Caledonia Mining Corporation Plc ($CMCL)

Welcome to the Caledonia Mining quarterly and full year results 2025 presentation for analysts and investors. I would now like to hand you over to Mark Learmonth, who is the CEO. Mark, over to you.

Good afternoon, and welcome to this management conference call. If we could move to the first slide of the presentation, please. Just go to the disclaimer. So that's the standard disclaimer. If we could move on to the next slide, please. Presenting teams' me, Mark Learmonth, Caledonia's Chief Executive. We're also joined by Ross Jerrard, who will run us through the financial performance for the year; Victor Gapare, who will talk to us about what's happening at Bilboes; and Craig Harvey will give us an update on the various exploration initiatives. If we could move on to the next slide, please. So just in terms of the summary of the results, it was a very strong financial performance, underpinned by a higher gold price and some consistent operating delivery. Revenue up by 46% to $267 million. Gross profit up by 78% to $137 million. EBITDA up by 100% from just less than $60 million to just over $125 million, and profit after tax, up by 200% from $23 million to $67 million. So there's some quite big numbers there. Ross will unpack those numbers in more detail in a moment. Should we move on to the next slide, please? Before we go much further, can we just briefly discuss Caledonia's value creation proposition. So from one angle, what we see here is looking at this from the perspective of our distributions in country to government by way of taxes and royalties and also to our local shareholders. Over the course of the last 9 years, we've distributed just over $0.25 billion. So we're making a very, very substantial contribution. And you can see quite how that increased in 2025 as a result of higher taxes due to higher profitability, higher royalties due to the higher gold price, but also an increase in local dividend payments to our local minority shareholders as a result of the strong financial performance and the unwinding of certain local ownership initiatives. So that's very pleasing to see. But moving on to the next slide. As well as paying $0.25 billion out to local stakeholders, we've also delivered a very significant return to our shareholders. So the top line shows Caledonia's share price over 10 years with dividends, and we've given a return of just over 1,000%. Over the same period, GDXJ has increased by 464% and gold up by 300%. So as well as making significant contributions locally, we're also delivering a very, very healthy return for our shareholders. If we move on to the next slide. Right. Let's just quickly focus on the operating results. Clearly, we had a very unfortunate fatality in September as a result of a secondary blasting incident. As a result of that, we initiated a comprehensive review of our safety practices and our safety procedures, our operating controls and our training programs across the entire business with the objective of improving our risk management and making sure that we operate as safely as it's possible to do in a very hostile underground environment. That includes instilling operational discipline, a proactive forward-looking approach to identifying hazards and avoiding such hazards, and embedding a zero-harm culture across the organization. Should we move on to the next slide. But what we see here is the usual graph. The top graph shows our tonnes milled and grade. The bottom graph, the bars show the ounces and the line shows the recovery. What's notable really on the top graph is that the tonnes milled has been stable. We're pretty much operating the plans, the metallurgical plan, that's the crushing and milling and the CIL plant, pretty much operating that at maximum capacity of about 820-odd thousand tonnes a year. And that's been very stable, largely because we've been able to make use of the stockpile to draw down from the stockpile on those rare occasions when the mine hasn't been delivering the tonnes. But also what's clear from the lower line is the extent to which the grade is lower in quarter 4 and quarter 3 than it has been historically. Part of that is due to the fact that temporarily, we're mining lower-grade areas as we're developing into high-grade areas, that will, we expect to reverse into the second quarter of 2026. In the first January, February, we're still mining relatively low-grade areas. That has improved in March. And also to some extent, as we've been drawing down for the stockpile, the stockpile itself is relatively low grade. The bottom chart clearly shows the ounces, but it shows the drop in recovery, and that is largely due to the lower feed grade. The tail grade that we deposit onto the tailings facility, pretty much it's 0.2 grams a tonne. We're not going to get much better than that. So inevitably, that means that the difference being that the recovery goes down. Can we move on to the next slide? Craig will talk in a lot more detail about exploration towards the end of the presentation. Our exploration activities at Blanket are really targeted with replacing what we're depleting. So we're effectively standing still. Nevertheless, we've actually done rather better than that. So over the course of the year, over the course of the quarter, quarter 4, you can see that we added quite substantially more tonnes than we depleted. And as James -- as Craig will explain later on, that will, in due course, result in a revised reserve and resource statement for Blanket. Should we move on? Right. I'll now ask Ross if he could run us through the financial results. Ross, could you do that?

Thank you, Mark, and good afternoon, everyone. Before we dive into the financial results, I just wanted to draw your attention to the format of the reporting. And as previously advised, Caledonia is now classified as a foreign private issuer under Canadian rules. So the standard filing requirements in Canada that you've historically seen has changed. We will be filing our full financial statements under the SEC rules. So included in our 20-F, which is scheduled to be filed in April, you'll see the full financial statements and controls at a station, and that's all going to be done in April. So I'm delighted to talk you through the financial results today. And you can see on the summary slide in front of you, we've had a fantastic year. The performance was really driven by the benefit of the higher gold price environment, but also delivering the ounces. Blanket mine produced 76,000 ounces of gold in 2025 and sold 77,000 ounces. The Bilboes oxide operation produced and sold 1,683 ounces of gold. So together, they totaled that 79,000 ounces on the top right hand of the chart. Importantly, to highlight our on-mine costs were up some 19%. And the unit costs were marginally above those cost guidance ranges that we had guided the market. This was really a reflection of the restriction of access to some of the higher-grade areas, but also some inflationary pressures and our continued investment in development to ensure long-term operational reliability and safety, but also that grade profile. So with grade coming through slightly lower than we had originally anticipated, that did have a flow-on impact on our unit costs, just slightly above what we had guided. The overall result, though, was a very pleasing financial result with EBITDA up 109% to $125.3 million. which was a significant improvement. And after our capital expenditure, which was largely on track to guidance when you take into account some commitments that will roll over year-end, we delivered on our CapEx profile, and all resulting in a healthy free cash flow of $62 million, which was up some 483% on the prior year. And after our distributions resulted in an earnings per share, which was at $2.83, which again was up over 200% for the year. So a very pleasing set of financial results. Just diving into a little bit more on production costs. So if we can turn to the next slide, please. You can see on the bottom right-hand pie chart, the makeup of our production cost categories, which is largely driven by labor, consumables and power indicated with the blue, orange and green slices and then a little bit 10% across admin. You'll see in the figures, our overall production costs went up 25% across the group, 19% was an increase in Blanket. And really, those were driven by those 3 buckets of labor, consumables and power. Our labor costs were up this year, again, during -- due to higher overtime payments that were made during the year with production bonuses, together with some wage inflation. But really, the delivery of the ounces needed to -- was a result of more volume being moved and hoisted to compensate for that lower grade. And as a result, we had to pay that overtime and the various bonuses that came through the system. Our consumables were up some 14% for the year. This was driven by some of the inflationary impacts on consumables and reagents and the like. But there is a ZiG premium in terms of local procurement. So there's been a big push this year in terms of deploying our local ZiG component back into the market. With that, there is a slight difference with the ZiG versus U.S. dollar differential in terms of the local market. And I would highlight that it's been a very pleasing year in terms of foreign currency. The differential between the ZiG and the U.S. is very close now. We're not seeing the high differentials that we've seen in the past. But it has meant that as we've taken a strategic decision to deploy into the local procurement market using ZiG, we have incurred an additional premium in terms of that ZiG to U.S. dollar differential. And we'll talk a little bit more about the overall ForEx loss when we talk through the cash flows, but that has been a driver in terms of our consumables. Our power costs, there have been grid and genset power overruns, which has been really driven by supporting that additional output. We're obviously mining in deeper areas within the mine, driving higher power usage and requirements and obviously incurring more power. And we do have initiatives in place that we will address these 3 buckets. as part of our ongoing cost initiatives to ensure that we can at least reduce or at least maintain our cost profiles in those significant buckets. Moving on to the next slide, please. You'll see the results as we work our way through the profit and loss. So top line revenue up at $267 million, driven by those ounces and the higher gold price that I've spoken to. Our royalty this year was up at $13.5 million. That is driven by the higher revenue number. And I would draw your attention to the change in the royalty rate. So as we deliver ounces at over $5,000 an ounce, they do attract an additional 5% royalty charge. Our production costs, as already indicated, are up some 25% and depreciation charges were largely unchanged. So we were very pleased with our gross profit that was generated, up some 78% for the year, driven by those improved margins and thanks to the gold price. You'll see the net foreign exchange losses was down from $9.7 million down to $3.3 million this year. And again, that was a very pleasing result in terms of the exchange differential that we had historically seen, and we're very pleased with the ability to access the willing buyer, willing seller market. The $8.5 million is the profit on our solar plant. I won't talk to that. We've gone through that in previous results presentations, but it was pleasing in terms of being able to sell that asset, generate proceeds that we could then deploy across the group. I would draw your attention to the administration costs that $20.48 million. That is higher than historical run rate and general trending that we see going forward. This year, we have incurred some quite significant one-off fees, predominantly around our advisory fees related to the convertible, some additional employee costs that have gone through the system and some other transaction costs that we don't see ongoing, and we think that run rate will come off by some 10%, 12% more closer to a $17 million type number on a per annum basis. We've incurred a fair value loss on our derivative financial instruments. So those are the hedging instruments that we put in place to protect our side -- our mine and the gold price at a $3,500 gold price. So those hedging instruments are really put through the P&L. We don't do any hedge accounting or anything that is nuanced to that extent. So everything goes through the profit and loss. And we were delighted with the ultimate profit before tax of $106 million, up 162%. The tax expense was higher off this great result, but also included the capital gains tax on the solar plant sale, which pushed up those -- that tax expense a bit more than a normal run rate. But delighted with our P&L result with an overall profit for the period of $67.5 million. If we can move on to the next slide, please. I'll just quickly touch on some of those aspects from a cash flow perspective. So our cash flow from operations was up at $105 million, up 90%. I've spoken to interest and tax payments, which included that solar sale. Our CapEx was on track in terms of what we had guided the market in terms of expenditures and the proceeds from the sale and the gross proceeds from the solar sale were able to be deployed into our treasury options where we deployed those into various fixed term deposits during the year, and we're able to allocate central treasury and start our treasury function as we look to Bilboes and beyond. Ultimately, our net cash used in investing activities was able to then be deployed across some dividends paid. So the $19.9 million was a result of dividends paid both to our CMC shareholders of $10.8 million, but also to GSCOT and NIEEF so our various partners at the Blanket mine level in terms of deployment. So they got $5.5 million and $3.6 million, respectively. Ultimately, a very pleasing close to the period with a net increase in cash and cash equivalents of $32 million for the year, which was a great result. And if we move to the next slide, you'll see our overall liquidity and what it means is that we exited the year with cash on hand of $35.7 million. And if you add in our bullion on hand at year-end, plus some gold sales receivables and our fixed term deposits, we -- before utilization of facilities, we had almost $60 million available to us. And a total liquidity of just under $55 million. So a very pleasing result and a very solid position in terms of our performance for the year. On top of that, in early 2026, we were able to successfully complete a $150 million convertible note offering, where after inputting a cap structure, we received a net $130 million. So post year-end, we're in a very healthy cash position as we look to further development of Blanket, but importantly, as we start our deployment and our spend on our Bilboes project, which I'll talk to in a couple of minutes. So moving on. I'd mentioned that CapEx was largely on track, and you'll see our various expenditures that were aligned with guidance. So nothing that stood out in terms of where we spent the money. But ongoing sustaining capital expenditure was really about underground mine development, where we spent 22% of the CapEx budget, and that was really development and looking at new mining areas and underground developments targeting additional reserves and resources. 31% of the spend was sitting in the engineering department, and that covered the whole bouquet of electrical, mechanical and Central Shaft upgrading and engineering. And then there was 27% that went across the other mining departments in terms of mines, milling and the MRM department. Our only nonsustaining CapEx project was the tailings storage facility, and that accounted for 20% of the CapEx spend. So turning to the next slide, you'll see the slice of where those various spends occurred in terms of sustaining and nonsustaining split. But we were pleased that we were able to deliver those CapEx projects and continue to invest in the mine for the future with some solid cash flow generation. If we move to the next slide, please. Closing off on CapEx, you will see in the announcement that there's been some additional CapEx approvals by the Board. So our total group capital expenditure for this financial year 2026 is projected to be $178.9 million. The 2 key projects that were approved last week by the Board was $14.2 million construction of a $34 million (sic) [ 34 km ] power line connecting to the 132 kV backbone and a $2.2 million allocation against the central winder for the Central Shaft converting it from AC to DC. Both projects are great projects with quick payback periods and really underwriting some solid reliability in terms of power usage at the mine and also some imperative upgrades in terms of the underground mine. So we're looking to the future, investing in the future and making sure that some of these critical projects are delivered. Over and above that sustaining CapEx, we have $136 million allocated primarily against Bilboes, where $132 million is anticipated to be spent against both the FEED phase, but also some early deployment of expenditures against the Bilboes project and then just shy of $4 million, which is further exploration at Motapa project. If we can move to the next slide, please. We're delighted that the results of 2025 has delivered a solid performance, and we're continually looking at that balance of our capital allocation in terms of both growth projects and shareholder returns. And as you can see in the CapEx that we've both delivered and plan to deliver, we're looking at growth for the future and investing in that future for the long term, but equally conscious about shareholder returns. So we're delighted to have another dividend, a quarterly dividend of $0.14 per share. Dividends have been paid since 2012. So we continue with that continued payment of dividends and balancing both growth and shareholder returns. And I'll just draw your attention to the key dates in terms of that dividend payment. So if we can switch to the next slide, please. I'll now take the opportunity to hand it across to Victor to talk a little bit more about Bilboes.

Thank you, Ross. Can we move to the next slide? With regards to Bilboes, we've previously announced that the Board approved this project implementation in November last year. Basically, all the parameters which are in there, we have announced them before an IRR of 32.5% at a gold price of $2,548. Obviously, the returns are materially higher at prevailing spot gold prices. Can we move on the next slide. Basically, what we have shown here are really the economics at 3 different prices. The consensus forecast of USD 2,548 per ounce, the 3-year trailing average price of USD 2,350 price, and the price at which was on 10 March 2026, which was USD 5,177 per ounce. Obviously, there's been some volatility in the price of gold. So those figures at the end there, you can put any price you want and you can come up with different margins. But clearly, you can see -- you will see that the economics changes quite significantly if we apply the current economics. That's all we're showing. So effectively, what we have done is we've started implementing the project following approval. As Ross has said, we've raised some money, and we've appointed an EPCM contractor and that work has started. And we are hoping for -- the plan is to have the first gold pour towards the end of 2028 and our first year of full production will be 2029, which would be at just about 200,000 ounces per year. That's peak production. Can we move to the next slide? Ross will cover the funding aspects, what we have done and what we're planning to do. Ross, over to you.

Thank you, Victor. So our funding strategy for Bilboes covered 4 funding pillars, and we're delighted with our progress in terms of how we're tracking against that strategy. The first phase was underwriting our Blanket production and securing a series of put options at a price of $3,500 per ounce, that covered a 3-year period from January '26 to December '28, effectively the construction period. The key elements of that hedging strategy was really to provide a floor to the cash flows that were generated. It wasn't giving up any upside in terms of gold price above $3,500, but it did enable us to basically earmark the best part of $200 million from our own operations that we could deploy against the Bilboes project, at prices closer to $5,000 an ounce, that $200 million escalates to closer to $300 million. So it's a core cornerstone strategy in terms of using our current asset on the portfolio to underwrite the strategy. It also helped us in terms of our pricing discussions with the various banks and financial institutions in terms of how we'd sort of take on our various debt facilities. The second step, as you've seen and previously mentioned, is the raising of some funds from a convertible note offering. It was $150 million raise. It was upsized from $100 million due to some amazing demand out of the U.S., and we're delighted with the result that we were able to receive those funds in short order. And we were able to also allocate some of those funds against the cap call structure, which effectively increased the conversion price to $56 a share, up from the $40 a share. So those 2 steps, steps 1 and 2 have been completed and has enabled us to be able to move forward in short order in terms of the remaining funding facilities. The first one is an interim funding facility. So we're currently in negotiations with a consortium of both Zimbabwean and South African banks to raise a $150 million facility. You would have seen the announcement in terms of appointing standard -- Stanbic and CBZ, as co-leader arranges for that facility. and we're targeting the middle of this year to get that facility in place. And the cornerstone of that is, again, the Blanket Mine cash flows. And in parallel with that, the fourth arm is really the project finance facility, a longer burn rate in terms of getting that facility in place, but that formal process has commenced, and we're expecting that to be delivered in the next 12 months with the various due diligence procedures. So we're very pleased around where we're positioned with it, what we've done to date in terms of underwriting that financing strategy, and we're on track in terms of the discussions with the various banks and financial institutions. If we turn to the next slide, where this illustrates, I guess, our thought process and the overview in terms of our sources of uses and actually how we believe that this funding requirement will be best. I'll refer you to the right-hand side of the slide in the first instance in terms of the use of funds. So you'll see our capital cost is basically $485 million. But when you add in our capitalized interest and some working capital, the ask is closer to $600 million in terms of the package. On the left-hand side, you'll see the column at $3,500 an ounce. And you can see together with our cash and our net proceeds from the convertible bond and our forecast future cash flows, the ask from our senior debt and other facilities is just over $300 million in terms of delivery of those funds. If we move that pricing deck up to $5,000 an ounce, you'll see that senior debt and other facilities reduces down to closer to $170 million. And we're well on track in terms of getting that funding in place between both the interim and the wider project finance facilities. So we're really pleased in terms of the status of the financing work stream. Importantly, we've got some big spend that is coming up. So we need to deploy the best part of $130 million in the third and fourth quarters of this year as we start the more significant spend on the Bilboes project. And we're excited about that, well on track with that. And I think it's all coming together very nicely. So with that, I'll hand it across to Craig Harvey.

Thank you, Ross. I'll just give you -- I'll give you an overview of the exploration activities that have been taking place at Motapa and Blanket in the past year. So if you could go on to the next slide, please. So 2024 and 2025, Caledonia has put quite a lot of money into Motapa. I mean we have drilled surface drill holes totaling just under 30,000 meters. It's a very strategic asset. As we can see on the map on the screen, it's located directly to the South of the Bilboes project, which we have just heard about. That kind of scale from Motapa North to Bilboes is between 200 to 400 meters away. So I think we can all draw our own conclusions as to the synergies between Bilboes and Motapa. Bearing in mind, that's basically hosted into the same shear zone. Mineralogy, metallurgy is expected to be quite similar. So going forward for 2026, we have had a further allocation of $3.8 million exploration. We will continue looking at Mpudzi, and we're going to focus on Motapa South for the year. Clearly, there is potential for a sulfide resource below the historic open pits. But at the same time, there's a strong potential for oxides to the East. We had put in 2 drill holes to have a look. Results were encouraging. So things to look out for at Motapa. During Q2 2026, the company will be publishing a maiden resource estimate or probably be publishing a maiden resource estimate. We are just waiting for some of the final QA/QC checks of the data and geological interpretations to be complete. But in all likelihood, during Q2 of 2026, we'll see what the drilling activities have actually given us. If we can move on to the next slide, please. So during 2025, there's been the continued deep hole or long-haul exploration program at Blanket. So just to give you an overview of the areas that we are drilling. So on the northern side of the property, which is to the left of the image, there where you can see Lima, it's the Lima and Eroica ore bodies. And to the south on the right of the image, that's the mainstay of the mine. It's the Blanket and the Blanket Quartz Reef ore bodies. So I will zoom into a bit more detail on each of these areas. If you could move on to the next slide, please. So on the Blanket side, where we've got essentially a whole bunch of ore bodies that come together, AR South, the Blanket Quartz Reef and the Blanket ore bodies. And the blanket ore bodies are Blanket 1 through to Blanket 6. So of course, we've also got Blanket 7 now. But what is important to note here, so I've got a grade legend on the side of the map there. And really, what you want to be looking for is the little purple stripes that you see coming off from those drill hole traces. So anything that is purple there is 5 gram a tonne plus. Now in the next month or 2, again, we're just finalizing some QA/QC checking from the lab, but we will be putting out a press release regarding the drilling results that we've done at Blanket. And that will give us or it will give people insight into the widths that we encounter in these grades. Very, very exciting. So 34 Level is the base of the Blanket mine currently. We are putting a decline, as you can see there from 34 to 36 Level. It's on 36 Level at the moment. We are starting with the 36 Level in infrastructure development. And what is key to note, so 34 Level, 1,110 meters below surface. The deepest hole there that we have represented with this little blue, this little purple stripes is 277 meters below 34 Level. Now 277 meters below 34 Level equates to a depth of approximately 1,350 meters, which equates to a 42 Level. So our kind of main levels are set up 34 to 38, 120-meter lifts apart. So we are quite clearly looking at all things being equal, there's another 2 main lifts at Blanket that we are going to have a look at. Very, very encouraging. We carry on doing the work. Just to give a bit of reference, so if you had to move to the south to the right of the image, we will be putting in another hanging wall drill-and-draw cubby to create another fan of drill holes in due course adjacent to these holes. This is kind of at the limit of our inferred resources. So clearly, with this drilling coming in, we will be looking at upgrading inferred to indicated as Mark, the CEO has indicated with a view to upgrading mineral resources and mineral reserves in due course. So if we can move on to the next slide, which then focuses on the northern portion of Blanket mine. So on the very left, the very northern portion, a little bit of colorful goods that you see there, stopes is the Lima ore body. And in the middle is the Eroica ore body. Now Eroica has been a mainstay. And why you only see a couple of drills there is the majority of this area was drilled during 2023 and 2024. You can already see some of the development that's accessing these areas. The majority of this area is now indicated resource. But you can also see that there's a long hole that's also maybe 60 meters below 34 Level. So currently on a 36 Level type horizon. Clearly, as we advance 34 Level will have a hanging wall cubby put in place, and we will continue drilling on the Eroica ore body from 34 Level down to 42 Level. On the left-hand side with Lima, again, you can see some of those little purple stripes, which represents 5 gram a tonne plus. One hole on purpose, we pushed down to around the 34 Level mark to test the depth to see that we're not wasting our money. We did pick up the Lima ore body. But Lima itself is not one single ore body. It's made up of 6 ore bodies. So there's a lot of scope to continue doing this. The lowest level of mining on Lima is at 750 meters below surface. You can just work out for yourself. If we take it down another 250 to 300 meters, we're talking 22 Level to 34 Level of mineral resources that may be exploited. Again, below 22 Level. It's inferred resources on Lima. With the drilling coming in, we will be looking at including that and seeing if we can upgrade some of the inferred resources into an indicated resource or better. So in a nutshell, Blanket keeps on going. The grade is still looking good. The grades, the widths, we obviously model what we are expecting to find with our drilling. And it continues to return similar, if not better results at depth. So thank you for that. With that, I'll hand back to Mark to give some closing comments.

Good. Thank you, Craig. We're kind of running out of time. So I just want to draw your attention to an event that we hosted at the -- on the fringes of the Cape Town Mining Indaba in February. As along with 5 or 6 other foreign-owned Zimbabwe mining companies, hosted a briefing event where we invited representatives from the Zimbabwe government, so Minister of Mines, Minister of Finance and the Reserve Bank to -- and the objective was to try and dispel some of the pervasive continued misunderstandings about what it's like to operate in Zimbabwe. It was very well attended and the way the representatives of the Zimbabwean authorities have engaged, they are very transparent, constructive way with the audience, hopefully, is a first step -- our first step for many to trying to overturn some of these misunderstandings about Zimbabwe. So that was very good. Can we move on to the next slide? So just to finish and then we move on to questions. So clearly, our strategic focus after the fatality last year is to continue commitment to the safety of our people, objective to maintain reliable and operations at Blanket, which let's face it, is going to be an important generator of capital for the construction of Bilboes. But as you've heard from Craig, has very significant long-term extension plans in its own right, leverage the strong gold price to invest in Blanket projects to create operating resilience and to mitigate further input cost pressures. Moving along with Bilboes as quickly as we can in terms of the financing and development plan. And to continue to explore at Motapa, which in due course, we think will be a very exciting project. So all of those together really mean that we're continuing to execute our strategy to become a multi-asset Zimbabwe-focused gold producer. So I think that's the end of the presentation. Can we open it up to questions, please?

[Operator Instructions] Our first question is going to be from Howie Flinker.

Can you hear me now?

Yes.

What is the maturity of the convertible bond? I have another question, too.

It is -- I think it's -- is it 7 years, Ross? It's outside the -- it's a slightly longer-dated maturity than most convertibles, and that was specifically so that it matures outside the timing of the scheduled repayment of the project finance. Ross, is it 7 or is it slightly longer?

7 years.

Yes. Next question, Howie.

Yes. I thought the solar plant was in the Jersey Island. So...

That would be a big mistake because it's often not very sunny here.

No, I thought the ownership was there and it was tax-free. What's the capital gain rate on that?

Ross, can you help?

It ended up being $2 million. So -- and there was a combination of some of it was on a total capital gain and there was a profit element, but it was $2 million.

And what is the tax rate on the loss on the derivative? Was that a regular tax rate or something different?

No. So yes, all the derivatives are held outside. They're all held here in corporate. So it's 0% for the derivatives because they're sitting in Jersey.

I think for practical purposes, it would be very difficult, strike impossible to structure derivative holdings through Zimbabwe. I think having to go through the various RBZ approval process that would just fly in the face of being able to -- when you decide to do these things, you do them very quickly and to have to pause for RBZ approval would just make it impossible.

So the effective tax rate on the derivative pretax and post tax is the same, right? 0 taxes.

Zero. Yes, right.

Yes. Finally, I'm going to say this is pretty thorough financial accounting, nice job.

We've got our next question from [ Joseph Parish ].

Yes. Great presentation and anticipated some of my questions, so this will simplify things a bit. The only thing I really had left to ask was has to do with power cost. The solar plant, of course, was intended to keep those contained. With the recent conflict in the Middle East, right, there's some temporary increases in fuel and energy prices. Depending on how long this goes on and maybe just with the higher operating cash flow you're enjoying on the mine, would further investment in solar plant facilities at Blanket become a higher priority as you're looking at these? Or are these something that's being considered?

No, it wouldn't. So let's just deal with our exposure to fuel. We've got -- Blanket uses about 2 million liters of fuel a year. Approximately half of that is diesel generators, the other half is used on diesel equipment in the business. At last year's diesel price, that represents about 3% of our OpEx. So we're not particularly exposed to diesel in our operating costs. And in terms of supply, we've got just over 6 months of supply either on the property or on consignment stock. So we're not particularly exposed there. The problem with solar is that when the sun doesn't shine, you don't get solar. And the particular issue we face right now is that the -- the way electricity gets through the grid to Blanket means that the last sort of 30-odd kilometers goes through a pretty poorly maintained 33 kV line, which typically has bigger reliability problems when it's rainy. And so you've got the combined effect of rain, which means that you've got a higher chance of power interruptions from the grid. And also, it means that the solar plant is not working very well. So the 2 issues kind of compound each other. So the -- what we're doing is we're putting in a 132 kV line to -- which we expect will reduce the average incidence of power outages from, say, 30 hours a month to an average of, say, 3 hours a month, and that will reduce our reliance on diesel. And to the extent -- and once you're connected to the 132 kV line, that gives you much more flexibility to access power both in Zim and in the region where there is no shortage of power. So frankly, solar kind of compounds the problem doesn't solve the problem. So the simple answer to your question was no. I'm afraid.

We're going to take our next question from Mike Kozak.

You hear me okay?

Yes.

Great. So two questions from me. First one, sustaining capital for this year, it looks like it's increased from $27 million to $43 million, and you did a good job explaining where that money is going. But I didn't flag any change to the 2026 all-in sustaining cost guidance that you guys set a couple of months ago. I think between $2,100 and $2,300 an ounce. Are you going to stick with that range or hike?

That's clearly fallen between the gap in that we got the Board approval a couple of days ago for the extra CapEx. And clearly, I guess that should flow through into all-in sustaining costs. Is that correct, Ross?

That's right. And we're just looking at timing, Mike, in terms of when some of that will actually drop. So while the projects have been approved, we're just going to see when they're scheduled to be paid.

Okay. Got it. And then my second one, if I back out from your earlier quarterly results from last year, I should say, it looks like Q4, you recorded a derivative loss of around $4.8 million, I think. Is all of that related to the put options you guys bought in December? Or is there something else going on there?

It's all to do with the puts option.

But let's be clear. The point of the puts at gold, even with this current volatility, the gold price is much higher than the put price. The point of the puts, as I think Ross outlined, to make just to reinforce the point is it creates a floor price for the purposes of the Zim banks in terms of putting together the interim funding facility. So it is still strategically important to us.

Yes, for sure. I just -- for my own numbers, I want to know what to adjust out for and what to expect in future quarters. So I just wanted some clarity on that.

We've got our next question from Nic Dinham.

Usually, I'd like to spread around the questions. The first is for Craig. I think, Craig, it does look encouraging what you're doing. But coming back to Blanket Mine, is the recons between what you're actually getting out of the mine at the moment, adhering to what you would have expected from your ore reserve models?

Nic, yes, there are. So Q4 was affected by a couple of forced moves that we had to make. We could not access the areas as quickly as we would have liked. So we were forced into maintaining production out of kind of some lower grade, some medium-grade areas. As we all know, in mining, trouble always hits your higher-grade areas and people see it. So yes, it's maintaining what we are expecting.

Okay. Excellent. I think the next question is for Ross or sets of questions. Ross, it's a usual one. Have you repaid your facilitation loans to your noncontrolling interest? And the second question with that, I'll have a few more, but the second question is, with that is how many dividends did you distribute from Blanket? You've got some numbers here. It wasn't quite clear.

Yes. Next, barely I'll do it the other way around. So there were $60 million of dividends that were declared in 2025 from Blanket. Not all of that equated to actually cash move. There was an opening balance and the timing of the payments post period, but it was $60 million, and there's a $5 million rollover with $44 million paid during this year. So high level, $60 million, but there were some timing differences in terms of the cash flows. BETS repaid its facilitation loans in Q4 2023.

That's the employee trust.

That's employee trust, sorry. And NIEEF has got about $0.5 million left on it to be repaid.

NIEEF, is the government beneficial shareholder.

Okay. So it's all over for the -- from now, they'll be securing their share of the dividends from now on?

That's right.

In your -- one of the questions about the loss on the derivatives that you're reporting. And obviously, this is a moving piece because you're marking it to a price at the end of the period. Do you have a sense of what that number would be if you were to take today's price, what sort of loss would you be recording?

I haven't looked at it today. And I mean that range in the actual valuations range quite considerably as we do the pricing because it's a delivery of a put option each month for the next 3 years. So it's not a prima facie we're were under the [ $3,500 ], they all written off on day 1, there is a value that goes up. But I don't have the price for you today, especially after today's call.

I thought you might have an idea of sensitivity. And the last question is you've started to accumulate some cash and near cash equivalents and you've got some deposits being made here. What do you think you need in terms of keeping Blanket solvent and keeping the rest of the business lubricated with cash? How much -- what do you think is the minimum residual cash that you should have on hand at any one time or cash equivalents on any one time?

Well, selfishly, from a CFO perspective, I'd rather have a little bit more in the back pocket than normal, but anywhere between $30 million to $50 million, I think, would be a healthy position, particularly on the projects that are coming through the system. So we've got a large amount now that will be deployed. But I think, having that sort of quantum on balance sheet just gives us some protection in terms of where we're going.

So Ross, do you mean cash or do you mean liquidity? That's two-part.

Liquidity in terms of facilities.

Okay. And then just on the operational side, there was a discussion previously about a buildup of ore stocks. Now you run them down again because to meet the requirements at the end of this last period. Is your strategy still to rebuild those stockpiles?

Yes. So one of the things that we'll be introducing in the middle of the year is a new shift system at Blanket to introduce -- it will do 2 things. First of all, it will introduce 7-day working at the mine as a standard. And that's pretty common across the mining industry in Zimbabwe. And the mine drilling and blasting only currently takes place 6 days a week. So that should result in an extra day of drilling and blasting if we can get the stuff trammed and hoisted. In the ordinary course events, that should give rise to an extra 100,000 tonnes a year. In the short term, we'll be using that to accumulate a stockpile to see us through the hiatus relating to the AC/DC conversion. So currently, the Central Shaft works AC, the Central Shaft winder works AC. We'll be converting that to DC for safety reasons and also for cost reasons, but that will result in the Central Shaft not being able to hoist for a period of 2 to 3 weeks. And so we do need to make sure that we've got a healthy stockpile at the end of the year to see us through that cycle. So very much, there is the intention over the course of this year to build stockpiles. And then once we're confident that the shift system is working and we've got adequate stockpiles, then clearly, we'll be looking at what we need to do to address and use the extra production, increase our milling capacity. That's a work in progress. So at this stage, I can't tell you what the costs of increasing that milling capacity would be and what the effect on OpEx would be. Let's just focus on getting the shift system in, getting -- delivering the ounces, getting -- delivering the extra tonnes, building the stockpile to see us through the AC/DC conversion. And then for next year, there will be the -- hopefully, the story about how we're going to convert that into increased ounces. It's premature to say that at this stage.

Okay. Excellent. And then the final question for Victor here. At the end of this year, this time next year -- sorry, at the end of -- in 12 months' time, you will have spent circa $130 million on Bilboes. What will you have in place by the end of the period? What is your project going to look like on the ground?

Okay. So thank you, Nic. What we are really doing is placing orders long lead items is what we're basically doing most of this year towards the end of this year. That's really what we will be doing. We will probably have some contractors moving in at the end of the year, but really, most of the money we are spending this year it's on orders on the long lead items.

But that means nothing very little physically to see.

Yes, very little to see. The only thing you will see there are contractors moving in and starting to do some work.

So this will be in the form of prepayments and really, would it?

Prepayments and deposits. Yes.

Yes.

Our next question is from Tatira Zwinoira.

Can you hear me?

Yes.

All right. So I just have 3 questions. The first one, can you explain more about the consortium facility as in which banks in South Africa you are quoting? And what is their level of interest in supporting the company given the 15% nonresident tax, which resumed this year. Could you explain that? That's my first question.

15% nonresident tax. I mean, Ross, are you able to answer that?

No. Well, not specifically for the banks, but we've got 2 South African banks and then the Zimbabwean banks that are participating. So half a dozen banks that we're talking to for the interim facility. And yes, there's -- we've been pleased with the, I guess, the appetite to participate in such a facility with those banks. So no, we haven't had any negative connotations or discussions from that perspective. And then our PF facility is the African banks in terms of [ AFC ] that we're talking to and a similar positive feedback.

Okay. And my second question is PGM companies have reported substantial amounts of their ZiG portion of the export proceeds are being trapped at RBZ. I think there was complaints from Zimplats and Valterra. And I wanted to find out if Caledonia is facing such a problem with their ZiG portion of their export proceeds being trapped at RBZ.

No. Absolutely, not.

All right. Then my final question is, has your outlook changed in terms of the gold prices which you're expecting for the year given the geopolitical tensions happening in the Middle East right now?

So is that -- do you mean that we going to adjust our -- you're asking if we're going to adjust our production level? Is that the question?

Yes, considering that the commodity market has become volatile following to those geopolitical tensions.

No. The mine plan is pretty much set. I mean we can't just arbitrarily increase and reduce production. The objective is to mine to optimize operating efficiency and keep the mills full. What you could do is you may -- you could adjust your cutoff grade. So if you thought the gold price was going to be much higher, you might reduce the cutoff grade, so you can perhaps mine more material that's less -- would be less attractive in the low gold price environment. But no, within the current gyrations aren't giving us any thoughts about changing our overall approach to the mine plan and our mining schedule.

Next question is from Tinashe Duma.

Can you hear me?

Yes.

Okay. Nice presentation and nice performance as well, great performance. My question is how much of this year's performance is genuinely operational? I'm talking about the year -- the period under review. How much of its performance is genuinely operational? And how much is simply gold price leverage? I point that its production at Blanket was broadly flat and while gold prices by circa [ 44% ]. And from that, I could argue that your earnings were likely price led rather than execution led. So what concrete evidence can you give that the business can protect margins and sustain cash generation if the gold price normalizes?

Okay. So one of the things that should -- we didn't make clear enough is you're quite right in 2025, a lot of the good performance was driven by the higher gold price. One of the things that we are doing, and we have seen quite significant increases in costs at Blanket. If you look back over a 5-year period, in 2020, Blanket's on mine cost was $784 an ounce. Last year, it was $1,280. People need to understand that Blanket now is a very different mine from what it was in 2020, we're hoisting significantly more material from much, much, much deeper. In 2020, we were hoisting most of -- all of our material from 750 meters below surface. Now we're hoisting most of our material from 1,200 meters below surface. So inevitably, that means that you're going to be using more electricity even before you start taking account of the incremental need to use electricity for improved ventilation. And in terms of employees, if you look at the pointy end of the business, so that's the people involved in the mining, the underground training, the hoisting, the people involved in the milling, we're actually handling more material, more tonnes per person now than we were 5 years ago. But the other -- our costs have gone up, and that's -- if you look at our consumable cost, we're pretty much using less in the way of inputs like grinding media, cyanide, drill steels, we're using fewer kilos of that per tonne mill. But every year, year-on-year, we've seen our costs such as the cost of steel balls, which we use in the steel in the ball mills, they've gone up on average 10% per annum over each of the last 5 years. So the cost profile has gone up. What we're doing now is we're focused on trying to reduce dollar costs, in particular, the first 3 initiatives are targeted at electricity. So the 132 kV line, the AC/DC conversion, they will -- they are expected to give rise to significant cost reductions over the course of the coming 3 years. In addition to that, we're trying to use electricity more intelligently. So we're trying to reduce our overall power consumption by just being more clever about how we use electricity. The shift system that I referred to earlier on has got 2 aims. The first is to reduce worker fatigue by reducing the overtime and reduced overtime will clearly then reduce the -- some of our labor costs because overtime is clearly the premium rate. But the other thing, a lot of those cost reductions, I expect may well be given away in terms of further increases in costs that we know we're going to experience over the next 3 years or so, particularly in terms of providing better quality housing for the workers. And so the only way I can see that we can get sustainably reduced costs at Blanket is to increase production. And so as I've mentioned, we are -- we would expect, as a result of the shift system but introducing 7-day week working weeks instead of 6-day working weeks is to harvest more tonnes, which should give rise to more ounces, which should mean that our costs are spread over more ounces and therefore, get the cost down. So that's not going to happen quickly, but over the next 3 years, I would be hopeful that as a result of the combination of those packages, we can begin to get the cost down. But don't for minute, think that Blanket is going to go back to being a low-cost producer at $784 an ounce. It's not. The only way for a deep level, relatively low-grade mine like Blanket to be sustainable, and Blanket is 120 years old this year. And we want to keep it right, as you've heard from Craig, there's plenty of potential to extend Blanket's mine life by going deeper. And the only way we can do that is continuing to invest to improve resilience and lock in economies. So that's a long answer to a fairly short question, which I hope addresses -- which I hope answers your question. Okay. But let's be clear, the phrase I use is escaping forwards for any -- pretty much any mine in Zimbabwe, which is facing rising cost pressures, the only way to counter that is to escape forward through growth. And that's what we're looking for over the course of the next 3 years.

Thanks very much. And that concludes the questions that we have at the moment. So Mark, I'd like to give the floor back to yourself for any closing remarks.

Okay. Well, clearly, it was a good year financially as we've identified, largely driven by the gold price. We're focused very much on Bilboes, turning that to account. That will be a game changer, not just for Caledonia, but also for Zimbabwe. But we're not neglecting Blanket. And as I think the comments at the end of that Q&A session made very clear, we are focused on using this high gold price to invest in Blanket, both to try and tickle up the gold production, but also to lock in resilience and efficiencies. So that's going to be a 3-year exercise. It's not going to be a quick turnaround. But hopefully, clearly, we'll keep stakeholders informed as we move along. So thank you very much for your attendance, and we'll be putting out our Q1 results in about 6 weeks' time in the middle of May, okay? So thank you all very much.