Caledonia Mining profit rises; hikes cost target to ramp up production

(Alliance News) - Caledonia Mining Corp PLC on Monday said it profited from higher gold prices in the second quarter of 2026, despite production falling, and it raised its annual spending outlook.

Shares in the operator of the Blanket gold mine in Zimbabwe were up 3.4% to 1,670.00 pence on Monday morning in London.

Caledonia Mining's profit after tax rose 27% to USD30.0 million for the three months ended June 30 from USD23.6 million a year earlier. Pretax profit advanced to USD40.7 million from USD34.9 million.

Revenue grew 16% to USD75.9 million in the second quarter from USD65.3 million a year before, even though gold production was down 18% to 17,360 ounces from 21,070.

Caledonia Mining said the previous year's production figure reflected "exceptional" gold grades. Production increased by 18% in the second quarter of 2026 compared with the first quarter.

The company benefited from higher gold prices, even as production costs ticked up to USD28.7 million from USD24.0 million, and gold sales fell 13% to 17,811 ounces from 20,487 ounces. The average realised gold price was up 34% to USD4,259 per ounce from USD3,186.

All-in sustaining costs for the second quarter jumped 48% to USD2,678 per ounce of gold sold from USD1,805, which Caledonia Mining attributed to "higher sustaining capital expenditure, which reflects a strategic decision to improve the mine infrastructure". It also cited payments into an employment trust, advisory fees and royalties to the Zimbabwean government.

Looking ahead to the full year, Caledonia Mining expects the Blanket mine's gold output to range from 72,000 ounces to 76,500 ounces. In 2027, it expects production above that range.

As the company looks to ramp up production, it has hiked planned spending in 2026, with the benefits expected to materialise in 2027.

"Initiatives to increase production at Blanket are expected to bear fruit from the end of the third quarter," it said on Monday.

Caledonia Mining raised ASIC guidance for 2026 at USD2,500 to USD2,700 per ounce sold. In 2025, ASIC per ounce came in at USD1,952.

The company left its quarterly dividend unchanged from the previous year at USD0.14 per share.

Chief Executive Mark Learmonth commented: "Encouragingly, grades improved steadily throughout the period as access to higher-grade mining areas increased, and this positive trend will continue into the third quarter. The measures we have implemented to improve mine flexibility and ore availability are gaining traction and are delivering tangible results.

"The successful introduction of our seven-day working week in June marks another important milestone and is expected to increase production from September 2026, when we intend to start to process an additional 200 tonnes per day."

The CEO added: "With improving operating momentum, a strong gold price environment and several growth opportunities advancing across the portfolio, we remain confident in Caledonia's outlook and our ability to create long-term value for shareholders. The continued improvement in operating performance at Blanket supports our expectation of a stronger second half of 2026, in line with market expectations. "

By Holly Munks, Alliance News reporter

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