance at the mine, particularly at the mine as opposed to the metallurgical plant. And you've seen also that we've refreshed the strength of the Board with some recent board appointments and then we're joined today by Ross you've taken over from Chester as the CFO. So Ross is very welcome. Next slide.
Before we get into this, I just want to touch very briefly on the delay in the publication of the accounts. We put out a press release about a week ago, which notified people that we need an extra week to evaluate an accounting issue that identified at the end of the audit process. The accounting issue really relates to the calculation of deferred tax for the year to the 31, December 2019 so it's about five or six years old, and that don't flow (technical difficulty) into subsequent years.
Just to be absolutely clear that this is an error relating to the calculation of deferred tax. It also flows through into the calculation of realized foreign exchange gains and losses and then below that, it then flows through into profit after loss.
I want to make it absolutely clear that this error had nothing to do with actual tax payments or any submissions that were made to [ Zimbabwe ] tax authorities but also make it very clear that this has nothing to do with cash.
So the account published this morning for the year to December 2024 also include restatements of the prior year accounts for '22 and '23 and at the back of the audited financial statements, I think note 40, you will find full disclosure of the various line items, which have been affected by this restatement. But in summary, its deferred tax, it's IFRS profit and retained earnings.
So to be absolutely clear, that's got nothing to do cash or with actual income tax calculations. Okay. Should we just move on to on the results themselves. Starting off with safety and production. It's probably best if I hand over to James at this stage, if you just (technical difficulty) safety production, please.
James Mufara - Caledonia Mining Corporation PLC - Chief Operating Officer
Thank you very much, Mark, and good day to you all. So on the safety front and then following the loss of life (technical difficulty) on the 25 of September which is the previous quarter, which we already reported on, we embarked on a journey to see a real risk in reduction and to put controls better controls to make sure that we actually move up (technical difficulty) with regards to our safety.
We wanted to embark on a culture. A lot of you remember, I joined on the first of May. And wanted to embark and we realized that there was quite a lot of set course that we lead on, and we had employees basically that follows protocols primarily out of obligation and the idea is to want to move the dial where employees work not because I have to follow rules because I have to, but you need employees to have an identity that I need to follow rules because I want to.
So over and above the internal audit that we did with regards to the incident that we had, we decided to also put in place a number of measures, the first of which was to appoint a group ship manager -- an experienced group ship manager coming from harmony who himself put a structure in place with regards to ventilation and health and safety speech for the appropriate departments.
You also look at five other areas that we will be [ biting on ] so that we can actually have a better safety culture on the mine. The (technical difficulty) to strengthen governance and risk management, to strengthen immediate imaging preparedness, to strengthen safety practices, organizational capability and to move the -- to look at the whole safety culture and improve it.
So the safety culture (technical difficulty) flywheel has started to move -- has started to (technical difficulty) it's a question of getting the momentum in place and we can already see a massive improvement that we are daily with regards to that. In the last quarter, which is the fourth quarter of Q4, we actually had 88 out of 100 accident-free days, which is a much improvement or (technical difficulty) within the (technical difficulty) history.
In terms of production as well, we had a very good production quarter and we also had a very good and (technical difficulty) ending up on 19,841 sort of on tonnes -- ounces and compared to (technical difficulty) to just [18,192 ounces].
I will touch further on production. Now with regards to the next slide, over to you, Mark.
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
Yes. So we'll go back to production in more detail later. But it's fair to say across the board a substantial increase in performance, obviously, helped by the higher gold price. So the average realized gold price in the quarter was just over $2,600 compared to just under $900 in the comparable quarter of the year at just over $2,300. So for those of you who are the gold market, that won't come as a surprise to you.
And clearly, that supports the substantial increase in revenue, also supports the increase in gross profit. So $21 million for the quarter and $77 million for the year compared to clearly lower numbers previously. I already mentioned the increase in net profit attributable to shareholders.
One thing I will just draw to your attention, we declared a dividend again, $0.14 to reinforce the fact that previously, we used to declare dividends on a sort of metronomic quarterly basis. We've disclosed for several quarters now that that's now been changed slightly so that we declare the dividend at the same time as the Board approves the accounts.
It just sort of streamlines board processes but for most quarters, that doesn't really make much difference. But for this particular for the publication of Q4, it does mean that the dividend that we declared or we used to declare in and pay at the end of sort of March or something, that does get pushed out a bit.
So there is a little bit of a phasing issue. But for the year, the total dividend is $0.56 and that hasn't changed. Should we just go into a little bit more detail on production? James, can I ask if you could to talk to this slide?
James Mufara - Caledonia Mining Corporation PLC - Chief Operating Officer
Thank you very much, Mark. So as already previously stated, we had a very good end of year and Q4, in particular, ending up on 76,656 ounces, which is a 1.6% improvement compared to 2023. The tonnes for 2024, which is 797 tonnes 279 is a record as you can see from the graph, it's the first time that we actually hit those numbers, which is a 3.5% higher than 2023 number.
And this was primarily as a result of three areas that we saw quite a good improvement because better utilization of Central [Shaft], which is now fully operational after all the [work] that we have done over the years. It was secondly as a result of better equipment availability that we have underground and (technical difficulty) was also better.
It was also due to better labor productivity within our sections. As you'll see that the grade has remained almost the same for a number of years, almost from 2040 to where we are. But if you look at sort of year-on-year, we actually weighed down from 2.5% to 3.2% from 2024 to 2023.
Although specifically, quarter four was 3.18%, (technical difficulty) quarter three, which we have already deployed on. We had a fall of ground in one of our hybrid stops called Eroica, which actually exposed our need for better flexibility with regards to mining space, we have never seen (technical difficulty) better development.
As you can see, our [ damage ] has been going up year-on-year, meaning to say that we actually need to open up more areas so that we can have better flexibility. This year's development, which is really very well improved. And last years -- by end of year, will not only help us in the years to come with regards to flexibility.
The reserve grade for Blanket is sitting around 3.3 [grams] per tonne, and we will not mine further than the -- not much higher than the 3.2 (technical difficulty) where we expect to land in this year. The mine had an excellent production year in 2024. I mean this (technical difficulty) month (technical difficulty) summed up it was the icing on the cake, where we ended up on 89,727 tonnes, a record for the month.
I mean we have never reached such a milestone. It's actually exit our crushing and milling capacity at Blanket and we ended up with a stockpile of 8,487 tonnes, which we fitted. And no, it is good to report that actually, that stockpile is still growing as well even in this financial year. So if you look at the bottom graph, one of the dots that you see is the recovery, I mean, which has been sort of taking an up and down movement. However, for the year, we ended up 93.6% on recovery, which is still very high and which is our plan.
Last year, it was just higher at 93.8%. It was just higher than our planned, which is not really going to be sustainable. But by world-class is still quite a high recovery, which we have actually managed to keep there because of the work that we've done with regards to the oxygen plant that will be sold (technical difficulty) that we have been replenishing over the years to make sure that our free gold recovery is on point and the changes that have also been done (technical difficulty).
So we can see that production is really stabilized. This year, we started off with the used stock of 8,487, and we expect that this production should stabilize and be better going into the future.
Thanks, Mark.
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
Yes. Thank you, James. I mean the difficulty we've always had in the last year or so has been our inability to blast the ore, firm the ore and hoist it that we have sort of, as I said, breakdown, the breakdown is in that process somewhere. So what James has managed to do is he managed to get this whole operation working much more clean and much more efficiently. The last thing we're trying to (technical difficulty) hosting and growth of the stockpile is very welcome. That's something we've not have had before. Okay. So thank you very much, James.
Should we move on to the next page? What this shows is for the quarter, it breaks down the consolidated results. It shows you what's been going on at Blanket, what's been going on at Bilboes and other, which is really sort of intercompany, head of relations and head office costs.
So you can see quite the -- Blanket level, revenue very strong, the royalty stays the same. The government royalty stays the same at 5%. [ Faction ] costs at blanket broadly the same, about just $19 million although we would like to get that down a bit. Depreciation is very slightly down a bit, and that's for sort of technical reasons.
So gross profit is what, $20 million compared to $11 million in the previous quarter. Quarter-on-quarter, Bilboes has had very little impact. So there's a slide coming later, which shows how we've quarterized the losses from Bilboes. So at the moment, Bilboes -- we're continuing to re-leach the heat pads at Bilboes held by the slightly higher gold price, and we'll continue to do that for as long as that leaching process covers the direct costs. So it's basically washing its face.
And as I've said is corporate and group adjustments. Shall we move on to the next slide. What you see are two graphs, left hand side is the on-mine cost. Right-hand side is the all-in sustaining cost which just basically shows how our costs have developed to progress from quarter four 2023 to quarter four 2024. So looking at the on-mine cost, you can see we a 7%-odd benefit as a result of putting Bilboes back onto care and maintenance.
Negligible movement on power. Some increase in labor. Part of that in the quarter would be we had to rely very heavily towards the end of the quarter over time and has been a special bonus system that we introduced specifically for December because truth be told, the first half of the fourth quarter was very difficult, largely because of a sharp deterioration in the electricity supply. So had we not made those interventions, I suspect, at the end of November. I think actually quarter four would look quite stick.
But thankful we know those interventions that we pulled quarter four around very nicely. And then an increase in consumables, which is largely costs relating to equipment pumps, [ LHDs ], that sort of thing. So that takes the -- that walks the cost up from what it was in 2023 to 2024.
Then you can see on the right-hand side, you've got how the all-in sustaining cost moves, some increase due to on-mine cost from (technical difficulty) around with share-based expense and sort of accounting repower sustaining CapEx and procurement margin, okay? It is fair to say that management is very conscious that these costs are higher than we've had historically and we are exploring ways over the course of the next few years to get down the online cost, particularly focusing on labor and electricity to use our labor more intelligently and actually reduce our electricity usage.
And then at the all-in sustaining cost level, that will obviously benefit from any reduction in the online cost, but also we're looking at what we can do to reduce our sustaining CapEx. Sustaining CapEx does remain very high. 2024, sustaining CapEx of $19 million, which equates to about $240 an ounce.
2025, it will be about $30 million, which are about $400 an ounce and that really goes in -- that sustaining CapEx is going to things like development, which James has explained, is important to improve our mine flexibility. It's got to go into things like milling in the (technical difficulty) facility the work on the new tailings down continues.
And clearly, we need that because we need somewhere to deposit the waste. And we have continued to spend heavily on engineering to increase the robustness and the resilience of the equipment at Blanket. That higher level of sustaining CapEx will continue for 2025 and 2026, and then we'd expect it to begin to fall away from 2027 onwards.
Rather than this really just shows everything below gross profit. So we discussed revenue, we discuss online costs, and low gross profit, you've got net foreign exchange losses in the quarter, which were only $600,000 in the fourth quarter for the year, it was much higher.
So it was very pleasing to see that the local currency, the ZiG has stabilized in the fourth quarter, and that's continued through into the first quarter. So we're not seeing a recurrence of the very substantial FX losses that we incurred in the first nine months of the year. (technical difficulty), it primarily increased $2 million of retirement costs.
As you'll recall, in the third quarter, we initiated a retirement program which affected just over 100 people who are over the age 60 to manual work and 65 for nonmanual and that was an action that really should have been taking some time ago. So we bit the bullet, 100 people were retired.
And I'm also pleased to say that as part of that retirement program, you have seen a very significant cultural shift at Blanket which has contributed to the strong performance in the fourth quarter. Tax is a combination of income tax, our old friend deferred tax, but also a significant opponent of withholding tax that we incur as we move money around the group.
At the [ NCI ], (technical difficulty) the controlling interest is the minorities at Blanket. And that takes you down to adjusted earnings per share for the quarter, which was [44.3] compared to a few cents in the fourth quarter of 2023. (technical difficulty) this looks a bit stock, but all I was trying to do here is to show the split out gross profit of Blanket for gross profit at Bilboes.
So Blanket is on the top half, and you can see that gross profit in 2022 was $70 million down to $11 million. Then in that first half of 2023, Blanket's performance was really not very good, largely because of lower production and higher costs.
And you can see now towards the back end of 2024, we're now getting a gross profit of $22 million, nearly $20 million, and then just over $20 million. So the point of this graph is to show that Blanker as a cash generative engine is back where it should be, okay? And then on the bottom half, you can see that Bilboes has incurred losses of $3 million, $2 million, and $1 million in the first three quarters of 2023.
But in 2024, we've not quarterized that as Blanket is now (technical difficulty) care maintenance just running so long as it will cover its operating costs. I just want people to understand the cash drain that was coming out of Blanket's poor performance and the cash drain that was coming out of Bilboes has now been dealt with.
[ Can you Show me on cash flow ] (technical difficulty) slide but Frankly, I think this is probably the most relevant slide of the whole thing because really it all comes down to cash at the end of the day. So cash from operations before working capital, that's the first line. 2024, it was $65 million, which equates to about $1.25 million a week in.
In quarter four, it was $19 million. So that's about $1.5 million a week. So a very substantial improvement in the rate of cash generation in the fourth quarter compared to the previous three quarters, right? Below that, you've got the movements in working capital. But what's -- if you look at these closely, you'll see that in the year, we absorbed $10 million into working capital.
And in the quarter, it was about $3.5 million into working capital. Quite a substantial amount of money being absorbed into working capital. And really, there's two main areas. One of those is inventories and prepayments and we are -- One of the way we manage our exposure to possible devaluation of the ZiG is to make sure if instead of holding ZiG cash balances, we used the ZiGs to buy inventories or to make prepayments as a way to reduce our ZiG holdings. So that has given rise to some increase in the inventories and prepayments.
And then receivables has increased largely because of the higher gold price, which just means there's more money flowing through the system. So there has been an absorption into working capital. The other area of significance here is net cash used in investing activities, which was $32 million for the year and nearly $30 million for the quarter.
That is mainly a sustaining CapEx at Blanket. So of the $32 million spent in a year, $27 million was spent at Blanket, of that [ $27 million ] That's broken down in the -- in, I think, Paragraph 4.4 of the [ NG&A ], that's broken down as the main components being the continued work on the tailings facility and on development.
Bilboes on the top have also absorbed $3 million a year, and that was largely on the ongoing work on the feasibility study and exploration at Motapa, which actually turned out to be rather good. And then the final thing would be actually used in financing activities.
That's a combination of the Caledonia dividend, which is just under $11 million. Dividends paid to the Blanket minorities, which is about 1.6 million offset against that will be increases in debt, which includes further modest issues of bonds to institutional holders in movements and overdrafts. So some improvement in cash, but we do intend at this high gold price to focus on improving our cash position, okay?
This, again, very similar -- this slide is very similar to the one I showed you about gross profit is intended to show how the quarter-on-quarter cash generation in the last sort of three quarters or so has improved after the sort of the dip, the sort of hiatus in late 2022 and early 2023.
Let's turn to the feasibility study (technical difficulty) is progressing well with support from DRA and other technical consultants. And the feasibility study will supersede the PEA that was published in June 2024. We put out a press release last week, the effect that we want to extend the timeline that we need to complete this feasibility study and that's for several reasons. The first is just to give DRA more times to do their work.
But we also want to explore some new development options which have become apparent. One of them will be the potential, and I say the potential to export concentrate in the project. Previously, we thought that we'd have very strong indications that would not be accepted in the Zimbabwe government. So they want to very strongly to have in-country beneficiation. But now we understand that given the complexity of processing complex gold metallurgists such as Bilboes is it become maybe more flexible on this.
If we can export concentrate, that will mean that we wouldn't need to incur the -- whether we can get that for a short period of time or for the entire duration of the project remains to be seen. But if we can achieve that, that would significantly reduce the capital expenditure by removing the need to build a [ BIOX ] plant. It would derisk the project, particularly in the eyes of North American investors who are probably more wary about [ BIOX ] investors elsewhere in the world.
And they may also have implications for the eventual tailings facility and then just looking at the tailing facility, Currently, (technical difficulty) we intend to locate it on a very flat area in Bilboes. We may be able to move it to an area of Motapa, where we can effectively lean it against the hill and thereby reduce the need for all the retaining walls, which we, again, would reduce some CapEx.
The tailings facility is the biggest component of the entire capital of the project, it's nearly $100 million. So anything we continue to reduce that cost will benefit the project. But also having seen some good results coming out of exploration at Motapa, we want to continue to do more work at Motapa and potentially one day fall into the Bilboes feasibility study, a resource at the (technical difficulty) Motapa property, okay?
So that's the work that's going at Bilboes. Just turning on to the next page, just to reiterate, I think I've said this before, but just to reiterate our approach to funding Bilboes. Our objective is very simply, it is to maximize Canada's NPV per share. That really includes three elements to it. The first is to optimize the overall project economics. The best internal rate of return we can get on the project. And that's why we're looking at areas that is like a potential impact of concentrate and/or moving the tailings facility.
The next thing we want to do is to maximize the debt funding for the project within the constraints of financial prudence, okay? And the whole point of the system is to minimize equity dilution, okay? And so as part of that, we're also evaluating the potential for near-term revenue opportunities elsewhere in the portfolio by which I mean re-leaching potential for really -- heat pads at (technical difficulty), which is in the Bilboes property and at Motapa, and we also think we may have some near-term revenue opportunities at Blanket although (technical difficulty) resource that we found late last year.
But in terms of debt funding, we think the project, the Bilboes product has a very high capacity for debt. We think that nonrecourse debt is more likely to be limited by overall banksâ lending constraints about 65% to 70% of the total cost of the project.
If it wasn't for that, we believe that actually Bilboes could carry more debt. But at this stage, there's three potential funding sources, which are coming in focus, I'm going to set out there. One of them is African DFIs, the other one with South African commercial banks working with ECRC cover. And the third is a resource specialist credit or private equity outfit. It could be one or any permutation of those three.
But it's safe to say, whilst we've had preliminary engagement with all three of these groups, we can't really get down and get dirty until the feasibility study completed, okay? But at this stage, all the indications that we received as the project is eminently fundable and we are focused now is how do we optimize those project economics (technical difficulty) minimizing dilution, okay?
(technical difficulty) Just a word on exploration. At Motapa, the exploration focused on three areas which have historically been in mind. So that's the top, and North top, essentially the top of South, very much native.
But we're very excited have actually got good results from a new area called [ Mpudzi ]. Over the course of the year, we did just over 5,000 meters of (technical difficulty) drilling 4,000 of DD drilling. And that shows widespread mineralization over nine kilometers run slight length.
So this year, the program for this year is targeting shallow oxide tension and then also the deeper sulfide resorts, which indeed course, if we can find anything would form part and parcel of the Bilboes project. So that's Motapa looking very exciting and the Blanket, as you know, in May, we did a resource upgrade.
We've more than doubled our SA1300 reserves, a very substantial increase in resources. This year, we're focused on increasing the confidence level of those resources to push more into reserves but then we're also now beginning to evaluate new areas, and that's outside the existing mine footprint.
So that's on the funded (technical difficulty) formation, which is about 800 meters to the east of the current mining area. And also, we believe we've got potential for some shallow oxide resources at Blanket. So we're beginning to look more expensively at Blanket is sort of the traditional areas that we're currently mining.
So I think we've pretty much finished. In terms of the outlook, with -- as you can see with James, the new COO, we're focused on maintaining stable production of Blanket. We want to get away from the generations that we've had over the course of the last two to three years. We're investigating near-term opportunities across the portfolio, Blanket, Bilboes and Motapa. We continue to advance the work on builders and how we can convert that into an asset producing asset.
We're doing further exploration at Blanket and Motapa and in the next year or so, we'll continue to invest in bank with a view to achieving longer-term cost reductions and improving the reliability and the resilience at the Blanket operation. So I think we're finished in which case we can open this to questions.
Questions and Answers:
Operator(Operator Instructions) Nic Dinham.
Unidentified Participant 1
Just a couple of questions. One is what is the status of the solar power project, the sale of that asset? That will be the first question.
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
Sometime this week, we expect.
Unidentified Participant 1
So the second question is to James. It's a little bit about your sense of reliability of what you can produce out of the mine. I know we have a target that's gold related. It seems to indicate that you should be able to pull out 800,000 tonnes out of the shaft, not necessarily process it in the next year. Is that the right sort of number we should be picking into our models?
James Mufara - Caledonia Mining Corporation PLC - Chief Operating Officer
Yes, Nick, that's the right sort of number. 800,000 we should pull out of the mine, yes.
Unidentified Participant 1
The third set of questions relates to Bilboes. And it's back to you, I think, Mark, the tie-in with getting a resource or a reserve out of Motapa is somehow gives a sense that this could be almost like a year or two years to develop a reliable reserve that you could weave back into your feasibility study. That's the first question about the Bilboes.
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
Sorry, (technical difficulty). Yes. Look, I think we'll take as long as it takes to get the best project we can, okay? So if we feel we've got a project that works this fundable based on just what's at Bilboes right now. That's fine.
We'll run with that, and we can introduce Motapa at a later stage. If we feel that the introduction of Motapa would materially affect the equity and the debt story, we owe it to ourselves to consider that, okay? So like I say, if you go back to what I said, we consider things on the basis of the net present value per share, okay? and that includes the effect of any delay in the project, okay? Time value of money.
There is competing -- so it's various sort of competing tensions will be optimized the project in terms of maximizing NPV, minimizing dilution and doing something quickly or slowly.
Unidentified Participant 1
Second thing was you're talking about maybe a change in the tailings dam strategy because you're looking for a hill. But you also mentioned in passing that it could affect what to do. Now obviously, the input there is if you are able to, in total, get your concentrates toll treated by somebody else, the nature and designation of the TSF is going to change. Is that what you're thinking about?
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
Correct, yes. Now that really only works if we can get permanent permission for export concentrate. So if we only get temporary permission that will still mean that we're going to need to set the tailing facility up from the outset so that it can receive material from a [ BIOX ] plant even if that [ BIOX ] may not be in place for two years.
Unidentified Participant 1
100%. Okay. So finally, the toll concentrate idea is awesome. So I mean, from an outsiders perspective, but there does seem to be a -- outside of the coin, which you may be limited in scale and volume of those exports simply because one can't imagine that too many people within the economic catchment area of your concentrates are going to be able to accept what you initially proposed to be your production.
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
Yes, correct. And I would just say this opportunity has emerged very recently. So we do need time to consider it. And there were swings around that, you're quite right. So it's something we need to consider. But this has only materialized within the last four or five weeks.
Operator
Howie Flinker.
Unidentified Participant 2
So three short questions. One, I read correctly that your bank debt is down to about $2 million?
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
Slightly more than that. We -- Our net cash would be -- let me just find it.
Unidentified Participant 2
(technical difficulty) that.
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
We've got more cash than debt, yes, but the strategy will always be to have debt in country and cash out of the country. That will always be the strategy.
Unidentified Participant 2
Second, are your taxes going to be 42% as they seem to be in the fourth quarter?
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
Pretty much. So if you were to look at -- in the MD&A, we break down the tax. We'll break it down into Zimbabwe income tax and Property deferred tax, South African income tax and various bits of withholding tax. If you look at Zimbabwe income tax plus the [Property] deferred tax and express that as I look at that as a percentage of the gross profit, which equates pretty closely to Blanket's PBT, you'll actually find that rate is about 20%-odd, 20%, 24%. So that's the underlying sort of upper commercial tax rate.
They did -- commercial tax rate in Zim is 25% -- 24%. On top of that, we incurred tax leakage, I think it's about $1 million of withholding tax as we move things around the -- as we move things around the group, the management fees that we pay from Blanket to South Africa aren't tax allowable in Zim, but they also incur withholding tax. And then we have all of the expenses that we pretty much incur outside Blanket.
So that will be in Johannesburg, Harari and here in Jersey aren't offsetable against profit because either here in Jersey, it's a zero-tax regime or there is no taxable profit. So you'll find that we're doing the best we can, but you're going to find that our effective tax rate does remain somewhat high because of some structural inefficiencies but not things that we can readily address.
Unidentified Participant 2
And the last question is probably some of the technical error. I got a weird announcement this morning (multiple speakers) (technical difficulty) 11,500 shares and $22 (technical difficulty) is that some technical error by the service provider?
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
I'm quite excited about that. Yes, so that's a company called Caledonia Investments, which is a UK investment trust. And somehow, I don't know what happened, but somehow their announcements ended up on our website. I think it's been rectified. I hope I don't (technical difficulty)
Unidentified Participant 2
(technical difficulty) but I wanted to verify it.
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
I got slightly excited about that as well.
Operator
Tate Sullivan.
Unidentified Participant 3
Mark, you mentioned retirement expenses in 4Q. Are you within your cost guidance for 2025, are you planning more retirement expenses?
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
No. Well, there'll (technical difficulty). I mean 104 people out of a workforce of 2,200 reflects the fact that we haven't really -- we haven't imposed this policy for very, very many years. So we have people doing pretty much full-on physical exercise, physical jobs. I mean even if you have a supervisory role, going underground is hard work in their mid-70s, and that was clearly inappropriate.
So the retirement honestly will continue to be enforced, but it will now only affect a few people a year. So it will be nothing like the magnitude that we saw in 2024.
Unidentified Participant 3
And then you (technical difficulty) -- sorry if I might have misinterpreted, but in terms of the 4Q costs were some of the higher labor costs associated with the lower availability of electricity and if so, why?
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
Yes. So maybe James can [ comment ] this, but the first part of the quarter was terrible because we had some really serious electricity problems it started raining, which meant that the grid collapsed. So we're getting very poor power from the grid because it was raining, it was cloudy, which meant that the solar plant doesn't work particularly well when it's not sunny.
There was also an equipment failure within the solar plant, which we managed to rectify, but it was a bit of a problem for some time. I think pretty much -- I mean, I'll hand over to James in a minute, but I think by the time we got to the end of November, things are looking a bit bleak, right?
James had to do some fairly fancy footwork to get his team together to raise morale and get them focused on delivering in December. James, do you want to talk about what you did? Because it bloody worked, whatever you did.
James Mufara - Caledonia Mining Corporation PLC - Chief Operating Officer
Yes. Thanks, Mark. I mean, we had a very bleak started the quarter when we had -- like Mark is saying, we had (technical difficulty) infrastructure is not that well equipped. I mean, they collapsed with the rain, we did quite a lot of (technical difficulty) and this last rain season. I mean so the (technical difficulty) part of -- they supply us.
The warfare have not been done. So we actually have to jump in with a lightning strike that actually cause some of our transformers to (technical difficulty) we had to run around and get that equipment to start operating again.
Solar was not waking, but we then regrouped the -- (technical difficulty) troops to say, guys, and we need to get what we need to get (technical difficulty) bit of screen capacity within the plant that we also utilize. And unfortunately, it meant that we had to [abandon] the midnight cavern and we wait sometimes through [Sundays] to try and get the production mission going again. I have to -- so it worked.
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
Look, I mean I don't like to see people having to work overtime, and worked hard, but they were paid for it. They were incentivized to do it. They had -- they left, they finished the quarter with the tails are up -- and clearly, that now continued into this year. And it's a virtuous circle. The mine is performing well. They're getting production bonuses. Everyone's happy. So it's a virtuous circle.
Unidentified Participant 3
And then my last question -- thank you, great context. And is -- for 2025 costs Mark, is your is the greatest variable. You mentioned a slight impact from higher employee costs, but is it higher cost of consumables, unpredictable electricity or another factor?
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
Yes, that's the -- one that is least predictable is electricity because to be honest, if the grid collapses and/or we have -- the solar pump works very well. The solar plant works better than we'd expected. But when it's cloudy, and I don't just mean super cloudy, just (technical difficulty) piece of cloud, that will reduce your power degeneration of about 2/3 so if we have any interruption to power, that means we've got no choice. We have to run the diesels and they're very expensive. So that for me is the biggest cost risk.
And over the course of the next two years, we've taken the decision as the Board that we must look at ways to try and insulate ourselves further, if not completely from the vagaries of the grid because this situation is not going to get better, and we must fix it.
Operator
(Operator Instructions) Duncan Hay
Unidentified Participant 4
Just going back to Bilboes on the concentrate sales scenario. You mentioned in value of money, which suggests that you don't want to hang around too long sort of waiting for approval. But would the -- is the strategy initially to try and get sort of -- an ideal scenario would be that you still concentrate there's no commitments to put in the [ BIOX ]. Is that sort of preferred? But if you have to compromise then the priority would be to sort of get moving on the project and try not to not hold out too long.
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
Yes. So I mean the lever the government has typically got is they'll allow you to export concentrate for a period of time, like two years, after which you're then supposed to put in a [plant] that can do the (technical difficulty) beneficiation. And if you fail to do that, then you'll be hit with punitive taxes. So that's -- that could be one option. Unless the government just decides that, frankly, we'd rather have a project but not have a project, in which case, export concentrate forever.
Unidentified Participant 4
Because that's what they've been doing on the platinum side, isn't it? They've been -- they've reduced it .
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
Yes, the platinum side, that's where they have actually held out and forced the platinum producers to do low income through beneficiation. But I think there seems to be an increasing pragmatism from government. So we'll explore it.
Operator
Thanks very much. We have got no further questions at the moment. So Mark, maybe back to yourself for any closing remarks.
Mark Learmonth - Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
Now look, it was a strong -- a substantial improvement in 2024 compared to 2023. Very pleased to see stability of the ZiG and that's continued into 2025. Very pleased to see an improvement in cash generation and much better reliability in terms of mine performance.
And we're genuinely very excited about some of these near-term opportunities, which could make a significant contribution to our cash generation. So I think we've come through a fairly difficult 18 months to say, and I'm hopeful that certainly Q4 and then into Q1, you'll begin to see a substantial improvement.
So we look forward to showing that with you. Thank you.
Call participants:
Corporate ParticipantsMark Learmonth, Caledonia Mining Corporation PLC - Chief Executive Officer, Executive Director
James Mufara, Caledonia Mining Corporation PLC - Chief Operating Officer
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PresentationRefinitiv StreetEvents Transcript
Q4 2024 Caledonia Mining Corporation PLC Earnings Presentation
Mar 31, 2025 / 01:00PM GMT
