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Caledonia Mining restates output guidance but expects 2016 earnings hit

Wednesday, November 2, 2016 1:53
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Gold miner Caledonia Mining Corporation PLC (LON:CMCL, TSE:CAL)  expects to meet market expectations for revenue but not for profit for 2016, it said, outlining performance at its Blanket mine.

Average grade in October was below expectations, but this is temporary and the Zimbabwe mine is still on track to  produce 50,000 ounces of gold this year, the firm told investors.

Underlying performance is expected to be in-line and operations remain robustly cash generative, it said but EPS (earnings per share) for the year to end 2016 is expected to lower than expectations, although still significantly higher than 2015.

This is due to various factors, including the strong South African Rand against the US dollar and the increased share price since the start of 2016 meaning share-based expenses are now higher.

Caledonia reiterated that the investment programme at Blanket continues to be implemented as planned funded internally.

Blanket remains on track to increase production from 42,800 ounces of gold in 2015 to around 80,000 ounces of gold in 2021, it added.

Shares fell over 11% to 117p in early deals.

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