6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

Of the Securities Exchange Act of 1934

For the month of March, 2024

Commission File Number: 001-38164

CALEDONIA MINING CORPORATION PLC

(Translation of registrant's name into English)

B006 Millais House

Castle Quay

St Helier

Jersey JE2 3EF

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F

Form 20-F ☒  Form 40-F ☐

Exhibits 99.1 and 99.2 included with this report on Form 6-K are expressly incorporated by reference into this report and are hereby incorporated by reference as exhibits to the Registration Statement on Form F-3 of Caledonia Mining Corporation Plc (File No. 333-224784), as amended or supplemented.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CALEDONIA MINING CORPORATION PLC
	(Registrant)
Date: March 28, 2024	/s/ Mark Learmonth
	Mark Learmonth
	CEO and Director

EXHIBIT INDEX

Exhibit Number	Description
99.1	Annual Financial Statements/Report
99.2	Annual MD&A

EX-99.1

Exhibit 99.1

Caledonia Mining Corporation Plc

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL INFORMATION

To the Shareholders of Caledonia Mining Corporation Plc:

Management has prepared the information and representations in this report. The consolidated financial statements of Caledonia Mining Corporation Plc and its subsidiaries (the “Group”) have been prepared in accordance with IFRS Accounting Standards, as issued by the International Accounting Standards Board (“IFRS”) and, where appropriate, these statements include some amounts that are based on best estimates and judgment. Management has determined such amounts on a reasonable basis in order to ensure that the consolidated financial statements are presented fairly, in all material respects.

Our independent auditor has the responsibility of auditing the consolidated financial statements and expressing an opinion on these financial statements.

The accompanying Management Discussion and Analysis (“MD&A”) also includes information regarding the impact of current transactions, sources of liquidity, capital resources, operating trends, risks and uncertainties. Actual results in the future may differ materially from our present assessment of this information because future events and circumstances may not occur as expected.

The Group maintains adequate systems of internal accounting and administrative controls, within reasonable cost. Such systems are designed to provide reasonable assurance that relevant and reliable financial information are produced.

Management is responsible for establishing and maintaining adequate internal controls over financial reporting (“ICOFR”). Any system of ICOFR, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

At December 31, 2023 management evaluated the effectiveness of the Group’s ICOFR and concluded that such ICOFR was effective based on the criteria set forth in the Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organisations of the Treadway Commission.

The Board of Directors, through its Audit Committee, is responsible for ensuring that management fulfills its responsibilities for financial reporting and internal control. The Audit Committee is composed of three independent non-executive directors. This Committee meets periodically with management, the external auditor and internal auditor to review accounting, auditing, internal control and financial reporting matters.

The consolidated financial statements as at and for the year ended December 31, 2023, 2022 and 2021 have been audited by the Group’s independent auditor, BDO South Africa Incorporated. The independent auditor’s report outlines the scope of their examination and their opinion on the consolidated financial statements.

The consolidated financial statements for the year ended December 31, 2023 were approved by the Board of Directors and signed on its behalf on March 28, 2024.

(Signed) J.M. Learmonth	(Signed) C.O. Goodburn
Chief Executive Officer	Chief Financial Officer

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Caledonia Mining Corporation Plc

Tel: +27 011 488 1700
Fax: +27 010 060 7000
www.bdo.co.za Wanderers Office Park 52 Corlett Drive Illovo, 2196   Private Bag X60500
Houghton, 2041
South Africa

To the Shareholders of Caledonia Mining Corporate Plc

Opinion

We have audited the consolidated financial statements of Caledonia Mining Corporation Plc and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at December 31, 2023 and 2022, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended December 31, 2023, 2022 and 2021, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended December 31, 2023, 2022 and  2021 in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

BDO South Africa Incorporated
Registration number: 1995/002310/21
Practice number: 905526
VAT number: 4910148685

Chief Executive Officer: LD Mokoena

A full list of all company directors is available on www.bdo.co.za

The company’s principal place of business is at The Wanderers Office Park, 52 Corlett Drive, Illovo, Johannesburg where a list of directors’ names is available for inspection. BDO South Africa Incorporated, a South African personal liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

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Caledonia Mining Corporation Plc

Key audit matter

How the key audit matter was addressed in the audit

Impairment assessment of the recoverable amounts of the cash generating units of the Group (Notes 3(a)(ii) and (iii)) Management assesses its group and individual cash-generating units (CGUs) at each reporting period to determine the recoverable amount, which is then compared to the carrying amount of  non-financial assets. In accordance with IAS 36, the comparison must be done on a consolidated and at a CGU level. If the recoverable amount is lower than the carrying amount, an impairment expense should be recognised. Management have identified the following cash generating units for impairment assessment: ●         Caledonia Mining Corporation Group ●         Blanket Mine CGU Impairment indicators were identified by management at December 31, 2023 and therefore management was required to assess the recoverable amount of the CGU’s The recoverable amount of the CGU’s is determined as the higher of the CGU’s fair value less costs to sell or value in use. There is a high level of inherent uncertainty and critical judgements, and estimates applied by management in the assessment of the value in use calculation of the CGU. The estimates of future cashflows are based on financial budgets and the life of mine (“LOM”) plan, including significant judgements and assumptions related to: ●         ore reserves and mineral resources ●         forecasted gold price. ●         discount rate and

Our audit  procedures included, amongst others: ●    We evaluated management’s assessment of impairment indicators over the CGU’s; ●    We obtained and understanding of the controls in respect of the Group’s value in use calculations and the reviews thereof, including confirming that the value in use calculations have been approved by the Board; ●    We compared the trading performance against budget for FY 2023 in order to evaluate the quality of Management’s forecasting. Where underperformance against budget was highlighted, we evaluated the impact on the forecasts; ●    We assessed key inputs and assumptions used in the value in use calculation for reasonability, taking into account specifically the operating cashflow projections, ore reserves and resources, discount rate, forecasted production volumes and forecasted gold price and compared these to external sources where appropriate, taking into account our knowledge of the industry; ●    We made use of our internal valuation expertise to assess the valuation model and related key inputs and assumptions for reasonability, to assess whether the methods applied are consistent with IFRS Accounting Standards and industry norms; ●    We evaluated management’s sensitivity analysis for the value in use model and performed additional sensitivity analysis on the model where considered necessary; and

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●         production volumes and grades   There was no impairment required based on the value in use calculation of the CGU’s.   As a result of the estimation uncertainty and  judgements applied   by management   in the discounted cashflow model to calculate the value in use of the relevant CGUs, the impairment assessment was considered a matter of most significance in our current year audit of the consolidated financial statements. ●    We evaluated the adequacy of the Group’s disclosures in terms of the IFRS Accounting Standards.

Other Information

Management is responsible for the other information. The other information comprises:

● The Management’s Discussion and Analysis report of the consolidated operating results and financial position of the Group for the quarter ended December 31, 2023, which we obtained prior to the date of this report, and

● The Annual Report – referred to as Form 20-F which is expected to be made available to us after that date

Our opinion on the consolidated financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on this other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor’s report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

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Caledonia Mining Corporation Plc

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

● Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

● Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

● Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

● Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

● Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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Caledonia Mining Corporation Plc

The engagement partner on the audit resulting in this independent auditor’s report is Servaas Kranhold.

BDO South Africa Incorporated

Registered Auditors

Wanderers Office Park

52 Corlett Drive

Ilovo

2196

March 28, 2024

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Caledonia Mining Corporation Plc

Consolidated statements of profit or loss and other comprehensive income

(in thousands of United States Dollars, unless indicated otherwise)

For the years ended December 31	Note	2023			2022			2021
Revenue	8		146,314			142,082			121,329
Royalty			(7,637	)		(7,124	)		(6,083	)
Production costs	9		(82,709	)		(62,998	)		(53,126	)
Depreciation	18		(14,486	)		(10,141	)		(8,046	)
Gross profit			41,482			61,819			54,074
Other income			263			60			46
Other expenses	10		(4,367	)		(11,782	)		(7,136	)
Administrative expenses	11		(17,429	)		(11,941	)		(9,091	)
Cash-settled share-based expense	12.1		(463	)		(609	)		(477	)
Equity-settled share-based expense	12.2		(640	)		(484	)		–
Net foreign exchange (loss) gain	13		(2,550	)		4,411			1,184
Net derivative financial instrument expense	14		(1,119	)		(1,198	)		(240	)
Operating profit			15,177			40,276			38,360
Finance income	15		39			17			14
Finance cost	15		(3,024	)		(657	)		(375	)
Profit before tax			12,192			39,636			37,999
Tax expense	16		(12,810	)		(16,770	)		(14,857	)
(Loss) profit for the period			(618	)		22,866			23,142
Other comprehensive income
Items that are or may be reclassified to profit or loss
Exchange differences on translation of foreign operations			(622	)		(462	)		(531	)
Total comprehensive income for the period			(1,240	)		22,404			22,611
(Loss) profit attributable to:
Owners of the Company			(4,198	)		17,903			18,405
Non-controlling interests	28		3,580			4,963			4,737
(Loss) profit for the period			(618	)		22,866			23,142
Total comprehensive income attributable to:
Owners of the Company			(4,820	)		17,441			17,874
Non-controlling interests	28		3,580			4,963			4,737
Total comprehensive income for the period			(1,240	)		22,404			22,611
(Loss) earnings per share
Basic (loss) earnings per share ($)	27		(0.24	)		1.36			1.49
Diluted (loss) earnings per share ($)	27		(0.24	)		1.35			1.48

The accompanying notes on pages 12 to 81 are an integral part of these consolidated financial statements.

On behalf of the Board: “J.M. Learmonth”- Chief Executive Officer and “C.O. Goodburn”- Chief Financial Officer.

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Caledonia Mining Corporation Plc

Consolidated statements of financial position

(in thousands of United States Dollars, unless indicated otherwise)

As at December 31	Note	2023			2022
Assets
Exploration and evaluation assets	17		94,272			17,579
Property, plant and equipment	18		179,649			178,983
Deferred tax asset	16		153			202
Total non-current assets			274,074			196,764
Income tax receivable	16		1,120			40
Inventories	20		20,304			18,334
Derivative financial assets	14.1		88			440
Trade and other receivables	21		9,952			9,185
Prepayments	22		2,538			3,693
Cash and cash equivalents	23		6,708			6,735
Assets held for sale	24		13,519			–
Total current assets			54,229			38,427
Total assets			328,303			235,191
Equity and liabilities
Share capital	25		165,068			83,471
Reserves	26		137,819			137,801
Retained loss			(63,172	)		(50,222	)
Equity attributable to shareholders			239,715			171,050
Non-controlling interests	28		24,477			22,409
Total equity			264,192			193,459
Liabilities
Deferred tax liabilities	16		6,131			5,123
Provisions	29		10,985			2,958
Loan notes - long term portion	30		6,447			–
Cash-settled share-based payment - long term portion	12.1		374			1,029
Lease liabilities - long term portion	19		41			181
Total non-current liabilities			23,978			9,291
Cash-settled share-based payment - short term portion	12.1		920			1,188
Income tax payable	16		10			1,324
Lease liabilities - short term portion	19		167			132
Loan notes - short term portion	30		665			7,104
Trade and other payables	31		20,503			17,454
Overdraft and term loans	23		17,740			5,239
Liabilities associated with assets held for sale	24		128			–
Total current liabilities			40,133			32,441
Total liabilities			64,111			41,732
Total equity and liabilities			328,303			235,191

The accompanying notes on pages 12 to 81 are an integral part of these consolidated financial statements.

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Caledonia Mining Corporation Plc

Consolidated statements of changes in equity

For the years ended December 31,

(in thousands of United States Dollars, unless indicated otherwise)

	Note		Share capital		Foreign currency translation reserve			Contributed surplus		Equity-settled share-based payment reserve		Retained loss			Total			Non-controlling interests (NCI)			Total equity
Balance January 1, 2021				74,696		(8,794	)		132,591		14,513		(71,487	)		141,519			16,524			158,043
Transactions with owners:
Dividends declared		34		-		-			-		-		(6,068	)		(6,068	)		(2,001	)		(8,069	)
Shares issued:
- Options exercised				165		-			-		-		-			165			-			165
- Equity raise (net of transaction cost)		25		7,806		-			-		-		-			7,806			-			7,806
Total comprehensive income:
Profit for the year				-		-			-		-		18,405			18,405			4,737			23,142
Other comprehensive income for the year				-		(531	)		-		-		-			(531	)		-			(531	)
Balance December 31, 2021				82,667		(9,325	)		132,591		14,513		(59,150	)		161,296			19,260			180,556
Transactions with owners:
Dividends declared		34		-		-			-		-		(8,975	)		(8,975	)		(1,814	)		(10,789	)
Share-based payments:
- Shares issued on settlement of incentive plan awards		12.1		804		-			-		-		-			804			-			804
- Equity-settled share-based expense		12.2		-		-			-		484		-			484			-			484
Total comprehensive income:
Profit for the year				-		-			-		-		17,903			17,903			4,963			22,866
Other comprehensive income for the year				-		(462	)		-		-		-			(462	)		-			(462	)
Balance at December 31, 2022				83,471		(9,787	)		132,591		14,997		(50,222	)		171,050			22,409			193,459

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Caledonia Mining Corporation Plc

Consolidated statements of changes in equity (continued)

For the years ended December 31,

(in thousands of United States Dollars, unless indicated otherwise)

	Note		Share capital		Foreign currency translation reserve			Contributed surplus		Equity-settled share-based payment reserve		Retained loss			Total			Non-controlling interests (NCI)			Total equity
Balance December 31, 2022				83,471		(9,787	)		132,591		14,997		(50,222	)		171,050			22,409			193,459
Transactions with owners:
Dividends declared		34		-		-			-		-		(8,752	)		(8,752	)		(1,512	)		(10,264	)
Share-based payments:
- Shares issued on settlement of incentive plan awards		12.1		351		-			-		-		-			351			-			351
- Equity-settled share-based expense		12.2		-		-			-		640		-			640			-			640
Shares issued:
- Equity raise (net of transaction cost)		25		15,569		-			-		-		-			15,569			-			15,569
- Bilboes acquisition		5		65,677		-			-		-		-			65,677			-			65,677
Total comprehensive income:
(Loss) profit for the year				-		-			-		-		(4,198	)		(4,198	)		3,580			(618	)
Other comprehensive income for the year				-		(622	)		-		-		-			(622	)		-			(622	)
Balance at December 31, 2023				165,068		(10,409	)		132,591		15,637		(63,172	)		239,715			24,477			264,192
	Note			25		26			26		26								28

The accompanying notes on pages 12 to 81 are an integral part of these consolidated financial statements.

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Caledonia Mining Corporation Plc

Consolidated statements of cash flows

For the years ended December 31,

(in thousands of United States Dollars, unless indicated otherwise)

	Note	2023			2022			2021
Cash inflow from operations	32		26,398			49,657			38,703
Interest received			39			17			14
Finance costs paid	15		(2,462	)		(192	)		(388	)
Tax paid	16		(9,206	)		(6,866	)		(7,426	)
Net cash inflow from operating activities			14,769			42,616			30,903
Cash flows used in investing activities
Acquisition of property, plant and equipment	18		(28,556	)		(41,495	)		(32,112	)
Acquisition of exploration and evaluation assets	17		(1,837	)		(2,596	)		(5,717	)
Proceeds from sale of assets held for sale	24.1		–			–			500
Proceeds from derivative financial instruments	14.2		178			–			1,066
Acquisition of Put options	14.1		(946	)		(478	)		–
Proceeds from disposal of subsidiary	24.2		–			–			340
Proceeds from call options	14.2		–			416			208
Acquisition of call options	14.2		–			(176	)		–
Net cash used in investing activities			(31,161	)		(44,329	)		(35,715	)
Cash flows from financing activities
Dividends paid	34		(11,099	)		(8,906	)		(8,069	)
Payment of lease liabilities	19		(184	)		(150	)		(129	)
Shares issued – equity raise (net of transaction cost)	25		15,569			–			7,806
Repayments of term loans			–			–			(361	)
Loan notes - Motapa payment	30.1		(7,250	)		–			–
Loan notes - solar bond issue receipts (net of transaction cost)	30.2		6,895			–			–
Proceeds from gold loan	14.2		–			–			2,752
Repayment of gold loan	14.2		–			(3,698	)		–
Proceeds from share options exercised	25		–			–			165
Net cash from/ (used in) financing activities			3,931			(12,754	)		2,164
Net decrease in cash and cash equivalents			(12,461	)		(14,467	)		(2,648	)
Effect of exchange rate fluctuations on cash and cash equivalents			(67	)		(302	)		(179	)
Net cash and cash equivalents at the beginning of the year			1,496			16,265			19,092
Net cash and cash equivalents at the end of the year	23		(11,032	)		1,496			16,265

The accompanying notes on pages 12 to 81 are an integral part of these consolidated financial statements.

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

1 Reporting entity

Caledonia Mining Corporation Plc (“Caledonia” or the “Company”) is a company domiciled in Jersey, Channel Islands. The Company’s registered office address is B006 Millais House, Castle Quay, St Helier, Jersey, Channel Islands.

These consolidated financial statements of the Company and its subsidiaries (the “Group”) comprise the consolidated statements of financial position as at December 31, 2023 and 2022, the consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for each of the years ended December 31, 2023, 2022 and 2021, disclosure notes, material accounting policies and other explanatory information.  The Group’s primary involvement is in the operation of a gold mine and the exploration and development of mineral properties for precious metals.

Caledonia’s shares are listed on the NYSE American LLC stock exchange (symbol – “CMCL”).  Depository interests in Caledonia’s shares are admitted to trading on AIM of the London Stock Exchange plc (symbol – “CMCL”).  Caledonia listed on the Victoria Falls Stock Exchange (“VFEX”) (symbol – “CMCL”) on December 2, 2021.  Caledonia voluntary delisted from the Toronto Stock Exchange (the “TSX”) on June 19, 2020. After the delisting the Company remains a Canadian reporting issuer and has to comply with Canadian securities laws until it demonstrates that Canadian shareholders represent less than 2% of issued share capital.

2  Basis of preparation

i) Statement of compliance

The consolidated financial statements have been prepared on a going concern basis, in accordance with IFRS Accounting Standards, as issued by the International Accounting Standards Board (“IFRS”).

The consolidated financial statements were approved for issue by the Board of Directors on March 28, 2024.

ii) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for:

● cash-settled share-based payment arrangements measured at fair value on grant and re-measurement dates;

● equity-settled share-based payment arrangements measured at fair value on the grant date; and

● derivative financial assets and derivative financial liabilities measured at fair value.

iii) Functional currency

The consolidated financial statements are presented in United States Dollars (“$” or “US Dollars” or “USD”), which is also the functional currency of the Company. All financial information presented in US Dollars has been rounded to the nearest thousand, unless indicated otherwise. Refer to note 13 for changes to Zimbabwean real-time gross settlement, bond notes or bond coins (“RTGS$”) and its effect on the consolidated statement of profit or loss and other comprehensive income.

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

3 Use of accounting assumptions, estimates and judgements

In preparing these consolidated financial statements, management has made accounting assumptions, estimates and judgements that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Changes in estimates are recognised prospectively.

(a)  Estimation uncertainties

i) Depreciation of property, plant and equipment

Depreciation on mine development, infrastructure and other assets in the production phase is computed on the units-of-production method over the life-of-mine based on the estimated quantities of reserves (proven and probable) and resources (measured, indicated and inferred), which are planned to be extracted in the future from known mineral deposits. Where mine development, infrastructure and other assets have a shorter useful life than the life-of-mine, they are depreciated over their useful life. Confidence in the existence, commercial viability and economical recovery of reserves and resources included in the life-of-mine may be based on historical experience and available geological information. This is in addition to the drilling results obtained by the Group and management’s knowledge of the geological setting of the surrounding areas, which would enable simulations and extrapolations to be done with a sufficient degree of accuracy. In instances where management is able to demonstrate the economic recovery of resources with a high level of confidence, such additional resources, are included in the calculation of depreciation.

Refer to note 18 for change in estimates to mine development, infrastructure and other assets.  Other items of property, plant and equipment are depreciated as described in note 4(j)(iii).

ii) Mineral reserves and resources

Mineral reserves and resources are estimates of the amount of product that can be economically and legally extracted. In order to calculate the reserves and resources, estimates and assumptions are required about a range of geological, technical and economic factors, including but not limited to quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity prices and exchange rates. Estimating the quantity and grade of mineral reserves and resources requires the size, shape and depth of orebodies to be determined by analysing geological data such as the logging and assaying of drill samples. This process may require complex and difficult geological assumptions and calculations to interpret the data. Estimates of mineral reserves and resources may change due to the change in economic assumptions used to estimate mineral reserves and resources and due to additional geological data becoming available during the course of operations.

The Group estimates its reserves (proven and probable) and resources (measured, indicated and inferred) based on information compiled by a Qualified Person in terms of the Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and the United States Securities and Exchange Commission’s Subpart 1300 of Regulation S-K (“Subpart 1300”) relating to geological and technical data of the size, depth, shape and grade of the ore body and suitable production techniques and recovery rates. Such an analysis requires geological and engineering assumptions to interpret the data. These assumptions include:

● correlation between drill-hole intersections where multiple reefs intersect;

● continuity of mineralisation between drill-hole intersections within recognised reefs; and

● appropriateness of the planned mining methods.

13

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

3 Use of accounting assumptions, estimates and judgements (continued)

(a) Assumptions and estimation uncertainties (continued)

ii) Mineral reserves and resources (continued)

The Group estimates and reports reserves and resources in accordance with Subpart 1300 and NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) – CIM Definition Standards for Mineral Resources and Mineral Reserves. Complying with the CIM code, NI 43-101 requires the use of reasonable assumptions to calculate the recoverable resources. These assumptions include:

● the gold price based on current market price and the Group’s assessment of future prices;

● estimated future on-mine costs, sustaining and non-sustaining capital expenditures;

● cut-off grade;

● dimensions and extent, determined both from drilling and mine development, of ore bodies; and

● planned future production from measured, indicated and inferred resources.

Changes in reported reserves and resources may affect the Group’s financial results and position in several ways, including the following:

● asset carrying values may be affected due to changes in the estimated cash flows (i.e. Impairment);

● depreciation and amortisation charges to profit or loss may change as these are calculated on the unit-of production method or where useful lives of an asset change; and

● decommissioning, site restoration and environmental provisions and resources which may affect expectations about the timing or cost of these activities.

iii) Impairment

Non-financial assets

At each reporting date, the Group determines if impairment indicators exist and, if present, performs an impairment review of the non-financial assets held in the Group. The exercise is subject to various assumptions and estimates. Refer to note 4(c) for more information.

Non-derivative financial assets

The Group uses a simplified approach in accounting for trade receivables and records the loss allowance as lifetime expected credit losses. When measuring expected credit losses, the Group uses reasonable and supportable forward-looking information, which is based on the assumptions for the future movement of different economic drivers and how these drivers will affect each other. Loss given default is an estimate of the loss arising on default. It is based on the expected shortfalls in contractual cash flows. The Group uses a provision matrix to calculate the probability of default, which includes historical data, assumptions and expectations of future conditions.

14

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

3 Use of accounting assumptions, estimates and judgements (continued)

(a) Assumptions and estimation uncertainties (continued)

iv) Share-based payment transactions

Equity-settled share-based payment arrangements

The Group measures the cost of equity-settled share-based payment transactions with employees, directors and Blanket Mine (1983) (Private) Limited’s (“Blanket Mine” or “Blanket”) indigenous shareholders (refer to note 6) by reference to the fair value of the equity instruments on the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the appropriate valuation model and considering the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model, including the expected life of the share option, volatility and dividend yield.

Where the Company granted the counterparty to a share-based payment award the choice of settlement in cash or shares, the equity component is measured as the difference between the fair value of the goods and services and the fair value of the cash-settled share-based payment liability at the date when the goods and services are received at the measurement date. For transactions with employees, the equity component is zero.

Option pricing models require the input of assumptions, including the expected price volatility. Changes in the subjective input assumptions can materially affect the fair value estimate.  Therefore, the existing models may not necessarily provide a reliable single measure of the fair value of the Group’s share options.

Additional information about significant assumptions and estimates used to determine the fair value of equity-settled share-based payment transactions are disclosed in note 12.2.

Cash-settled share-based payment arrangements

The fair value of the amount payable to employees regarding share-based awards that will be settled in cash is recognised as an expense with a corresponding increase in liabilities over the period over which the employee becomes unconditionally entitled to payment. The liability is re-measured at each reporting date. Any change in the fair value of the liability is recognised in profit or loss.

Additional information about significant assumptions and estimates used to determine the fair value of cash-settled share-based payment transactions are disclosed in note 12.1.

v) Taxes

Significant assumptions and estimates are required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain.

In 2023, the Zimbabwe Revenue Authority (“ZIMRA”) issued Public Notice 20 (“PN20”). PN 20 provided clarity on the interpretation of Section 37AA of the Income Tax Act [Chapter 23:06] of Zimbabwe, which requires taxpayers to submit separate tax returns where any part of the income from trade or investment is earned in foreign currency. 

Section 37AA stated that the calculation of taxable income be expressed in the currency of the transaction and that the payment of the tax payable be made proportionately to in which currency the revenue earned. The section further provides that the RTGS$ should be converted to US$ using the average auction rate of exchange for the year of assessment, with the same being applicable to US$ amounts that need to be converted to RTGS$.

15

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

3 Use of accounting assumptions, estimates and judgements (continued)

(a) Assumptions and estimation uncertainties (continued)

v) Taxes (continued)

Management believes they have adequately provided for the probable outcome of tax related matters; however, the final outcome or future outcomes anticipated in calculating the tax liabilities may result in a materially different outcome than the amount included in the tax liabilities. In addition, the Group further makes assumptions and estimates when recognising deferred tax assets relating to tax losses carried forward to the extent that there are sufficient future taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same taxable entity against which the unused tax losses may be utilised or sufficient estimated future taxable income against which the losses can be utilised.

vi) Blanket Mine’s indigenisation transaction

The initial indigenisation transaction and modifications to the indigenisation transaction of Blanket Mine required management to make significant assumptions and estimates which are explained in note 6.

vii) Exploration and evaluation (“E&E”) assets

The Group also makes assumptions and estimates regarding the technical feasibility and commercial viability of its mineral projects and the possible impairment of E&E assets by evaluating whether it is likely that future economic benefits will flow to the Group, which may be based on assumptions about future events or circumstances e.g. such as the completion of a feasibility study indicating construction, funding and economic returns that are sufficient. Assumptions and estimates made may change if new information becomes available. If information becomes available suggesting that the recovery of expenditures is unlikely, the amount capitalised is written off in profit or loss in the period the new information becomes available. The recoverability of the carrying amount of exploration and evaluation assets depends on the availability of sufficient funding to bring the properties into commercial production, the price of the products to be recovered and the undertaking of profitable mining operations. As a result of these uncertainties, the actual amount recovered may vary significantly from the carrying amount.

viii) Site restoration provision

A site restoration provision has been calculated for the Blanket Mine and the Bilboes, Maligreen and Motapa projects based on an independent analysis of the rehabilitation costs as performed in 2023. For projects the restoration costs are recognised at the current estimated cost of restoration and is undiscounted. For the Blanket Mine the inflationary effect on current restoration costs are applied and then discounted to arrive at the present value of the provision. Assumptions, based on the current economic environment, have been made that management believes are a reasonable basis for estimating the future liability. These estimates take into account any material changes to the assumptions that occur when reviewed by management. Estimates are reviewed annually and are based on current regulatory requirements. Significant changes in estimates of contamination estimates, restoration standards, and techniques will result in changes to the provision from period to period. Actual rehabilitation costs will ultimately depend on future market prices for the rehabilitation. The final cost of the currently recognised site rehabilitation provision may be higher or lower than currently provided for (refer to note 29).

16

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

3 Use of accounting assumptions, estimates and judgements (continued)

(a) Assumptions and estimation uncertainties (continued)

viii) Site restoration provision (continued)

Also refer to note 29 for how site restoration provisions are estimated for properties in the exploration and evaluation phase.

(b) Judgements

Judgement is required when assessing whether the Group controls an entity or not. Controlled entities are consolidated. Further information is given in notes 4(a) and 6.

For judgement applied to:

● determine functional currency of entities in the Group and the use of the interbank rate of exchange to translate RTGS$, refer to note 13,

● impairments, refer to note 18 and 17.

4 Material accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.  In addition, the accounting policies have been applied consistently by the Group.

a) Basis of consolidation

i)  Subsidiaries and structured entities

Subsidiaries and certain structured entities are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variability in returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

ii)  Loss of control

When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related Non-controlling interests (“NCI”) and other components of equity. Any gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

iii) Non-controlling interests

NCI is measured at their proportionate share of the carrying amounts of the acquiree’s identifiable net assets at fair value at the acquisition date. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

iv) Transactions eliminated on consolidation

Intra-group balances and transactions arising from intra-group transactions are eliminated.

17

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

4 Material accounting policies (continued)

(b) Revenue

i) Fidelity Gold Refinery (Private) Limited (“Fidelity”) and further refinement

Revenue from the sale of precious metals at Blanket is recognised when the unrefined metal is accepted at the refinery (“Local lodgment date”) by Fidelity, except for the portion earmarked for export to a refiner outside of Zimbabwe. Control is transferred and the receipt of proceeds is substantially assured at point of delivery at the end refiner with the responsibility to pay. Revenue for each delivery to Fidelity is measured at the London Base Metal Association price post-delivery less 1.25% and the quantities are determined on Local lodgment date. On average, settlement occurs within 14 days of delivery from Fidelity and within 2 days from Al Etihad Gold Refinery DMCC.

A portion of unrefined metals produced by Blanket is exported by Caledonia to Al Etihad Gold Refinery DMCC (“AEG” an accredited Dubai Good Delivery refinery), which makes payment to Caledonia's bank account in Zimbabwe in USD. The exported unrefined gold continues to be processed at Fidelity, a subsidiary of the Reserve Bank of Zimbabwe (“RBZ”), on a toll-treatment basis, in accordance with requirements of the Zimbabwe government for in-country refining and to allow the Zimbabwe authorities full visibility over the gold produced and exported by Caledonia. The resultant gold is exported under the gold dealing licence that is held by Fidelity to a refinery outside Zimbabwe which undertakes the final refining process. Caledonia receives the proceeds of the gold that it exports in its bank account in Zimbabwe within a few days of delivery to the final refiner. This arrangement in respect of production from Blanket complies with the current requirements to pay a 5% royalty on gold sales and 1.25% of gross sales which is payable to the Zimbabwean Government and deducted from USD and RTGS$ revenues proportionately.

For deliveries exported and for deliveries that are paid by Fidelity, Blanket continues to receive 75% of its revenues in US Dollars and the balance in local currency. Revenue for the unrefined metals exported to a refiner outside Zimbabwe from the sale of precious metals is recognised when the refiner outside of Zimbabwe receives the unrefined metals (“Export lodgment date”). Control is transferred and the receipt of proceeds is substantially assured at the point of delivery. Export lodgment date revenue for each delivery is measured at the London Base Metal Association price post-delivery less a refining fee and the quantities are determined on Export lodgment date. On average settlement occurs within two days of delivery.

Revenue from the sale of precious metals at Bilboes is recognised when the unrefined metal is accepted at the refinery (“Local lodgment date”) by Fidelity. Control is transferred and the receipt of proceeds is substantially assured at point of delivery at the end refiner with the responsibility to pay. Revenue for each delivery to Fidelity is measured at the London Base Metal Association price post-delivery less 1.25% and the quantities are determined on Local lodgment date. Part of the Bilboes revenue during the year was recognised from sales to Fidelity as a “small-scale producer”, measured at the previous day’s 6pm London Base Metal Association price less a 5% discount. The revenue was received 100% in USD and settlement occurred immediately after depositing of the bullion.

18

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

4 Material accounting policies (continued)

(c) Impairment

i) Expected credit losses on financial assets

The Group applies the IFRS 9 simplified model and recognises lifetime expected credit losses for all trade receivables as these items do not have a significant financing component. In measuring the expected credit losses, the trade receivables have been assessed individually as they possess different credit risk characteristics. Trade receivables have been assessed based on the days past due. The expected loss rates are based on the payment profile for gold sales over the past 48 months prior to December 31, of each year reported. The historical rates are adjusted to reflect current and forward looking macroeconomic factors i.e. (interest rate, country risk, and risk free rate) affecting the customer’s ability to settle the amount outstanding. The Group considers a trade receivable to be in default when the amount is 90 days past due from lodgment date. Failure to make payments within 90 days from lodgment date and failure to engage with the Group on alternative payment arrangement, amongst others, are considered indicators of no reasonable expectation of recovery. Trade and other receivables are written off (i.e. derecognised) when there is no reasonable expectation of recovery.

ii) Non-financial assets

The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit” or “CGU”). The Group’s corporate assets do not generate separate cash inflows. If there is an indication that a CGU to which a corporate asset is allocated may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs.

An impairment loss is recognised if the carrying amount of a CGU exceeds its estimated recoverable amount. Impairment losses recognised in respect of CGUs are allocated to reduce the carrying amount of assets in the unit (group of units) on a pro rata basis. Impairment losses recognised in prior years are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been an indication of reversal and a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

19

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

4 Material accounting policies (continued)

(c) Impairment (continued)

iii) Impairment of Exploration and evaluation (“E&E”) assets

The test for impairment of E&E assets can combine several CGUs as long as the combination is not larger than a segment. The definition of a CGU does, however, change once development activities have begun. There are specific impairment triggers for E&E assets. Despite certain relief in respect of impairment triggers and the level of aggregation, the impairment standard is applied in measuring the impairment of E&E assets. Reversals of impairment losses are required in the event that the circumstances that resulted in impairment have changed.

E&E assets are assessed for impairment only when facts and circumstances suggest that the carrying amount of an E&E asset may exceed its recoverable amount. Indicators of impairment include the following:

● The entity's right to explore in the specific area has expired or will expire in the near future and is not expected to be renewed.

● Substantive expenditure on further E&E activities in the specific area is neither budgeted nor planned in future.

● The entity has not discovered commercially viable quantities of mineral resources as a result of E&E activities in the area to date and has decided to discontinue such activities in the specific area.

● Even if development is likely to proceed, the entity has sufficient data indicating that the carrying amount of the asset is unlikely to be recovered in full from successful development or by sale.

(d) Share-based payment transactions

i) Equity-settled share-based payments to employees and directors

The grant date fair value of equity-settled share-based payment awards granted to employees and directors is recognised as an expense, with a corresponding increase in equity, over the vesting period of the award. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market vesting conditions at the vesting date.

Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in profit or loss.

Additional information about significant judgements, estimates and the assumptions used to estimate the fair value of equity-settled share-based payment transactions are disclosed in note 12.2.

ii) Cash-settled share-based payments to employees and directors

The grant date fair value of cash-settled awards granted to employees and directors is recognised as an expense, with a corresponding increase in the liability, over the vesting period of the awards. At each reporting date the fair value of the awards is re-measured with a corresponding adjustment to profit or loss. Additional information about significant judgements, estimates and the assumptions used to estimate the fair value of cash-settled share-based payment transactions are disclosed in note 12.1.

20

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

4 Material accounting policies (continued)

(e) Foreign currency

i) Foreign operations

As stated in note 2(iii) the presentation currency of the Group is the US Dollars. The functional currency of the Company and all its subsidiaries is the US Dollars except for the South African subsidiary that uses the South African Rand (“ZAR”) as its functional currency. Subsidiary financial statements have been translated to the presentation currency as follows:

● assets and liabilities are translated using the exchange rate at year end; and

● income, expenses and cash flow items are translated using the rate that approximates the exchange rates at the dates of the transactions.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from the item are considered to form part of the net investment in a foreign operation and are recognised in Other Comprehensive Income (“OCI”).

If settlement is planned or likely in the foreseeable future, foreign exchange gains and losses are included in profit or loss. When settlement occurs, the settlement will not be regarded as a partial disposal and accordingly the foreign exchange gain or loss previously recognised in OCI is not reclassified to profit or loss/reallocated to NCI.

When the Group disposes of its entire interest in a foreign operation or loses control over a foreign operation, the foreign currency gains or losses accumulated in OCI related to the foreign operation are reclassified to profit or loss. If the Group disposes of part of an interest in a foreign operation which remains a subsidiary, a proportionate amount of foreign currency gains or losses accumulated in OCI related to the subsidiary are reattributed between controlling and non-controlling interests.

All resulting translation differences are reported in OCI and accumulated in the foreign currency translation reserve.

ii) Foreign currency translation

In preparing the financial statements of the Group entities, transactions in currencies other than the functional currency (foreign currencies) of these Group entities are recorded at the rates of exchange prevailing at the dates of the transactions.  At each reporting date, monetary assets and liabilities are translated using the current foreign exchange rate.  Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction.  All gains and losses on translation of these foreign currency transactions are included in profit or loss for the year.

On October 1, 2018 the Reserve Bank of Zimbabwe (“RBZ) pegged the Zimbabwe dollar (“RTGS$”) at 1:1 to the US Dollar and on February 20, 2019 issued a further monetary policy statement, which allowed inter-bank trading between RTGS$ and foreign currency. The interbank rate was introduced at 2.5 RTGS$ to 1 US Dollar and traded at RTGS$ 6,104.72 (2022: RTGS$ 684.33, 2021: RTGS$ 108.67) to 1 US Dollar as at December 31, 2023.

21

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

4 Material accounting policies (continued)

(e) Foreign currency (continued)

ii) Foreign currency translation (continued)

Further, the RBZ issued a directive to Zimbabwean banks to separate foreign currency and RTGS$ for bank accounts held by clients on October 1, 2018. Subsequent to the directive, the RBZ announced that 30% of Blanket Mine’s gold proceeds will be received in foreign currency (i.e., US Dollars) and the remainder received as RTGS$. From November 12, 2018 the RBZ increased the foreign currency allocation from 30% to 55%, with the remainder received as RTGS$. The RBZ increased the foreign currency allocation with effect from May 26, 2020 from 55% to 70% and decreased the foreign currency allocation with effect from January 8, 2021 from 70% to 60% with the remainder received as RTGS$. On February 3, 2023 the RBZ increased the foreign currency allocation from 60% to 75%. The allocation percentages remained in effect up to the date of approval of these financial statements.  The Company participated in the foreign currency auction introduced by the Zimbabwean Government to exchange RTGS$ for US Dollars up to June 15, 2021.

In June 2021 the RBZ announced that companies that are listed on the VFEX will receive 100% of the revenue arising from incremental production in US Dollars. Blanket has subsequently received confirmation that the “baseline” level of production for the purposes of calculating incremental production is 148.38 Kg per month (approximately 57,000 ounces per annum). The payment of the increased US Dollars proceeds for incremental production was applied from July 1, 2021 and Blanket has received all amounts due in terms of this revised policy up to the date of approval of these financial statements. The arrangement to allow an additional allowance for VFEX listed companies resulted in allocation of approximately 72.74% and was replaced on February 3, 2023 by the 75%:25% allocation for revenues earned.

In applying IAS 21, management determined that the US Dollars remained the primary currency in which the Group’s Zimbabwean entities operate, as:

● the majority of revenue is received in US Dollars;

● the gold price receivable was calculated in US Dollars;

● the majority of costs are calculated by reference to the US Dollars if denominated in RTGS$ or is paid in US Dollars; and

● Income tax liabilities calculated in RTGS$ are settled predominantly in US Dollars.

The application of IAS 21, the advent of Statutory Instrument 142 (issued by Zimbabwean Government) and the devaluation of the RTGS$ against the US Dollars had an impact on the US Dollars value of RTGS$ denominated monetary assets and liabilities such as income and deferred tax liabilities, loans and borrowings, trade and other payables and to a lesser extent monetary asset such as cash held in RTGS$.

(f) Finance income and finance cost

Finance income comprises interest income on funds invested. Finance income is recognised as it accrues in profit or loss, using the effective interest method. Finance cost comprise interest expense on the rehabilitation provisions, interest on bank overdraft balances, effective interest on leases, loans and borrowings and also includes commitment costs on overdraft facilities. Finance cost is recognised in profit or loss using the effective interest rate method and excludes borrowing costs capitalised.

22

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

4 Material accounting policies (continued)

(g) Borrowing costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.

Other borrowing costs are expensed in the period in which they are incurred and recognised as finance cost.

(h) Taxes

i) Income tax

Tax expense comprises current and deferred tax. These expenses are recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.

ii) Current tax

Current tax is the tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date. Current tax includes withholding tax on management fees and dividends paid between companies within the Group.

iii) Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future.

Deferred tax is a monetary item measured at the tax rates and in the currency that are expected to be applied when temporary differences reverse. The tax and exchange rates are based on the laws that have been enacted, substantively enacted or the interbank exchange rates that prevail at the reporting date.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

23

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

4 Material accounting policies (continued)

(i) Earnings per share

The Group presents basic and diluted earnings per share (“EPS”) data for its shares. Basic EPS is calculated by dividing the adjusted profit or loss attributable to shareholders of the Group (see note 27) by the weighted average number of shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to shareholders and the weighted average number of shares outstanding, adjusted for own shares held, for the effects of all dilutive potential shares, which comprise share options granted to employees and directors.

(j) Property, plant and equipment

i) Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, borrowing costs on qualifying assets, the costs of dismantling and removing the items and restoring the site on which they are located. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised in profit or loss.  Refer to note 4(c)(ii) for the impairment of non-financial assets.

ii) Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

iii) Depreciation

Depreciation is calculated to write off the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. When the asset is ready for use in the manner intended by management, depreciation of mine development, infrastructure and other assets is calculated on the unit-of-production method using the measured, indicated and estimated economical inferred mineral resources in Blanket’s life-of-mine plan (“LoMP”). Resources that are not included in the LoMP are not included in the calculation of depreciation.

For other categories, depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

Mineral resources and reserves categorised and reported in compliance with the definitions embodied in the CIM Definition Standards as incorporated into the NI 43-101 are reported inclusive of mineral reserves. Mineral resources and reserves categorised and reported in compliance with Subpart 1300 are reported exclusive of mineral reserves.

Inferred mineral resources are considered in the LoMP to the extent these mineral resources are above the cut-off, economically viable and of sufficient confidence, are expected to be upgraded and form part of eventual extraction and as a result are included in the calculation of depreciation.  Refer to note 18 for the evaluation of the cut-off.

24

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

4 Material accounting policies (continued)

(j) Property, plant and equipment (continued)

iii) Depreciation (continued)

Mineral resources are sub-divided, in order of increasing geological confidence, into inferred, indicated and measured categories. An inferred mineral resource has a lower level of confidence than that applied to an indicated mineral resource. An indicated mineral resource has a higher level of confidence than an inferred mineral resource but has a lower level of confidence than a measured mineral resource.

Mineral resources in the measured and indicated mineral resource classifications have been converted into proven and probable mineral reserves respectively, by applying the applicable modifying factors and reasonable prospects of economic extraction.

Land is not depreciated.

The calculation of the production rate units could be affected to the extent that actual production in the future is different from the current forecast production. This would generally result from the extent to which there are significant changes in any of the factors or assumptions used in estimating mineral reserves and resources.

These factors include:

● changes in mineral reserves and resources;

● differences between actual commodity prices and commodity price assumptions;

● unforeseen operational issues at mine sites; and

● changes in capital, operating, mining, processing and reclamation costs, discount rates and foreign exchange rates.

The estimated useful lives for 2023, 2022 and 2021 are as follows:

● buildings 10 to 15 years;

● plant and equipment 5 to 10 years;

● fixtures and fittings including computers 4 to 10 years;

● motor vehicles 4 years;

● right of use assets 3 to 6 years (determined by lease term); and

● mine development, infrastructure and other assets in production, units-of-production method.

Depreciation methods, useful lives and residual values are reviewed each financial year and adjusted if appropriate. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Assets under construction’s useful life and residual values will be assessed once the asset is available for use.  Refer to note 18 for the change in estimate in plant and equipment.

(k) Exploration and evaluation assets

Qualifying exploration costs are capitalised as incurred.  Costs incurred before the legal rights to explore are obtained are recognised in profit or loss.  The costs related to speculative drilling on unestablished orebodies at the Blanket Mine, general administrative or overhead costs are expensed as incurred. Exploration and evaluation costs capitalised are disclosed under Exploration and evaluation assets. Qualifying direct expenditures include such costs as mineral rights, options to acquire mineral rights, materials used, surveying costs, drilling costs, payments made to contractors, direct administrative costs and depreciation on property, plant and equipment during the exploration phase.

25

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

4 Material accounting policies (continued)

(k) Exploration and evaluation assets (continued)

Costs not directly attributable to exploration and evaluation activities, including general administrative overhead costs, are expensed in the year they occur.

Once the technical feasibility and commercial viability of extracting the mineral resource have been determined, the property is considered to be a mine under development and moved to the mine development, infrastructure and other asset category within property, plant and equipment. Capitalised direct costs related to the acquisition, exploration and development of mineral properties remain capitalised, at their initial cost, until the properties to which they relate are ready for their intended use, sold, abandoned or management has determined there to be impairment. Exploration and evaluation assets are tested for impairment at least annually, and before the assets are transferred to mine development, infrastructure and other assets or when an indicator of impairment is identified.

Exploration and evaluations assets are not depreciated.

(l) Inventories

Consumable stores are measured at the lower of cost and net realisable value. The cost of consumable stores is based on the weighted average cost principle. It includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. Gold in process is measured at the lower of cost and net realisable value. The cost of gold in process includes an appropriate share of production overheads based on normal operating capacity and is valued on the weighted average cost principle. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(m) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less. Bank overdrafts are repayable on demand and form an integral part of the Group’s cash management process. The bank overdraft is included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

(n) Assets and liabilities associated with assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held for sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use.

Such assets, or disposal groups, are generally measured at the lower of their carrying amount or fair value less costs to sell. Impairment losses on initial classification as held for sale or held for distribution and subsequent gains and losses on remeasurement are recognised in profit or loss.

Once classified as held for sale property, plant and equipment are no longer depreciated.

26

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

4 Material accounting policies (continued)

(o) Financial instruments

i) Financial assets

The Group had the following financial assets:

Financial assets at amortised cost

Financial assets at amortised cost comprise trade receivables. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method, less any impairment losses.  A trade receivable without a significant financing component is initially measured at the transaction price. Refer to note 4(c)(i) for the impairment of receivables.

Fair value through profit or loss

This category comprises the Gold ETF, gold hedge and Put options. These instruments are carried at fair value with changes in fair value recognised in profit or loss as fair value losses on derivative financial instruments.  Transaction costs are recognised in profit or loss immediately when incurred. The Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.  Estimations made and further information is referred to in note 14.

ii) Financial liabilities

The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired.

Fair value through profit or loss

Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value. This category comprises the Gold loan, Put options and the Call options. Estimations made and further information is in note 14.  All changes in the fair value of derivative instruments are accounted for in profit or loss and all proceeds and acquisitions are classified under investing activities in the consolidated cashflow statement.

Financial liabilities at amortised cost

Non-derivative financial liabilities are recognised initially on the date at which the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

Non-derivative financial liabilities consist of bank overdrafts, loans and borrowings and trade and other payables.

Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method.

Offsetting

Financial assets and liabilities are offset and the net amount is presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

27

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

4 Material accounting policies (continued)

(p) Share capital

Share capital is classified as equity. Incremental costs directly attributable to the issue, consolidation and repurchase of fractional items of shares and share options are recognised as a deduction from equity, net of any tax effects.

(q) Provisions

A provision is a liability of uncertain timing and amount.  A liability is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability if the time value of money is considered significant. The unwinding of the discount is recognised as a finance cost.

(r) Site restoration

The Group recognises liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of property, plant and equipment and exploration and evaluation assets, when those obligations result from the acquisition, construction, development or normal operation of these assets. Production phase restoration costs are recognised at the net present value of future rehabilitation cost estimates arising from the decommissioning of plant and other site preparation work is capitalised to mineral properties along with a corresponding increase in the rehabilitation provision in the period incurred. Future rehabilitation costs are discounted using a pre-tax risk-free rate that reflects the time-value of money. For assets in the exploration and the evaluation phase the restoration costs are recognised at the undiscounted current cost. The Group’s estimates of rehabilitation costs, which are reviewed annually, could change as a result of changes in regulatory requirements, discount rates, effects of inflation and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to mineral properties with a corresponding entry to the rehabilitation provision. The periodic unwinding of the discount shall be recognised in the profit or loss as a finance costs.

(s) Leases

The Group recognises a right of use asset and a lease liability at the lease commencement date. The right of use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right of use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right of use asset reflects that the Group will exercise a purchase option. In that case the right of use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as property, plant and equipment. Also, the right of use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

28

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

4 Material accounting policies (continued)

(s) Leases (continued)

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

Lease payments included in the measurement of the lease liability comprise the following:

● fixed payments, including in-substance fixed payments;

● amounts expected to be payable under a residual value guarantee; and

● the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if the lease agreement changes in substance in terms of payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right of use asset or is recorded in profit or loss if the carrying amount of the right of use asset has been reduced to zero.

The Group presents the right of use assets as property, plant and equipment.  Lease liabilities are presented separately in the statement of financial position as current- and non-current lease liabilities.

The Group has elected not to recognise the right of use assets and lease liabilities for leases of low-value assets and short-term leases, including IT equipment.

29

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

4 Material accounting policies (continued)

(t) Employee benefits

i) Short-term employee benefits

Short-term employee benefits are expensed when the related services are provided. A liability is recognised for the amount expected to be paid, in respect of salaries, annual leave, bonusses and severance packages, if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

ii) Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution plan that are due more than 12 months after the end of the period in which the employees render the service are discounted to their present value.

30

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

4 Material accounting policies (continued)

(u) Standards issued but not yet effective

The following standards, amendments to standards and interpretations to existing standards may possibly have an impact on the Group:

Standard/ Interpretation		Effective date and expected adoption date*
Classification of Liabilities as Current or Non-current – Amendments to IAS 1 Non-current Liabilities with Covenants – Amendments to IAS 1	Amendments made to IAS 1 Presentation of Financial Statements in 2020 and 2022 aim to clarify the requirement on determining whether liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected by the entity’s expectations or events after the reporting date (e.g. the receipt of a waiver or a breach of covenant). Covenants of loan arrangements will not affect classification of a liability as current or non-current at the reporting date if the entity must only comply with the covenants after the reporting date. However, if the entity must comply with a covenant either before or at the reporting date, this will affect the classification as current or non-current even if the covenant is only tested for compliance after the reporting date. The amendments require disclosures if an entity classifies a liability as non-current and that liability is subject to covenants that the entity must comply with within 12 months of the reporting date. The disclosures include: ●     the carrying amount of the liability, ●     information about the covenants, and ●     facts and circumstances, if any, that indicate that the entity may have difficulty complying with the covenants. The amendments also clarify what IAS 1 means when it refers to the ‘settlement’ of a liability. Terms of a liability that could, at the option of the counterparty, result in its settlement by the transfer of the entity’s own equity instrument can only be ignored for the purpose of classifying the liability as current or non-current if the entity classifies the option as an equity instrument. However, conversion options that are classified as a liability must be considered when determining the current/non-current classification of a convertible note. The amendments must be applied retrospectively in accordance with the normal requirements in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Special transitional rules apply if an entity had early adopted the 2020 amendments regarding the classification of liabilities as current or non-current. The Group has completed its assessment of the impact of the above standards and concluded that the standard amendments would not have a material impact on the consolidated financial statements.	January 1, 2024

31

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

4 Material accounting policies (continued)

(u) Standards issued but not yet effective (continued)

The following standards, amendments to standards and interpretations to existing standards may possibly have an impact on the Group:

Standard/ Interpretation		Effective date and expected adoption date*
General requirements for Disclosure of Sustainability-related financial information – IFRS S1 Climate-related Disclosures – IFRS S2	IFRS S1 sets out overall requirements for sustainability-related financial disclosures with the objective to require an entity to disclose information about its sustainability-related risks and opportunities that is useful to primary users of general purpose financial reports in making decisions relating to providing resources to the entity. IFRS S2 sets out the requirements for identifying, measuring and disclosing information about climate-related risks and opportunities that is useful to primary users of general purpose financial reports in making decisions relating to providing resources to the entity. In the first annual reporting period in which an entity applies IFRS S1, the entity is permitted to disclose information on only climate-related risks and opportunities (in accordance with IFRS S2). The Group has completed its assessment of the impact of the above standards and concluded that the standard amendments would not have a material impact on the consolidated financial statements.	January 1, 2024
Lack of exchangeability – IAS 21	The International Accounting Standards Board has published amendments to IAS 21 that specify how to assess whether a currency is exchangeable and how to determine the exchange rate when it is not. Applying the amendments, a currency is exchangeable when an entity is able to exchange that currency for the other currency through market or exchange mechanisms that create enforceable rights and obligations without undue delay at the measurement date and for a specified purpose. However, a currency is not exchangeable into the other currency if an entity can only obtain no more than an insignificant amount of the other currency at the measurement date for the specified purpose. When a currency is not exchangeable at the measurement date, an entity is required to estimate the spot exchange rate as the rate that would have applied to an orderly exchange transaction at the measurement date between market participants under prevailing economic conditions. In that case, an entity is required to disclose information that enables users of its financial statements to evaluate how the currency’s lack of exchangeability affects, or is expected to affect, the entity’s financial performance, financial position and cash flows. Management is investigating the potential impact of the standard to be amended.	January 1, 2025

^* Annual periods ending on or after.

New standards, amendments to standards and interpretations adopted from January 1, 2023 had no significant effect on the Group’s accounting policies.

32

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

5 Tribute Arrangement and Mining Agreement and Bilboes Gold Limited acquisition

On July 21, 2022 Caledonia Holdings Zimbabwe (Private) Limited (“CHZ”) entered into a Tribute Arrangement, and related Mining Agreement with Bilboes Holdings (Private) Limited (“Bilboes Holdings” or “Bilboes”) to mine its oxide and transitional ore (“tribute agreement”). This tribute agreement was specific to the Bilboes oxide mine and Bilboes Holdings was on care and maintenance at the date of the agreement.

In terms of the tribute agreement, Bilboes Holdings granted CHZ the right to mine the Bilboes oxide mine operations for the purpose of extracting and selling gold. In terms of this right, CHZ could operate the Bilboes oxide mine using a combination of Bilboes’ resources and their own, for CHZ’s account.

Subject to the stipulation in the tribute agreement, CHZ assumed all responsibility in connection with the oxide mining claims as if CHZ were the owner thereof and Bilboes Holdings remained the registered holder of the mining claims until ownership passes in terms of the Sale and Purchase Agreement, mentioned below.

In terms of the tribute agreement, CHZ had the right to provide instructions over the scope of works for the Bilboes oxide mine in terms of an operational plan and also had the right to terminate the tribute agreement. CHZ, therefore, had the ability to affect the variable returns of the Bilboes oxide mine and to ensure its returns were in line with the expectation of recouping its “investment” (all funds provided) at a 25% internal rate of return.

The tribute agreement came into effect on August 1, 2022, when the Ministry of Mines’ approval was received, and control was obtained through contractual arrangement.

The Bilboes oxide mine did not have sufficient processes in place to operate the oxide mining operations and was reliant on CHZ to provide instructions on the mining operations to create the necessary outputs. The Bilboes oxide mine was assessed as an asset and liability acquisition and not a business combination in terms of IFRS 3 Business Combinations. Directly attributable costs of bringing the Bilboes oxide mine to the location and condition necessary for it to be capable of operating in the manner intended by CHZ amounted to $872 and was accounted for as property, plant and equipment in the December 31, 2022 consolidated financial statements. 

On June 27, 2023 the decision was taken to place the mining tailing activities of the Bilboes oxide mine on care and maintenance as the cost related to removing the waste and accessing the orebody could exceed the benefit from the gold revenues to be received. The impairment loss that was recognised amounted to a carrying value of $851, on impairing the Bilboes oxide asset classified under property, plant and equipment. Mining and tailing activities continued at the Bilboes oxide mine until the end of September 2023 when the contract miner's notice period came to an end. Leaching of material that has already been deposited on the leach pad will continue until no longer economically feasible. Oxide mining and processing will resume when the stripping of the waste for the sulphide project commences and can be economically justified.

In addition to the tribute arrangement, Caledonia signed a conditional agreement (the “Sale and Purchase Agreement”) to purchase 100% of Bilboes Gold Limited (“Bilboes Gold”) on July 21, 2022. Bilboes Gold is the holding company of Bilboes Holdings that owns high-grade sulphide resources and the mentioned mining claims to the oxide mine deposit. It was agreed that Caledonia would purchase Bilboes Gold for a consideration to be settled by issue to the sellers of 5,123,044 new shares in Caledonia, comprising initial consideration shares, escrow consideration shares and deferred consideration shares. In addition to the shares, the agreement was also to grant a 1% net smelter royalty (“NSR”) on the Bilboes’ revenues to one of the sellers, Baker Steel Resources Trust Limited (“Baker Steel”), essentially instead of a number of shares that they would have been entitled to should they have agreed to accept all of their consideration in shares. The Sale and Purchase Agreement gave Caledonia the rights to the sulphide project in addition to the right to mine the Bilboes oxide mine as a result of the tribute agreement.

On January 6, 2023, following the satisfaction of conditions precedent, Caledonia completed the acquisition of Bilboes Gold that gave right to further evaluate and exploit the sulphide resources in addition to the oxide mining activities agreed in the tribute agreement.

33

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

5 Tribute Arrangement and Mining Agreement and Bilboes Gold Limited acquisition (continued)

The acquisition of Bilboes Gold was classified as an asset and liability acquisition as there were no inputs, processes and outputs and it was not a business combination in terms of IFRS 3 Business Combinations.

Upon completion of the transaction on January 6, 2023, the initial consideration shares were issued, in the amount of 4,425,797 common shares, to the three sellers of Bilboes Gold Limited and the NSR agreement was signed.

The escrow consideration shares of 441,095 common shares of Caledonia were issued to one of the sellers in settlement of a separate commercial arrangement between its subsidiary and the holding company of another seller, and upon receipt by the Company of a “share adjustment notice” instructing the issue of the shares. The share adjustment notice was only issued once approval had been obtained from the Reserve Bank of Zimbabwe for such commercial arrangement. On March 30, 2023, the 441,095 common shares were issued after the share adjustment notice was received.

Deferred consideration shares of 256,152 common shares of Caledonia were issued to the sellers on April 11, 2023. Total consideration shares issued for the acquisition of Bilboes Gold amounted to 5,123,044 shares with the value of the consideration shares set at US$65.677 million. The value of the initial consideration shares issued is based on the last trading day's closing share price on NYSE American LLC before completion of US$12.82 per share.

Consideration paid	$'000
Equity issued		65,677
Initial consideration shares issued (4,425,797 at $12.82 per share)		56,739
Escrow shares issued (441,095 at $12.82 per share)		5,655
Deferred consideration shares issued (256,152 at $12.82 per share)		3,283
Bilboes oxide mine assets (pre-acquisition)		(872	)
Prepayments - Bilboes pre-effective date costs		877
Total net consideration		65,682
Recognised amounts of identifiable assets and liabilities assumed (January 6, 2023)
Exploration and evaluation assets (note 17)		73,198
Inventories		70
Prepayments		5
Trade and other receivables		802
Cash and cash equivalents		54
Provisions		(4,466	)
Trade and other payables - external		(3,943	)
Lease liabilities		(28	)
Income tax payable		(10	)
		65,682

Acquisition-related costs 

Included in administrative costs is an amount of $3.1 million payable to two advisors on the successful completion of the Bilboes Gold acquisition.

34

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

6 Blanket Zimbabwe Indigenisation Transaction

On February 20, 2012 the Group announced it had signed a Memorandum of Understanding (“MoU”) with the Minister of Youth, Development, Indigenisation and Empowerment of the Zimbabwean Government pursuant to which the Group agreed that indigenous Zimbabweans would acquire an effective 51% ownership interest in the Zimbabwean company owning the Blanket Mine (also referred to herein as “Blanket” or “Blanket Mine” as the context requires) for a paid transactional value of $30.09 million. Pursuant to the above, members of the Group entered into agreements with each indigenous shareholder to transfer 51% of the Group’s ownership interest in Blanket Mine whereby it:

● sold a 16% interest to the National Indigenisation and Economic Empowerment Fund (“NIEEF”) for $11.74 million;

● sold a 15% interest to Fremiro Investments (Private) Limited (“Fremiro”), which is owned by indigenous Zimbabweans, for $11.01 million;

● sold a 10% interest to Blanket Employee Trust Services (Private) Limited (“BETS”) for the benefit of present and future managers and employees for $7.34 million. The shares in BETS are held by the Blanket Mine Employee Trust (“Employee Trust”) with Blanket Mine’s employees holding participation units in the Employee Trust; and

● donated a 10% ownership interest to the Gwanda Community Share Ownership Trust (“Community Trust”). In addition, Blanket Mine paid a non-refundable donation of $1 million to the Community Trust.

The Group facilitated the vendor funding of these transactions which is repaid by way of dividends from Blanket Mine. 80% of dividends declared by Blanket Mine are used to repay such loans and the remaining 20% unconditionally accrues to the respective indigenous shareholders.  Following a modification to the interest rate on June 23, 2017, outstanding balances on these facilitation loans attract interest at a rate of the lower of a fixed 7.25% per annum payable quarterly or 80% of the Blanket Mine dividend in the quarter. The timing of the loan repayments depends on the future financial performance of Blanket Mine and the extent of future dividends declared by Blanket Mine. The Group related facilitation loans were transferred as dividends in specie intra-group and now the loans and most of the interest thereon is payable to the Company.

Accounting treatment

The directors of Caledonia Holdings Zimbabwe (Private) Limited (“CHZ”), a wholly-owned subsidiary of the Company, performed an assessment using the requirements of IFRS 10: Consolidated Financial Statements (IFRS 10).  It was concluded that CHZ should consolidate Blanket Mine after the indigenisation.  The subscription agreements with the indigenous shareholders have been accounted for accordingly as a transaction with non-controlling interests and as a share-based payment transaction.

35

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

6 Blanket Zimbabwe Indigenisation Transaction (continued)

Accounting treatment

The subscription agreements, concluded on February 20, 2012, were accounted for as follows:

● Non-controlling interests (“NCI”) were recognised on the portion of shareholding upon which dividends declared by Blanket Mine will accrue unconditionally to equity holders as follows:

(a) 20% of the 16% shareholding of NIEEF;

(b) 20% of the 15% shareholding of Fremiro; and

(c) 100% of the 10% shareholding of the Community Trust.

● This effectively means that NCI was initially recognised at 16.2% of the net assets of Blanket Mine, until the completion of the transaction with Fremiro, whereby the NCI reduced to 13.2% (see below).

● The remaining 80% of the shareholding of NIEEF and Fremiro was recognised as NCI to the extent that their attributable share of the net asset value of Blanket Mine exceeds the balance on the facilitation loans, including interest.

● The transaction with BETS is accounted for in accordance with IAS 19 Employee Benefits (profit sharing arrangement) as the ownership of the shares does not ultimately pass to the employees. The employees are entitled to participate in 20% of the dividends accruing to the 10% shareholding in Blanket Mine if they are employed at the date of such distribution. To the extent that 80% of the attributable dividends exceeds the balance on the BETS facilitation loan, they will accrue to the employees at the date of such declaration.

● BETS is an entity effectively controlled and consolidated by Blanket Mine. Accordingly, the shares held by BETS are effectively treated as treasury shares in Blanket Mine and no NCI is recognised.

Fremiro purchase agreement

On November 5, 2018 the Company and Fremiro entered into a sale agreement for Caledonia to purchase Fremiro’s 15% shareholding in Blanket Mine. On January 20, 2020 all substantive conditions to the transaction were satisfied.  The Company issued 727,266 shares to Fremiro for the cancellation of their facilitation loan and purchase of Fremiro’s 15% shareholding in Blanket Mine. The transaction was accounted for as a repurchase of a previously vested equity instrument. As a result, the Fremiro share of the NCI of $3,600 was derecognised, shares were issued at fair value, the share-based payment reserve was reduced by $2,247 and the Company’s shareholding in Blanket Mine increased to 64% on the effective date.

Blanket Mine’s indigenisation shareholding percentages and facilitation loan balances

				Effective			NCI subject to			Balance of facilitation loan #
USD	Shareholding			interest & NCI recognised				facilitation loan		December 31, 2023		December 31, 2022
NIEEF		16	%		3.2	%		12.8	%		8,489		9,414
Community Trust		10	%		10.0	%		0.0	%		–		–
BETS ~		10	%		-*			-*			4,908		5,612
		36	%		13.2	%		12.8	%		13,397		15,026

*	The shares held by BETS are effectively treated as treasury shares (see above).
~	Accounted for under IAS19 Employee Benefits.
#	Facilitation loans are accounted for as equity instruments and are accordingly not recognised as loans receivable.

36

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

6 Blanket Zimbabwe Indigenisation Transaction (continued)

Accounting treatment (continued)

The balance on the facilitation loans is reconciled as follows:

	2023			2022
Balance at January 1		15,026			16,712
Interest incurred		259			580
Dividends used to repay loan		(1,888	)		(2,266	)
Balance at December 31		13,397			15,026

Advance dividend loans and balances

In anticipation of completing the underlying subscription agreements, Blanket Mine agreed to advance dividend arrangements with NIEEF and the Community Trust. Advances made to the Community Trust against their right to receive dividends declared by Blanket Mine on their shareholding were as follows:

● a $2 million payment on or before September 30, 2012;

● a $1 million payment on or before February 28, 2013; and

● a $1 million payment on or before April 30, 2013.

These advance payments were debited to a loan account bearing interest at a rate at the lower of a fixed 7.25% per annum, payable quarterly or the Blanket Mine dividend in the quarter to the advanced dividend loan holder. The loan is repayable by way of set-off of future dividends on the Blanket Mine shares owned by the Community Trust. Advances made to NIEEF as an advanced dividend loan before 2013 have been settled through Blanket Mine dividend repayments in 2014. The advance dividend payments were recognised as distributions to shareholders and they are classified as equity instruments. The loans arising are not recognised as loans receivables, because repayment is by way of uncertain future dividends.  The final payment to settle the advance dividend loan to the Community Trust was made on September 22, 2021.  Future dividends to the Community Trust are unencumbered from the date the loan was settled in full.

37

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

7 Capital management

When managing capital, the Group’s objectives are to safeguard its ability to continue as a going concern in order to pursue the mining operations and exploration potential of the mineral properties. The Group’s capital includes shareholders’ equity, comprising issued share capital (refer to note 25), reserves (refer to note 26), accumulated other comprehensive income, retained loss, bank financing (refer to note 23) and non-controlling interests (refer to note 28).

	2023		2022
Total equity		264,192		193,459

The Group’s primary objective regarding its capital management is to ensure that it has sufficient cash resources to maintain its on-going operations, provide returns for shareholders, accommodate any rehabilitation provisions and pursue growth opportunities. It assesses its short term needs and funds these by available cash, overdrafts and short to medium term loans. Capital requirements for future project are evaluated on a case-by-case basis. As at December 31, 2023, there has been no change with respect to the overall capital risk management strategy.

8 Revenue

	Blanket							Bilboes		Total
	2023		2022		2021			*2023		2023		2022		2021
Revenue		140,615		142,082		121,329			5,699		146,314		142,082		121,329
Revenue - silver sales		114		116		122			4		118		116		122
Revenue - gold sales		140,501		141,966		121,207			5,695		146,196		141,966		121,207
Total ounces gold sold		73,482		80,094		68,617			3,050		76,532		80,094		68,617
Net work in progress (oz)		1,934		681		(1,141	)		–		1,934		681		(1,141	)
Gold produced (oz)		75,416		80,775		67,476			3,050		78,466		80,775		67,476
Tonnes milled		770,440		752,033		665,628			154,040		924,480		752,033		665,628
Grade (g/t)		3.25		3.56		3.36			1.15
Recovery (%)		93.8		93.8		93.9			54.0
Realised gold price ($/oz)		1,912		1,772		1,766			1,867		1,910		1,772		1,766

* Bilboes Holdings was acquired on January 6, 2023.  No production for 2022 and 2021.

38

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

9 Production costs

	2023		2022		2020
Blanket Mine		69,591		62,998		53,126
Salaries and wages		25,042		23,037		20,609
Consumable materials		24,087		23,601		17,375
Consumable materials – COVID-19		–		311		297
Electricity costs		13,496		9,634		10,407
Safety		1,155		998		774
Cash-settled share-based expense (note 12.1(a))		637		853		692
On mine administration		2,783		2,736		1,806
Security		1,020		1,093		826
Solar operations and maintenance services		647		–		–
Obsolete inventory		283		563		36
Pre-feasibility exploration costs		441		172		304
Bilboes		13,118		–		–
Salaries and wages		2,796		–		–
Consumable materials		8,402		–		–
Electricity costs		553		–		–
Cash-settled share-based expense (note 12.1(a))		23		–		–
On mine administration		1,344		–		–
		82,709		62,998		53,126

10 Other expenses

	2023		2022		2021
Intermediated Money Transaction Tax*		1,266		1,378		799
COVID-19 donations		–		–		74
Community and social responsibility cost		1,504		898		1,167
Impairment of property, plant and equipment (note 18)		877		8,209		498
Impairment of exploration and evaluation assets (note 17)		–		467		3,837
Impairment Solar - VAT and duty receivables (note 21)		720		–		–
Bilboes pre-acquisition cost @		–		830		–
Expected credit losses on deferred consideration on the disposal of subsidiary		–		–		761
		4,367		11,782		7,136

*

Intermediated Money Transfer Tax ("IMTT”) is tax chargeable in Zimbabwe on transfer of physical money, electronically or by any other means, between two or more persons. IMTT is levied at a rate of 2% on RTGS$ denominated transactions and 1% on local foreign currency denominated transactions and outbound foreign payments.

@

Cost incurred by CHZ between the effective date (August 1, 2022) and the commencement date of the oxide mining operations (December 1, 2022) relating to administration and other general costs. These costs were incurred to maintain the operational integrity of the oxide mine and do not relate to direct costs of bringing the oxide mine to the location and condition necessary for it to be capable of operating in the manner intended by CHZ.

39

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

11 Administrative expenses

	2023		2022		2021
Investor relations		576		663		439
Audit fee		396		294		267
Advisory services fees		4,406		1,459		614
Listing fees		749		512		609
Directors fees – Company		571		569		527
Directors fees – Blanket		61		56		51
Employee costs – salaries and bonusses		6,734		5,855		5,462
Employee costs – settlements		1,784		–		–
Other office administration cost		445		468		177
Information technology and communication cost – Group related		241		391		178
Management liability insurance		897		985		551
Travel costs		569		689		216
		17,429		11,941		9,091

12 Share-based payments

12.1 Cash-settled share-based payments

(a) Restricted Share Units and Performance Units

Certain management and employees within the Group are granted Restricted Share Units (“RSUs”) and Performance Units (”PUs”) pursuant to provisions of the 2015 Omnibus Equity Incentive Compensation Plan (“OEICP”). All RSUs and PUs were granted and approved at the discretion of the Compensation Committee of the Board of Directors.

RSUs vest three years after grant date given that the service conditions of the relevant employees have been fulfilled. The value of the vested RSUs is the number of RSUs vested multiplied by the fair market value of the Company’s shares, as specified by the OEICP, on the date of settlement.

PUs have a performance condition based on gold production and, in recent awards, average normalised controllable cost per ounce of gold and a performance period of one to three years. The number of PUs that vest will be the relevant portion of the PUs granted multiplied by the performance multiplier, which will reflect the actual performance in terms of the performance conditions compared to expectations on the date of the award.

RSU holders are entitled to receive dividends over the vesting period. Such dividends will be reinvested in additional RSUs at the then applicable share price. PUs have rights to dividends only after they have vested.

RSUs and PUs allow for settlement of the vesting date value in cash or, subject to conditions, shares issuable at fair market value or a combination of both at the discretion of the unitholder.

The fair value of the RSUs at the reporting date was based on the Black Scholes option valuation model less the fair value of the expected dividends during the vesting period multiplied by the performance multiplier expectation. The fair value of the PUs at the reporting date was based on the Black Scholes option valuation model. At the reporting date it was assumed that there is a 93%-100% probability that the performance conditions will be met and therefore a 93%-100% (2022: 93%-100%) average performance multiplier was used in calculating the estimated liability.

The liability as at December 31, 2023 amounted to $1,294 (December 31, 2022: $2,217). Included in the liability as at December 31, 2023 is an amount of $660 (2022: $853, 2021: $692) that was expensed and classified as production costs; refer to note 9.

40

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

12 Share-based payments (continued)

12.1 Cash-settled share-based payments (continued)

(a) Restricted Share Units and Performance Units (continued)

The cash-settled share-based expense for PUs for the period amounted to $463 (2022: $609, 2021: $477). During the period PUs to the value of $351 were settled in share capital (net of employee tax) (2022:  $804, 2021: $Nil) with the employee tax portion recognised in profit or loss.

The following assumptions were used in estimating the fair value of the cash-settled share-based payment liability on December 31:

	December 31, 2023					December 31, 2022
	RSUs		PUs			RSUs			PUs
Risk free rate		–		3.88	%		3.88	%		3.88	%
Fair value (USD)		–		12.20			12.52			12.42
Share price (USD)		–		12.20			12.40			12.42
Performance multiplier percentage		–		93-100	%		–			93-100	%
Volatility		–		0.90			1.29			0.91

Share units granted:	RSUs			PUs			RSUs		PUs
Grant - January 11, 2019		–			–			–		95,740
Grant - March 23, 2019		–			–			–		28,287
Grant - June 8, 2019		–			–			–		14,672
Grant - January 11, 2020		17,585			69,678			17,585		114,668
Grant - March 31, 2020		–			696			–		1,971
Grant - June 1, 2020		–			–			–		1,740
Grant - September 9, 2020		–			697			–		1,611
Grant - September 14, 2020		–			5,300			–		20,686
Grant - October 5, 2020		–			230			–		514
Grant - January 11, 2021		–			56,244			–		78,875
Grant - April 1, 2021		–			–			–		770
Grant - May 14, 2021		–			964			–		2,389
Grant - June 1, 2021		–			1,310			–		1,692
Grant - June 14, 2021		–			398			–		507
Grant - August 13, 2021		–			–			–		2,283
Grant - September 1, 2021		–			–			–		553
Grant - September 6, 2021		–			458			–		531
Grant - September 20, 2021		–			460			–		526
Grant - October 1, 2021		–			1,016			–		2,530
Grant - October 11, 2021		–			450			–		500
Grant - November 12, 2021		–			1,846			–		1,998
Grant - December 1, 2021		–			900			–		936
Grant - January 11, 2022		–			75,198			–		96,359
Grant - January 12, 2022		–			825			–		825
Grant - May 13, 2022		–			2,040			–		2,040
Grant - June 1, 2022		–			1,297			–		1,297
Grant - July 1, 2022		–			2,375			–		2,375
Grant - October 1, 2022		–			2,024			–		2,024
Grant - April 7, 2023		–			79,521			–		–
Grant - May 15, 2023		–			581			–		–
Grant - June 1, 2023		–			617			–		–
Grant - June 7, 2023		–			572			–		–
Grant - August 10, 2023		–			5,514			–		–
Grant - September 1, 2023		–			1,617			–		–
Grant - October 3, 2023		–			14,258			–		–
RSU dividends reinvested		1,980			–			1,980		–
Settlements/terminations		(19,565	)		(144,772	)		–		(254,491	)
Total awards outstanding		-			182,314			19,565		224,408

41

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

12 Share-based payments (continued)

12.2 Equity-settled share-based payments

(a) EPUs

PUs which are classified as equity-settled (i.e. there is no option to vest in cash) (“EPUs”) have a performance condition based on gold production, average normalised controllable cost per ounce of gold and a performance period of three years. The number of EPUs that vest will be the relevant portion of the EPUs granted multiplied by the performance multiplier, which will reflect the actual performance in terms of the performance conditions compared to expectations on the date of the award.

EPUs have rights to dividends only after they have vested.

The shares issued are subject to a minimum holding period of until at least the first anniversary of the EPUs vesting date.

The fair value of the EPUs at the reporting date was based on the Black Scholes option valuation model less the fair value of the expected dividends during the vesting period multiplied by the performance percentage. At the reporting date it was assumed that there is a 100% probability that the performance conditions will be met and therefore a 100% performance multiplier was used in calculating the expense. The equity-settled share-based expense for EPUs as at December 31, 2023 amounted to $640 (2022: $417, 2021: $Nil).

The following assumptions were used in estimating the fair value of the equity-settled share-based payment  on:

Grant date	January 24, 2022			April 7, 2023
Number of units – remaining at reporting date		113,693			80,773
Share price (USD) - grant date		11.50			16.91
Fair value (USD) - grant date		10.15			15.33
Performance multiplier percentage at grant date		100	%		100	%

(b) Share option programs

The maximum term of the options under the OEICP is ten years. Equity-settled share-based payments under the OEICP will be settled by physical delivery of shares. Under the OEICP the aggregate number of shares that may be issued pursuant to the grant of options, or under any other share compensation arrangements of the Company, will not exceed 10% of the aggregate issued and outstanding shares issued of the Company. At December 31, 2023 the Company had 20,000 options outstanding granted to the employees of 3PPB Plc (providing US investor relations services to Caledonia), P Chidley and P Durham in equal units each.

The fair value of share-based payments noted above was estimated using the Black-Scholes valuation model as the fair value of the services could not be estimated reliably. Service and non-market performance conditions attached to the arrangements were not taken into account in measuring fair value.

The equity-settled share-based expense relating to grants amounted to $Nil (2022: $67, 2021: $Nil).

42

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

13 Net foreign exchange (loss) gain

On October 1, 2018 the RBZ issued a directive to Zimbabwean banks to separate foreign currency from RTGS$ in the accounts held by their clients and pegged the RTGS$ at 1:1 to the US Dollar. On February 20, 2019 the RBZ issued a further monetary policy statement, which allowed inter-bank trading between RTGS$ and foreign currency. The interbank rate was introduced at 2.5 RTGS$ to 1 US Dollar and traded at  6,104.72 RTGS$ to 1 US Dollar as at December 31, 2023 (December 31, 2022:  684.33 RTGS$).  The US dollar has remained the primary currency in which the Group’s Zimbabwean entities operate and the functional currency of these entities.

In June 2021 the RBZ announced that companies that are listed on the Victoria Falls Stock Exchange (“VFEX”) will receive 100% of the revenue arising from incremental production in US Dollars. Blanket has subsequently received confirmation that the “baseline” level of production for the purposes of calculating incremental production is 148.38 Kg per month (approximately 57,000 ounces per annum). The payment of the increased US Dollars proceeds for incremental production was applied from July 1, 2021. In December 2021, Caledonia obtained a secondary listing on the VFEX and Blanket received all amounts due in terms of that revised policy. The CMCL listing on the VFEX enabled Blanket to receive approximately 72.74% of its total revenue in US Dollars and the balance in RTGS$.

On February 3, 2023, the RBZ issued Exchange control directive RY002/2023 stating that with effect from February 6, 2023, the US$ export retention threshold across all sectors, including companies listed on the VFEX, had been standardized to 75% of export proceeds. The incremental export incentive scheme was also discontinued with effect from February 1, 2023. 

The table below illustrates the effect the weakening of the RTGS$ and other foreign currencies had on the consolidated statement of profit or loss.

	2023			2022			2021
Unrealised foreign exchange gain		4,217			12,736			2,755
Realised foreign exchange loss*		(6,767	)		(8,325	)		(1,571	)
Net foreign exchange (loss) gain		(2,550	)		4,411			1,184

*	Realised foreign exchange losses were predominantly recognised on bullion sales receivables, bank balances and RTGS$ VAT.
**	After December 31, 2023 the RTGS$:USD conversion rate devalued from RTGS$ 6,105:USD 1 to RTGS$ 20,945:USD 1 on March, 25 2024. The devaluation in the exchange rate will devalue RTGS$-denominated monetary assets in quarter 1, of 2024.

43

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

14 Derivative financial instruments

The fair value of derivative financial instruments not traded in an active market is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where available. The company did not apply hedge accounting to the derivative financial instruments and all fair value losses were recorded in the consolidated statements of profit or loss and other comprehensive income.  Transaction costs are recognised in profit or loss as incurred.

Derivative financial instrument expenses		2023			2022			2021
Put options	14.1(a)		1,097			38			–
Gold purchase options	14.2(a)		22			–			–
Gold loan	14.2(b)		–			(228	)		21
Call options (December 13, 2021)	14.2(b)		–			(240	)		–
Cap and collar options and Call options	14.2(c)		–			832			114
Call options transaction costs (March 9, 2022)	14.2(c)		–			796			–
Gold exchange-traded fund ("Gold ETF")			–			–			105
			1,119			1,198			240
Cash flows arising from investing activities
Acquisition of Put options	14.1(a)		(946	)		(478	)		–
Proceeds from derivative financial liabilities – Gold purchase options	14.2(a)		178			–			–
Proceeds from derivative financial assets - Gold ETF			–			–			1,066
			(768	)		(478	)		1,066
Cash flows arising from financing activities
Gold loan (repayment) proceeds	14.2(b)		–			(3,698	)		2,752
Call options (December 13, 2021) proceeds	14.2(b)		–			–			208
Call options (March 9, 2022) acquisition	14.2(c)		–			(176	)		–
Call options (March 9, 2022) proceeds	14.2(c)		–			416			–
			–			(3,458	)		2,960

14.1 Derivative financial assets

		2023		2022
Put options	14.1(a)		88		440
			88		440

(a) Put options

On December 19, 2023 the Company purchased put options to hedge 12,000 ounces of gold over a period of three months from January to March 2024 at a strike price of $1,950.

On September 29, 2023 and October 6, 2023 the Company purchased two gold purchase options of 1,000 ounces each at a market price of $1,875 and $1,841 per ounce.

On May 22, 2023 the Company purchased put options to hedge 28,000 ounces of gold over a period of seven months from June to December 2023 at a strike price of $1,900. 

On December 22, 2022 the Company purchased put options to hedge 16,672 ounces of gold over a period of five months from December to May 2023 at a strike price of $1,750.

44

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

14 Derivative financial instruments (continued)

14.1 Derivative financial assets (continued)

(a) Put options (continued)

The put options (together “the Put options”) were classified as level 1 in the fair value hierarchy.

On March 7, 2024 the Company purchased put options to hedge 12,000 ounces of gold over a period of three months from April to June 2024 at a strike price of $2,050.

14.2 Derivative financial liabilities

		2023		2022
Gold purchase options	14.2(a)		–		–
Gold loan	14.2(b)		–		–
Call options (December 13, 2021)	14.2(b)		–		–
Cap and collar options and Call options	14.2(c)		–		–
			–		–

(a) Gold purchase options

On September 29, 2023 and October 6, 2023 the Company purchased two gold purchase options of 1,000 ounces each at a market price of $1,875 and $1,841 per ounce. The gold purchase options were purchased when the gold price was below $1,900 per ounce at the date of gold revenue delivery. This was done to match the expiry date of the Call options expiring on October 26, 2023 with the date of the gold sales from Blanket, by buying the gold options, in the event that the gold price was below $1,900 at date of pricing of the gold revenue sales by Blanket. Proceeds of $178 were received in October 2023 on in the money options exercised.

(b) Gold loan and Call options

On December 13, 2021 the Company entered into two separate gold loan and option agreements with Auramet International LLC (“Auramet”).

In terms of the agreements the Group:

● received $3 million less transaction costs from Auramet at inception of the gold loan agreement (the “Gold loan”);

● is required to make two deliveries of 925 ounces each on May 31, 2022 and June 30, 2022 in repayment of the Gold loan or pay the equivalent in cash; and

● granted call options (the “Call options”) on 6,000 ounces to Auramet with a strike price of $2,000 per ounce, expiring monthly in equal monthly tranches from June 30, 2022 to November 30, 2022.

45

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

14 Derivative financial instruments (continued)

14.2 Derivative financial liabilities (continued)

(b) Gold loan and Call options (continued)

Accounting for the Gold loan and the Call options transactions:

● At inception the fair value of the Gold loan was calculated at the amount received less the fair value of the Call options.

● As at March 31, 2022 the fair value of the gold loan was calculated by discounting the fair value of the gold deliveries at a forward rate of $1,833 due by a market related discount rate.

● At inception and at March 31, 2022 the Call options were valued at the quoted prices available from the CME Group Inc. at each respective date.

● Differences in the fair values were accounted for as Fair value losses on derivative financial instruments in the consolidated statement of profit or loss and other comprehensive income.

● The Call options were classified as level 1 in the fair value hierarchy and the Gold loan as level 2.

● Derivative liabilities are not designated as hedging instruments.

Proceeds received under the Gold loan and Call options agreements were allocated as follows:

December 13, 2021
Net proceeds received	2,960
Fair value of Call options	208
Fair value of Gold loan	2,752

The Gold loan was settled in full on June 30, 2022.    The remaining Call options, outstanding as at September 30, 2022, expired on October 31, 2022 and November 30, 2022.

(c) Cap and collar options and Call options

On February 17, 2022 the Company entered into a zero cost contract to hedge 20,000 ounces of gold over a period of 5 months from March to July 2022. The hedging contract had a cap of $1,940 and a collar of $1,825 over 4,000 ounces of gold per month expiring at the end of each month over the 5-month period.

On March 9, 2022 in response to a very volatile gold price the Company purchased a matching quantity of Call options at a strike price above the cap at a total cost of $796 over 4,000 ounces of gold per month at strike prices of $2,100 per ounce from March 2022 to May 2022 and $2,200 per ounce from June 2022 to July 2022 in order to limit margin exposure and reinstate gold price upside above the strike price.

In April, 2022 Auramet and the Company each purchased matching quantities of Call options at a net settlement cost to the Company of $176 over 2,400 ounces of gold per month at strike prices of $1,886 and $1,959.50 respectively. These options were purchased to hedge against a short term increase in the gold price for the last week of April 2022. At the 2022 year end both these options expired.

The Cap and collar options and Call options were classified as level 1 in the fair value hierarchy.

46

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

15 Finance income and finance cost

	2023		2022		2021
Finance income received - Bank		39		17		14
Unwinding of rehabilitation provision (note 29)		109		132		–
Finance cost - Leases (note 19)		22		31		24
Zimbabwe Electricity Supply Authority interest		68		–		226
Finance cost – Overdraft and term loans		1,657		192		86
Finance cost - Motapa loan notes payable (note 30.1)		619		302		–
Finance cost - Solar loan notes payable (note 30.2)		549		–		–
Finance cost - Term loan		–		–		56
Finance cost - Capitalised to property, plant and equipment (note 18)		–		–		(17	)
		3,024		657		375

Refer to note 23 for finance costs paid on overdrafts and term loans. Refer to note 30 for finance costs paid on loan notes.

16 Tax expense

	2023		2022			2021
Tax recognised in profit or loss
Current tax		7,642		9,932			9,051
Income tax - current year		4,821		8,707			8,769
Income tax - change in tax estimate		1,944		(46	)		(168	)
Withholding tax - current year		867		1,271			450
Acquisition of Bilboes Gold tax liability (note 5)		10		-			-
Deferred tax expense		5,168		6,838			5,806
Origination and reversal of temporary differences		5,168		6,838			5,806
Tax expense – recognised in profit or loss		12,810		16,770			14,857
Tax recognised in other comprehensive income
Income tax - current year		-		-			-
Tax expense		12,810		16,770			14,857

47

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

16 Tax expense (continued)

Unrecognised deferred tax assets

	2023	2022	2021
Bilboes Holdings (Private) Limited*	4,447	-	-
Caledonia Holdings Zimbabwe (Private) Limited – mining	2,942	-	-
Caledonia Holdings Zimbabwe (Private) Limited - services	1,805	1,805	1,205
Blanket Employee Trust Services (Private) Limited	260	227	130
Caledonia Mining Services (Private) Limited	-	69	5
Greenstone Management Services (Pty) Ltd (UK) @	144	176	139
Tax losses carried forward	9,598	2,277	1,479

Taxable losses do not expire for the entities incurring taxable losses within the Group, unless the entities cease trading. Tax losses carried forward relate to Caledonia Holdings Zimbabwe (Private) Limited and Bilboes Holdings (Private) Limited.  Deferred tax assets have not been recognised in these entities as future taxable income is not deemed probable to utilise these losses against.

*	Assessed losses of Bilboes of $3,763 was acquired during 2023.
@	Assessed losses of Greenstone Management Services (Pty) Ltd (UK) are not carried over and reset to zero each year.

Tax paid	2023		2022		2021
Net income tax payable at January 1	(1,284	)	(1,461	)	(419	)
Current tax expense	(7,642	)	(9,932	)	(9,051	)
Acquisition of Bilboes Gold tax liability (note 5)	(10	)	–		–
Foreign currency movement	840		3,243		583
Tax paid	9,206		6,866		7,426
Net income tax receivable/ (payable) at December 31	1,110		(1,284	)	(1,461	)

48

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

16 Tax expense (continued)

Reconciliation of tax rate
Profit for the year	(618	)	22,866		23,142
Total tax expense	12,810		16,770		14,857
Profit before tax	12,192		39,636		37,999
Income tax at Company's domestic tax rate (1)	-		-		-
Tax rate differences in foreign jurisdictions (2)	5,808		12,600		11,847
Effect of income tax calculated in RTGS$ as required by PN26 (3)	-		713		590
Management fee – withholding tax on deemed dividend portion	398		247		342
Management fee – non-deductible deemed dividend	675		735		611
Management fee – withholding tax - current year	169		174		148
Withholding tax on intercompany dividends	300		850		-
Non-deductible expenditure
- Donations	318		269		311
- Other non-deductible expenditure	37		1,613		904
Unrealised foreign exchange gains	(642	)	(1,322	)	(614	)
Change in tax estimates
- Zimbabwean income tax	1,891		-		(166	)
- South African income tax	53		(46	)	(2	)
Change in unrecognised tax losses	3,803		937		886
Tax expense - recognised in profit or loss	12,810		16,770		14,857

(1)	The tax rate in Jersey, Channel Islands is 0% (2022: 0%, 2021: 0%).
(2)	The effective tax rate of 105.07% (2022: 42.31%) exceeds the statutory tax rates of subsidiaries of the Company, as certain expenditures are incurred by the Company that are not tax-deductible against taxable income in Zimbabwe and South Africa, where the enacted tax rates are 24.72% (2022: 24.72%) and 27.00% (2022: 28%) respectively.
(3)	In 2019 ZIMRA issued PN26 that was affected retrospectively from February 22, 2019. The public notice provided clarity on Section 4 (a) of the Finance Act [Chapter 23.04] of Zimbabwe, which required that the calculation of taxable income be performed in RTGS$ and that the payment of the tax be in the ratio of the currency that the taxable income and revenue is earned. The reconciling item reconciled the profit before tax calculated using US Dollars as the functional currency of the Zimbabwean entities to taxable income calculated in RTGS$. PN26 was superseded by Section 37AA of the Income Tax Act [Chapter 23:06] of Zimbabwe, which requires taxpayers to submit separate tax returns where any part of the income from trade or investment is earned in foreign currency. Section 37AA stated that the calculation of taxable income be expressed in foreign currency and RTGS$ and that the payment of the tax payable be made proportionately to reflect the percentage share of income earned in all foreign currencies and the percentage earned in Zimbabwe dollars. The section further provides that the RTGS$ should be converted to US$ using the average auction rate of exchange for the year of assessment, with the same being applicable to US$ amounts that need to be converted to RTGS$.

On November 30,2023, the Zimbabwean Government announced in the 2024 National Budget Statement that the income tax rate will increase from 24.72% to 25.75% with effect from January 1, 2024. This was gazetted into law on December 30, 2023.

The South African Government announced in the 2021 National Budget Statement that the income tax rate will be reduced from 28.00% to 27.00% for the years of assessment ending on and after March 31, 2023.  This resulted in a change in the estimated deferred tax asset.

49

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

16 Tax expense (continued)

Recognised deferred tax assets and liabilities

	Assets			Liabilities				Net
	2023	2022		2023		2022		2023		2022
Property, plant and equipment	-	-		(6,348	)	(6,323	)	(6,348	)	(6,323	)
Exploration and evaluation assets	-	-		(146	)	(2	)	(146	)	(2	)
Inventories – obsolete stock	65	(163	)	-		-		65		(163	)
Prepayments	-	-		(9	)	(5	)	(9	)	(5	)
Unrealised foreign exchange	-	733		-		-		-		733
Trade and other payables	190	814		-		-		190		814
Provisions	204	25		-		-		204		25
Other	66	-		-		-		66		-
Tax assets/ (liabilities)	525	1,409		(6,503	)	(6,330	)	(5,978	)*	(4,921	)*

^* The net deferred tax liability consists of a deferred tax asset of $153 (2022: $202) from the South African operation and a net deferred tax liability of $6,131 (2022: $5,123) due to the Zimbabwean operation. The amounts are in different tax jurisdictions and cannot be offset.  The amounts are presented as part of non-current assets and non-current liabilities in the statements of financial position. The deferred tax asset recognised is supported by evidence of probable future taxable income.

Movement in recognised deferred tax assets and liabilities

	Balance January 1, 2023		Recognised in profit or loss		Foreign exchange movement		Balance December 31, 2023
Property, plant and equipment	(6,323	)	(5,737	)	5,712		(6,348	)
Exploration and evaluation assets	(2	)	-		(144	)	(146	)
Inventories – obsolete stock	(163	)	90		138		65
Prepayments	(5	)	(5	)	1		(9	)
Unrealised foreign exchange	733		-		(733	)	-
Trade and other payables	814		(111	)	(513	)	190
Provisions	25		529		(350	)	204
Other	-		66		-		66
Tax (liabilities)/ assets	(4,921	)	(5,168	)	4,111		(5,978	)

	Balance January 1, 2022		Recognised in profit or loss		Foreign exchange movement		Balance December 31, 2022
Property, plant and equipment	(9,328	)	(8,560	)	11,565		(6,323	)
Exploration and evaluation assets	(47	)	10		35		(2	)
Inventories - obsolete stock	3		(295	)	129		(163	)
Prepayments	(10	)	4		1		(5	)
Unrealised foreign exchange	499		1,179		(945	)	733
Trade and other payables	989		794		(969	)	814
Provisions	54		30		(59	)	25
Tax (liabilities)/ assets	(7,840	)	(6,838	)	9,757		(4,921	)

50

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

17 Exploration and evaluation assets

	Bilboes Gold	Motapa	Maligreen	Connemara North		GG	Sabiwa	Abercorn	Valentine	Total
Balance at January 1, 2022	–	–	4,196	463		3,618	290	16	65	8,648
Acquisition costs:
- Mining claims acquired	–	7,844	–	–		–	–	–	–	7,844
Exploration costs:
- Consumables and drilling	–	–	1,170	–		36	–	–	–	1,206
- Contractor	–	–	–	4		–	–	–	–	4
- Labour	–	–	260	–		37	–	11	–	308
- Power	–	–	–	–		32	4	–	–	36
Impairment *	–	–	–	(467	)	–	–	–	–	(467	)
Balance at December 31, 2022	–	7,844	5,626	–		3,723	294	27	65	17,579
Balance at January 1, 2023	–	7,844	5,626	–		3,723	294	27	65	17,579
Acquisition costs:
- Bilboes Gold	73,198	–	–	–		–	–	–	–	73,198
Decommissioning asset estimation adjustment	–	1,466	152	–		–	–	–	–	1,618
Exploration costs:	–	–	–	–		–	–	–	–
- Consumables and drilling	–	903	102	–		–	–	–	–	1,005
- Contractor	–	2	–	–		–	–	–	–	2
- Labour	–	377	111	–		–	–	–	–	488
- Power	–	–	7	–		–	–	–	–	7
- Other	375	–	–	–		–	–	–	–	375
Balance at December 31, 2023	73,573	10,592	5,998	–		3,723	294	27	65	94,272

^* Caledonia completed sufficient work to establish that the potential orebody at the Connemara North property would not meet Caledonia’s requirements in terms of size, grade and width.  Accordingly, Caledonia did not exercise the option to acquire the property.  The costs have been impaired to $Nil.

Non cash acquisitions of exploration and evaluation assets consist of Bilboes acquisition ($73,198), decommissioning ($1,618) and Bilboes lease right use of asset ($40).

51

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

17 Exploration and evaluation assets (continued)

(a) Bilboes Gold

Refer to note 5 for more information on the acquisition of the Bilboes Gold sulphide exploration and evaluation project.

(b) Motapa

On November 1, 2022 Caledonia entered into a share purchase agreement with Bulawayo Mining Company Limited (“Bulawayo Mining”) to acquire all the shares of Motapa Mining Company UK Limited (“Motapa”), along with its wholly owned subsidiary Arraskar Investments (Private) Limited (“Arraskar”) (“Share Purchase Agreement”).

Caledonia considers Motapa to be highly prospective and strategically important to its growth ambitions in Zimbabwe in terms of both location and scale. Motapa is a large exploration property which is contiguous to the Bilboes gold project.

The Motapa asset has been mined throughout most of the second half of the 20th century, Caledonia understands that during this period the region produced as much as 300,000 ounces of gold. Whilst none of the mining infrastructure remains, the evidence of historical mining will provide guidance to our exploration team in best understanding the prospectivity of the region.

The acquisition was accounted for as an asset acquisition as the net assets acquired do not meet the definition of a business. The purchase price of the net assets acquired was allocated to exploration and evaluation assets based on management’s estimation of the fair value at acquisition.

The initial purchase price of $1 million was paid on November 1, 2022. Stamp duties of $41 were paid on November 9, 2022. There were no liabilities assumed with the acquisition of Motapa and Arraskar. The remainder of the purchase price was settled by way of loan notes (refer to note 30.1).  The final settlement was made on July 3, 2023.

(c) Maligreen

On November 3, 2021 the mining claims over the Maligreen project (“Maligreen”), a property situated in the Gweru mining district in the Zimbabwe Midlands, were transferred to Caledonia Holdings Zimbabwe (Private) Limited for a total cash consideration of US$4 million.

Maligreen is a substantial brownfield exploration opportunity with significant historical exploration and evaluation work having been conducted on the property over the last 30 years including:

● An estimated 60,000 meters of diamond core and percussion drilling

● 3.5 tonnes of bulk metallurgical test work

● Aeromagnetic and ground geophysical surveys

The total land area of Maligreen is approximately 550 hectares comprising two historic open pit mining operations which produced approximately 20,000 oz of gold mined from oxides between 2000 and 2002 after which the operation was closed.

52

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

17 Exploration and evaluation assets (continued)

(c) Maligreen (continued)

On November 7, 2022 the Company published an announcement and an updated technical report on SEDAR updating the estimated mineral resources at Maligreen. The report has an effective date of September 30, 2022 and estimates measured and indicated mineral resources of 8.03 million tonnes at a grade of 1.71g/t containing approximately 442,000 ounces of gold and inferred mineral resources of 6.17 million tonnes at a grade of 2.12g/t containing approximately 420,000 ounces of gold. The upgrade to the mineral resources at Maligreen improves the geological confidence of approximately half the mineral resources from inferred to measured and indicated mineral resources from the previous mineral resources statement.

53

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

18 Property, plant and equipment

Cost	Land and Buildings	Right of use assets		Mine development, infrastructure and other		Assets under construction and decommissioning assets		Plant and equipment		Furniture and fittings		Motor vehicles		Solar Plant&		Total
Balance at January 1, 2022	14,435	543		73,914		35,476		64,319		1,342		3,169		1,940		195,138
Additions*	–	–		–		31,711		3,049		243		147		12,198		47,348
Impairments@	–	–		(8,518	)	–		(998	)	–		–		–		(9,516	)
Reallocations between asset classes	759	–		15,886		(20,734	)	4,089		–		–		–		–
Acquisition of Bilboes oxide assets (Tribute) (note 5)	–	–		872		–		–		–		–		–		872
Foreign exchange movement	–	(18	)	–		–		26		(22	)	(2	)	–		(16	)
Balance at December 31, 2022	15,194	525		82,154		46,453		70,485		1,563		3,314		14,138		233,826
Balance at January 1, 2023	15,194	525		82,154		46,453		70,485		1,563		3,314		14,138		233,826
Additions*	–	–		–		28,276		538		335		294		163		29,606
Impairments~	–	–		(872	)	–		(36	)	–		–		–		(908	)
Disposals	–	–		–		–		(33	)	–		–		–		(33	)
Reallocations between asset classes	1,492	–		37,116		(39,099	)	491		–		–		–		–
Reallocate to assets held for sale	–	–		–		–		–		–		–		(14,301	)	(14,301	)
Foreign exchange movement	–	(24	)	–		(2	)	–		(37	)	(3	)	–		(66	)
Balance at December 31, 2023	16,686	501		118,398		35,628		71,445		1,861		3,605		–		248,124

*	Included in additions is the change in estimate for the decommissioning asset of $1,962 (2022: ($468))
@	Included in the 2022 impairments are development asset costs of $8,518 that predominantly relates to prospective areas above 750 meters at Blanket which are not included in the LoMP.  Also included in the 2022 impairments are generator cost of $791 and loader bottom decks at a cost of $101; these assets were no longer in working condition.  The carrying amount for these impaired assets were impaired to $Nil.
&	The solar plant was fully commissioned on February 2, 2023 and the sale agreement between Caledonia Mining Corporation Plc and Caledonia Mining Services (Private) Limited was concluded for the sale of the solar plant.  Depreciation on the solar plant commenced on February 2, 2023 and the power purchase agreement, between Caledonia Mining Services (Private) Limited and Blanket Mine, became effective. From September 28, 2023 the solar plant is classified as held for sale. In December 2022, the Caledonia board approved a proposal for Caledonia Mining Services (Private) Limited (which owns the solar plant) to issue loan notes pursuant to a loan note instrument (“bonds”) up to a value of $12 million. The decision was taken in order to optimise the capital structure of the Group and provide additional debt instruments to the Zimbabwean financial market.  Refer to note 30.2 for more information on these loan notes.
~	On June 27, 2023 the decision was taken to place the Bilboes oxide mine on care and maintenance as the cost related to removing the waste and accessing the orebody could exceed the benefit from the gold revenues to be received. The impairment loss that was recognised amounted to a carrying value of $851 on impairing the Bilboes oxide asset classified under mine development, infrastructure and other. Mining and metallurgical processing continued at the Bilboes oxide mine until the end of September 2023 when the contract miner's notice period came to an end. Leaching of material that has already been deposited on the leach pad will continue while the revenue from these activities contributes to the cost of the asset. Oxide mining and processing will resume when the stripping of the waste for the sulphide project commences and can be economically justified.

54

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

18 Property, plant and equipment (continued)

Accumulated depreciation and Impairment losses	Land and Buildings		Right of use assets			Mine development, infrastructure and other			Assets under construction and decommissioning assets		Plant and equipment			Furniture and fittings			Motor vehicles			Solar Plant			Total
Balance at January 1, 2022		7,335		97			8,910			600		25,505			958			2,631			–			46,036
Depreciation for the year		1,015		137			3,990			93		4,527			163			216			–			10,141
Accumulated depreciation - impairments		–		–			(532	)		–		(775	)		–			–			–			(1,307	)
Foreign exchange movement		–		(4	)		–			–		–			(21	)		(2	)		–			(27	)
Balance at December 31, 2022		8,350		230			12,368			693		29,257			1,100			2,845			–			54,843
Balance at January 1, 2023		8,350		230			12,368			693		29,257			1,100			2,845			–			54,843
Depreciation for the year		1,012		124			5,459			93		6,573			185			258			782			14,486
Accumulated depreciation for assets reallocated to assets held for sale		–		–			–			–		–			–			–			(782	)		(782	)
Accumulated depreciation - impairments		–		–			(21	)		–		(10	)		–			–			–			(31	)
Foreign exchange movement		–		(9	)		–			–		–			(30	)		(2	)		–			(41	)
Balance at December 31, 2023		9,362		345			17,806			786		35,820			1,255			3,101			–			68,475
Carrying amounts
At December 31, 2022		6,844		295			69,786			45,760		41,228			463			469			14,138			178,983
At December 31, 2023		7,324		156			100,592			34,842		35,625			606			504			–			179,649

55

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

18 Property, plant and equipment (continued)

(a) Impairment considerations

At year end management identified indicators of impairment at the Blanket CGU. The Blanket CGU excluded the Solar plant that is classified as held for sale at December 31, 2023. No impairment indicators were identified at other CGUs nor at a consolidated level, excluding the Blanket CGU. In calculating the recoverable amount, of the Blanket CGU, the recoverable amount significantly exceeded the carrying value. Management used the following assumptions as their best estimate:

● Gold price per ounce ranging from $1,748 to $2,034.

● Life of mine (“LoM”) to 2041 (that is inclusive of inferred resources and it based on an internal estimate representing management’s best estimate of the LoM inclusive of the latest drilling results).

● grade ranging between 3.14g/t to 3.29g/t.

● Production ounces between 77,822 and 81,446 per annum over the LoM.

● On mine cost of between $892 to $1,427 (real) over the LoM.

● Peak capex of $30.8 million.

● Weighted average cost of capital of 15.4%.

● Income tax of 25.75% on taxable income.

Items of property, plant and equipment are depreciated over the LoM, which includes planned production from inferred resources. These inferred resources are included in the calculation when the economic recovery thereof is demonstrated by the achieved recovered grade relative to the mine’s pay limit for the period 2006 to 2018. The pay limit is 2.10 g/t (2022: 2.10 g/t) while the recovered grade has ranged from 2.96 g/t to 3.24 g/t over the period. All-in-sustaining-cost has remained consistently below the gold price received over this period resulting in economic recovery of the inferred resources.

(b) Change in estimate

In April 2023 management performed an operational efficiency review of its mining related equipment, which resulted in changes in the expected useful life of some of the assets included under mine, development, infrastructure and other and plant and equipment asset classes.

(i) Mine, development, infrastructure and other

In August 2015 the Blanket Mine announced the construction of a new central shaft going down to 1,200m from surface, providing access for horizontal development in two directions on three levels below 750m. The aim was to increase production to annual levels of 75,000 to 80,000 ounces per year and extend the LoM. The Company commissioned the central shaft in the first quarter of 2021.This shaft is used for hoisting ore and people. Prior to commissioning of the central shaft, men were hoisted through the existing Jethro shaft which was constructed around 2009. With the commissioning of the central shaft, there will be a gradual decrease in the usage of the Jethro shaft for hoisting until decommissioning. The Jethro shaft is expected to be decommissioned in March 2025.  Future economic benefits are expected to flow to the entity until the shaft is decommissioned.

The Company estimates Blanket will produce 160,000 ounces until the Jethro shaft is decommissioned, previously estimated over the LoM.

56

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

18 Property, plant and equipment (continued)

(b) Change in estimate

(ii) Plant and equipment

In carrying out a comprehensive asset’s useful life assessment, the following factors were considered in determining the useful life of an asset:

● expected physical wear and tear, which depends on operational factors such as the number of shifts for which the asset is to be used, the current repair and maintenance programme, and the care and maintenance of the asset while idle; and

● the expected usage of the asset.

An analysis of the various asset categories for which exceptions were identified during the assessment process are generators, load haul dump machines (“LHDs”), dump trucks, rock breakers and drill rigs.  Previously estimated with a ten-year useful life, this plant and equipment is now estimated to have a useful life of five years from April 1, 2023.

Notwithstanding any future addition to the above-mentioned assets, the effect of the change in useful life on actual and expected depreciation expense, effective for the year ended December 31, 2023, is as follows:

Increase in depreciation expense from April 1, 2023 to December 31, 2023
Mine, development, infrastructure and other	856
Plant and equipment	1,302
	2,158

The above results are a change in estimates and applied prospectively from April 1, 2023.

(c) Non-cash items excluded from acquisition of property, plant and equipment:

	2023			2022
Net property, plant and equipment included in prepayments		329			(4,445	)
Net property, plant and equipment included in trade and other payables		583			(1,876	)
Bilboes oxide project payable (note 29)		–			(872	)
Change in estimate for decommissioning asset - adjustment capitalised in property, plant and equipment (note 18)		(1,962	)		468
		(1,050	)		(6,725	)

(d) Capital commitments

The amount of contractual commitment for the acquisition of property, plant and equipment at December 31, 2023 amounted to $2,035 (2022: $4,066).

57

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

19 Leases

Leases as lessee

The Group leases administrative offices. The leases, which the Group normally enters into, typically run for a period of 3 to 6 years, with an option to renew the lease after that date. Three leases for the administrative offices expire in 2024 and one lease in 2025. 

Information about leases for which the Group is a lessee is presented below.

i) Amounts recognised in the statement of financial position

Right of use assets

Right of use assets related to leased properties are presented as part of property, plant and equipment (refer to note 18).

	2023			2022
Balance at January 1		295			446
Depreciation		(124	)		(137	)
Foreign currency movement		(15	)		(14	)
Balance at December 31		156			295

Lease liabilities

	2023			2022
Balance at January 1		313			465
Additions to lease liability		67			-
Finance cost		22			31
Lease payments		(184	)		(150	)
Foreign currency movement		(10	)		(33	)
Balance at December 31		208			313

ii) Amounts recognised in profit or loss

	2023			2022		2021
Finance cost on lease liabilities (note 15)		22			31		24
Unrealised foreign exchange gain		(5	)		19		1
Depreciation (note 18)		124			137		115
		141			187		140

iii) Amounts recognised in statement of cash flows

	2023		2022		2021
Total cash outflow for leases - principal		162		119		105
Total cash outflow for leases - finance cost		22		31		24
Total cash outflow for leases - payments		184		150		129

58

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

19 Leases (continued)

iv) Maturity of lease liabilities

The maturity of lease liabilities are as follows as at December 31:

	2023			2022
Less than one year		175			152
One to two years		42			150
Two to three years		–			40
Total lease payments		217			342
Finance cost		(9	)		(29	)
Present value of lease liabilities		208			313

20 Inventories

	2023		2022
Consumable stores*		18,001		17,645
Gold in progress @		2,303		689
		20,304		18,334

*	Included in consumables stores is an amount of ($1,793) (2022: ($1,510)) for provision for obsolete stock for items that are not compatible with plant and equipment currently in use.
@	Gold work in progress balance as at December 31, 2023 consists of 3,057 ounces (2022: 1,123 ounces).

21 Trade and other receivables

	2023		2022
Bullion sales receivable		5,403		7,383
VAT receivables		4,259		1,001
Solar - VAT and duty receivables*		–		720
Deposits for stores, equipment and other receivables		290		81
		9,952		9,185

The carrying value of trade receivables is considered a reasonable approximation of fair value and are short term in nature. No provision for expected credit losses was recognised in the current or prior period as none of the debtors were past due and there has been no doubtful debt on debtors (refer to note 33). Up to the date of approval of these financial statements all of the outstanding bullion sales receivable were settled in full. The Company offset VAT receivables equating to $3.9 million against liabilities due for other types of taxes administrated by the Zimbabwe Revenue Authority.

* On December 7, 2021 a duty rebate on the importation of capital goods was granted to the Company in terms of the Customs and Excise General Regulations of 2001. However, the customs officials at Forbes Border Post rejected a rebate on solar cables despite presentation of a valid rebate letter. An appeal was made to the Commissioner of Taxes seeking the rebate and the outcome of the appeal was unfavourable.

59

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

22 Prepayments

	2023		2022
Caledonia Mining South Africa (Proprietary) Limited (“CMSA”) suppliers		527		254
Blanket Mine third party suppliers		1,746		1,494
Bilboes third party suppliers		–		802
Solar prepayments		–		104
Bilboes pre-effective date costs		–		877
Other prepayments		265		162
		2,538		3,693

23 Cash and cash equivalents

	2023			2022
Bank balances		4,252			4,737
Restricted cash *		2,456			1,998
Cash and cash equivalents		6,708			6,735
Bank overdrafts and short term loans used for cash management purposes @		(17,740	)		(5,239	)
Net cash and cash equivalents		(11,032	)		1,496

*	Cash of $2,456 (denominated in RTGS$) held by Blanket Mine was earmarked by Stanbic Bank Zimbabwe as a letter of credit in favour of CMSA. The letter of credit was issued by Stanbic Bank Zimbabwe on November 28, 2023 and settled in January, 2024. The cash on maturity was transferred to CMSA’s bank account, denominated in South African Rands.
@	Interest paid on bank overdraft was $1,657 (2022: $192).

	Date drawn	Expiry	Repayment term	Principal value	Balance drawn at December 31, 2023
Overdraft facilities and term loans
Stanbic Bank - RTGS$ denomination	September 2023	March 2024	On demand	RTGS$350 million	$Nil
Stanbic Bank - USD denomination	September 2023	March 2024	On demand	$4 million	$3.8 million
Ecobank - USD denomination	November 2022	December 2024	On demand	$5 million	$5 million
Nedbank Zimbabwe - USD denomination	December 2022	April 2024	On demand	$3.5 million	$3.4 million
Nedbank Zimbabwe term loan - USD denomination	April 2023	April 2024	On demand	$3.5 million	$3.5 million
CABS – USD denomination	August 2023	July 2024	On demand	$2 million	$2 million

60

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

24 Assets and liabilities associated with assets held for sale

	2023		2022
Non-current assets held for sale
Solar plant		13,519		–
Liabilities associated with assets held for sale
Site restoration liability		128		–

In the second quarter of 2023 management embarked on a marketing process to locate a buyer for the Company’s solar plant located next to Blanket Mine. Various offers were received and a counterparty with a non-binding offer was given exclusivity to further negotiate the sale of the plant after proving their ability to operate and fund solar plants of similar size and complexity. The offer was received from a reputable global renewable energy operator and management is in an advanced stage of executing agreements to sell the solar plant. It is proposed that the new owners will exclusively supply Blanket with electricity from the plant, on a take-or-pay basis and in doing so secure Blanket’s future power supply. This has the benefit of realising a cash profit on the sale of the plant and generate cash for reinvestment in our gold projects. In addition, management can focus on Caledonia’s core business of gold mining which yields higher returns to our shareholders.

On September 28, 2023 the Board approved management to negotiate the sale of the solar plant with the potential buyer. The assets were available for sale in their condition on September 28, 2023 and therefore met the criteria to be classified as held for sale.

Management determined the value at the carrying amount of $13,519 at September 28, 2023, as it was the lower of the fair value less cost to sell and the carrying amount. The proceeds of the disposal are expected to substantially exceed the carrying amount of the related net assets and accordingly no impairment losses have been recognised on the classification of the solar plant.  The asset was classified as property, plant and equipment before the reclassification to assets held for sale.

25 Share capital

Authorised

Unlimited number of ordinary shares of no par value.

Unlimited number of preference shares of no par value.

Issued ordinary shares

	Number of fully paid shares		Amount
January 1, 2022		12,756,606		82,667
Shares issued:
- share-based payment - employees (note 12.1(a))		76,520		804
December 31, 2022		12,833,126		83,471
Shares issued:
- share-based payment - employees (note 12.1(a))		24,389		351
- equity raise*		1,207,514		15,569
- Bilboes Gold Limited acquisition (note 5)		5,123,044		65,677
December 31, 2023		19,188,073		165,068

* Gross proceeds of $10,770 with a transaction cost of $846 were raised by issuing depository interests on the AIM of the London Stock Exchange Gross proceeds of $5,850 with a transaction cost of $205 were raised by issuing depository receipts on the VFEX. During quarter one of 2023, Mark Learmonth, Chief Executive Officer, and Toziyana Resources Limited, a company affiliated with Victor Gapare, executive Director of the Company, subscribed for 3,587 and 11,000 depositary interests respectively in the equity raise. 

61

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

26 Reserves

Foreign currency translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations with functional currencies that differ from the presentation currency.

Share-based payment reserve

The share-based payment reserve comprises the fair value of equity instruments granted to employees, directors and service providers under share option plans (refer to note 12) and equity instruments issued to Blanket’s indigenous shareholders under Blanket Mine’s Indigenisation Transaction (refer note 6).

Contributed surplus

The contributed surplus reserve comprises the reduction in stated capital as approved by shareholders at the special general meeting on January 24, 2013 to be able to commence dividend payments.

Reserves

	2023			2022
Foreign currency translation reserve		(10,409	)		(9,787	)
Contributed surplus		132,591			132,591
Equity-settled share-based payment reserve		15,637			14,997
Total		137,819			137,801

27 Earnings per share

Weighted average number of shares – Basic earnings per share
(in number of shares)	2023		2022		2021
Issued shares at the beginning of year (note 25)		12,833,126		12,756,606		12,118,823
Weighted average shares issued		5,792,435		74,214		51,462
Weighted average number of shares at December 31		18,625,561		12,830,820		12,170,285
Weighted average number of shares - Diluted earnings per share
(in number of shares)	2023		2022		2021
Weighted average at December 31		18,625,561		12,830,820		12,170,285
Effect of dilutive options		6,550		6,482		6,933
Weighted average number of shares (diluted) at December 31		18,632,111		12,837,302		12,177,218

The average market value of the Company’s shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the year during which the options were outstanding. Options of 13,450 (2022: 13,518, 2021: 18,842) were excluded from the dilutive earnings per share calculation as these options were anti-dilutive.

The quantity of options outstanding as at year end that were out of the money amounted to $Nil (2022: $Nil, 2021: $Nil) options.

62

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

27 Earnings per share (continued)

The calculation of total basic and diluted earnings per share for the year ended December 31, 2023 was calculated as follows:

	2023			2022			2021
Profit for the year attributable to owners of the Company (basic and diluted)		(4,198	)		17,903			18,405
Blanket Mine Employee Trust Adjustment		(346	)		(517	)		(326	)
Profit attributable to ordinary shareholders (basic and diluted)		(4,544	)		17,386			18,079
Basic earnings per share - $		(0.24	)		1.36			1.49
Diluted earnings per share - $		(0.24	)		1.35			1.48

Basic earnings are adjusted for the amounts that accrue to other equity holders of subsidiaries upon the full distribution of post-acquisition earnings to shareholders.

Diluted earnings are calculated on the basis that the unpaid ownership interests of Blanket Mine’s indigenous shareholders are effectively treated as options whereby the weighted average fair value for the period of the Blanket Mine shares issued to the indigenous shareholders and which are subject to settlement of the loan accounts is compared to the balance of the loan accounts and any excess portion is regarded as dilutive. The difference between the number of Blanket Mine shares subject to the settlement of the loan accounts and the number of Blanket Mine shares that would have been issued at the average fair value, is treated as the issue of shares for no consideration and regarded as dilutive shares. The calculated dilution is taken into account with additional earnings attributable to the dilutive shares in Blanket Mine, if any. The interest of the NIEEF shareholding was anti-dilutive (i.e., the value of the options was less than the outstanding loan balance).  Accordingly, there was no adjustment to fully diluted earnings attributable to shareholders.

28 Non-controlling interest

Blanket Mine’s (incorporated in Zimbabwe) NCI share is recognised at an effective share and voting rights of 13.2% (2022: 13.2%, 2021: 13.2%) based on summarised results as follows:

	2023			2022			2021
Current assets		33,126			30,397			33,634
Non-current assets		188,134			172,611			154,003
Current liabilities		(10,277	)		(9,583	)		(17,261	)
Non-current liabilities		(10,901	)		(8,062	)		(11,535	)
Net assets of Blanket Mine (100%)		200,082			185,363			158,841
Carrying amount of NCI of 13.2% (2022: 13.2%, 2021: 13.2%)		24,477			22,409			19,260
Revenue		146,314			142,082			121,329
Profit after tax		27,215			38,389			35,911
Total comprehensive income of Blanket Mine (100%)		27,215			38,389			35,911
Profit allocated to NCI of 13.2% (2022: 13.2%, 2021: 13.2%)		3,580			4,963			4,737
Dividend allocated to NCI of 13.2% (2022: 13.2%, 2021: 13.2%)		(1,512	)		(1,814	)		(2,001	)
Net cash inflow from operating activities		28,087			50,048			41,489
Net cash outflow from investing activities		(28,146	)		(37,798	)		(29,850	)
Net cash outflow from financing activities		(5,017	)		(16,506	)		(12,817	)
Net cash outflow		(5,076	)		(4,256	)		(1,178	)

63

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

29 Provisions

Site restoration

Site restoration relates to the estimated cost of closing down the mines and projects and represent the site and environmental restoration costs, estimated to be paid as a result of mining activities or previous mining activities. For the Blanket Mine site restoration costs are capitalsed in property, plant and equipment with an increase in the provision at the net present value of the estimated future and inflated cost of site rehabilitation. Subsequently the capitalized cost are amortised over the life of the mine and the provision is unwound over the period to estimated restoration. For properties in the exploration and evaluation phase, such as the Bilboes, Maligreen and Motapa projects, site restoration costs are capitalised in exploration and evaluation assets with an increase in the provision at the undiscounted value of the estimated cost of site rehabilitation. Subsequently the costs capitalised are not amortised and the provision is not unwound.

Reconciliation of site restoration provision	2023		2022
Blanket Mine
Balance January 1		2,823		3,159
Unwinding of discount (note 17)		109		132
Change in estimate (Blanket Mine) (note 18)		1,834		(468	)
Balance December 31		4,766		2,823
Motapa, Maligreen and Bilboes
Balance January 1		135		135
Change in estimate (Motapa) (note 17)		1,466		–
Change in estimate (Maligreen) (note 17)		152		–
Acquisition - (Bilboes) (note 5)		4,466		–
Balance December 31		6,219		135
Total balance December 31		10,985		2,958
Current		–		–
Non-current		10,985		2,958
		10,985		2,958

The discount rate in calculating the present value of the Blanket Mine provision is 4.14% (2022: 4.14%) and is based on a risk-free rate and cash flows are estimated at an average 2.40% inflation (2022: 2.40%). The gross rehabilitation costs, before discounting, amounted to $5,629 (2022: $3,137) for Blanket Mine as at December 31, 2023. 

The undiscounted gross rehabilitation costs for exploration and evaluation assets as at December 31, 2023, amounted to $4,466 (2022: $Nil) for Bilboes Holdings, $1,466 (2022: $Nil) for Motapa and $287 (2022: $135) for Maligreen.

64

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

29 Provisions (continued)

(a) Change in estimate

Amounts recorded for restoration and rehabilitation provision require management to estimate the future costs the Group will incur to complete the reclamation and remediation work required to comply with applicable laws and regulations as well as taking into consideration the timing of the reclamation activities and estimated discount rate.  Future changes to environmental laws and regulations could increase the extent of reclamation and remediation work required to be performed by the Group. Increases in future costs could materially impact the amounts charged to operations for reclamation and remediation. The provision represents management’s best estimate of the present value of the future reclamation and remediation costs.

(i) Motapa and Maligreen

Management performed a revised rehabilitation liability cost estimate during the fourth quarter of 2023.

The revised provision estimate of Motapa and Maligreen were capitalised as exploration and evaluation assets. The effect of the change in estimation was as follows:

Increase in provision as at December 31, 2023
Motapa	1,466
Maligreen	152
	1,618

30 Loan note instruments

Loan note instruments - finance costs		2023		2022
Motapa loan notes	30.1		619		302
Solar loan notes	30.2		549		–
			1,168		302

Loan note instruments - financial liabilities		2023		2022
Motapa loan notes	30.1		–		7,104
Solar loan notes	30.2		7,112		–
			7,112		7,104
Current			665		7,104
Non-current			6,447		-
			7,112		7,104

65

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

30 Loan note instruments (continued)

30.1 Motapa loan notes payable

On November 1, 2022 Caledonia, in connection with the Share Purchase Agreement, executed a loan note instrument to issue loan notes (“Loan note” or “Notes”) to Bulawayo Mining to acquire all the shares of Motapa Mining Company UK Limited (“Motapa”), along with its wholly owned subsidiary Arraskar Investments (Private) Limited (“Arraskar”). The shares were purchased with full title guarantee and free from all encumbrances, together with all rights attached or accruing to them. The Loan note certificates were issued by Caledonia on November 1, 2022.

The aggregate principal amount of the Loan notes were limited to US$7.25 million. Interest on the Loan notes was compounded monthly an interest rate of 13% per annum. Interest was payable on the principal amount of the Loan notes outstanding from time to time from the issue date of the Loan notes until the date of redemption of the Loan notes at the interest rate. $5 million of the loan notes was paid on March 31, 2023, and $2.25 million on June 30, 2023.  $575 of the loan notes were paid on July 3, 2023 as agreed between Caledonia and each of the noteholders due to bank holidays in certain jurisdictions.

All Loan notes repaid by Caledonia were immediately cancelled and were not reissued.

The fair value of the Loan notes payable at inception was estimated to be $6,802 using the market approach method. The effective interest rate on the Loan notes was estimated to be 12.75% per annum.  The Loan notes were subsequently measured at amortised cost.

A summary of the Loan notes payable was as follows:

	2023			2022
Balance January 1		7,104			-
Fair value November 1, 2022		–			6,802
Finance cost accrued		619			302
Repayment - principal		(7,250	)		-
Repayment – finance cost paid		(473	)		-
Balance December 31		-			7,104
Current		-			7,104
Non-current		-			-
		-			7,104

Refer to note 17 for more information on the exploration and evaluation asset acquired.

66

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

30 Loan note instruments (continued)

30.2 Solar loan notes

Following the commissioning of Caledonia’s wholly owned solar plant on February 2, 2023, the decision was taken to optimise the capital structure of the Group and provide additional debt instruments to the Zimbabwean financial market by way of issuing loan notes pursuant to a loan note instrument (“bonds”). The bonds were issued by the Zimbabwean registered entity owning the solar plant, Caledonia Mining Services (Private) Limited. The bonds carry a fixed interest rate of 9.5% payable bi-annually and have a tenure of 3 years from the date of issue. The bond repayments are guaranteed by the Company. $7 million of bonds were in issue at the date of approval of these financial statements. All bonds were issued to Zimbabwean registered commercial entities.

A summary of the bonds is as follows:

	2023			2022
Balance January 1		–			–
Amounts received		7,000			–
Transaction costs		(105	)		–
Finance cost accrued		549			–
Repayment - finance cost paid		(332	)		–
Balance December 31		7,112			–
Current		665			–
Non-current		6,447			–
		7,112			–

31 Trade and other payables

	2023		2022
Trade payables		6,166		3,502
Electricity accrual		2,676		2,386
Audit fee		395		284
Dividends due		1,048		1,883
Solar plant supplier accrual		–		1,852
Bilboes oxide project payable		–		872
Other payables		692		651
Financial liabilities		10,977		11,430
Production and management bonus accrual - Blanket Mine		214		287
Other employee benefits - other		2,229		982
Other employee benefits - settlements		1,588		–
Leave pay		2,655		2,462
Bonus provision		190		1,025
Accruals		2,650		1,268
Non-financial liabilities		9,526		6,024
Total		20,503		17,454

67

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

32 Cash flow information

Non-cash items and information presented separately on the statements of cash flows statement:

	2023			2022			2021
Operating profit		15,177			40,276			38,360
Adjustments for:
Impairment of property, plant and equipment (note 18)		877			8,209			497
Impairment of exploration and evaluation assets (note 17)		–			467			3,837
Impairment of solar plant - VAT and duty receivables		720			–			–
Unrealised foreign exchange gains (note 13)		(4,217	)		(12,736	)		(2,754	)
Cash-settled share-based expense (note 12.1)		463			609			477
Cash-settled share-based expense included in production costs (note 12.1)		660			853			692
Cash portion of cash-settled share-based expense		(1,695	)		(1,468	)		(420	)
Equity-settled share-based expense (note 11.2)		640			484			–
Depreciation (note 18)		14,486			10,141			8,046
Fair value loss on derivative instruments (note 14)		1,119			401			240
Profit on disposal of property, plant and equipment (note 18)		33			–			–
Derecognition of property, plant and equipment		–			–			(38	)
Write down of inventory		283			563			–
Expected credit losses on deferred consideration on the disposal of subsidiary		–			–			761
Cash generated from operations before working capital changes		28,546			47,799			49,698
Inventories		(2,182	)		1,915			(4,016	)
Prepayments		338			(1,375	)		(4,272	)
Trade and other receivables		(1,910	)		(1,561	)		(4,746	)
Trade and other payables		1,606			2,879			2,039
Cash generated from operations		26,398			49,657			38,703

68

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

33 Financial Instruments and risk management

The Group has exposure to the following risks from its use of financial instruments:

● Credit risk;

● Liquidity risk;

● Market risk

This note present information about the Group’s exposure to each of the above risks and the Group’s objectives, policies and processes for measuring and managing risk. Further quantitative disclosures are included throughout these consolidated financial statements. The Group is exposed in varying degrees to a variety of financial instrument related risks by virtue of its activities. The overall financial risk management program focuses on the preservation of capital and protecting current and future Group assets and cash flows by reducing exposure to risks posed by the uncertainties and volatilities of financial markets.

The Board of Directors has the responsibility to ensure that an adequate financial risk management policy is established and to approve the policy. The Group’s Audit Committee oversees management’s compliance with the Group’s financial risk management policy.

Gold price hedges were entered into to manage the possible effect of gold price fluctuations. The derivative financial instrument was entered into by the Company for economic hedging purposes and not as a speculative investment. The fair value of the Group’s financial instruments approximates their carrying value due to the short period to maturity.

The types of risk exposure and the way in which such exposures are managed are described below:

(a) Credit risk

Exposure to credit risk

Credit risk includes the risk of a financial loss to the Group if a gold sales customer fails to meet its contractual obligation.

The carrying amount of financial assets as disclosed in the statements of financial position and related notes represents the maximum credit exposure. The maximum exposure to credit risk for trade and other receivables at the reporting date by geographic region was:

Carrying amount	2023		2022
Zimbabwe		4,215		9,059
Jersey, Channel Islands		–		–
Other regions		1,618		1
		5,833		9,060

Of the trade receivables balance at the end of the year, $3,110 (2022: $Nil) is due from AEG, the Group’s largest customer. Apart from this, the Group does not have significant credit risk exposure to any single counterparty. The Group’s credit risk over trade receivables is significantly reduced as Fidelity has never paid outside of their contractually agreed credit terms.

69

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

33 Financial Instruments and risk management (continued)

(b) Liquidity risk

Liquidity risk is the risk that the Group does not have sufficient financial resources available to meet its obligations as they fall due. The Group manages its liquidity risk by ensuring sufficient cash availability to meet its likely cash requirements, after taking into account cash flows from operations and the Group’s holdings of cash and cash equivalents. The Group believes that these sources will be sufficient to cover the anticipated cash requirements. Senior management is also actively involved in the reviewing and approving of planned expenditures by regularly monitoring cash flows from operations and anticipated investing and financing activities.

The following are the contractual maturities of financial liabilities, including contractual interest payments.

Non-derivative financial liabilities

December 31, 2023	Carrying amount		Total contractual cashflow amount		12 months or less
Trade and other payables		10,977		10,977		10,977
Loan note payable		7,112		8,663		665
Lease liabilities		208		217		175
Overdraft and term loans		17,740		17,740		17,740
		36,037		37,597		29,557
December 31, 2022	Carrying amount		Total contractual cashflow amount		12 months or less
Trade and other payables		11,430		11,430		11,430
Loan note payable		7,104		7,723		7,723
Lease liabilities		313		342		152
Overdraft and term loans		5,239		5,239		5,239
		24,086		24,734		24,544

The Group regularly monitors its liquidity risk and evaluates the options available.

Sensitivity analysis

A reasonably possible strengthening (weakening) of the gold price will have an impact on the revenue of the Group and the fair value of the gold options at December 31, 2023.  This would have affected the measurement of financial instruments by the amounts as indicated below. This analysis assumes that all other variables remain constant.

70

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

33 Financial Instruments and risk management (continued)

(b) Liquidity risk (continued)

Sensitivity analysis (continued)

An increase or decrease of 5% of the gold price would have the following equal or opposite effect on the derivative financial instruments on December 31:

Consolidated statement of financial position:

	2023		2022
Derivative financial assets - Put option
Increase by 5% of the gold price		-		-
Decrease by 5% of the gold price		4		22

Consolidated statement of profit or loss and other comprehensive income:

Fair value loss on derivative financial instruments	2023		2022
Derivative financial assets - Put option
Increase by 5% of the gold price		-		-
Decrease by 5% of the gold price		4		22

The Group’s revenues had full exposure to the gold price up to December 19, 2023 when the gold put option agreement was concluded (refer note 14.1).

(c) Market risk

(i) Currency risk

The Group is exposed to currency risk on inter-company sales and purchases that are denominated in a currency other than the respective functional currencies of Group entities. The Group does not use financial instruments to hedge its exposure to currency risk. To reduce exposure to currency transaction risk, the Group regularly reviews the currency (i.e. RTGS$ or foreign currency) in which it spends its cash to identify and avoid specific expenditures in currencies that experience inflationary pressures. The Group aims to maintain cash and cash equivalents in US Dollars to manage foreign exchange exposure.

The fluctuation of the US Dollar in relation to other currencies that entities within the Group may transact in will consequently have an effect upon the profitability of the Group and may also effect the value of the Group’s assets and liabilities. As noted below, the Group has certain financial assets and liabilities denominated in currencies other than the functional currency of the Company. To reduce exposure to currency transaction risk, the Group regularly reviews the currency in which it spends its cash to identify and avoid specific expenditures in currencies that experience inflationary pressures.  Further, the Group aims to maintain cash and cash equivalents in US Dollars to avoid foreign exchange exposure and to meet short‐term liquidity requirements.

71

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

33 Financial Instruments and risk management (continued)

(c) Market risk (continued)

(i) Currency risk (continued)

Sensitivity analysis

As a result of the Group’s monetary assets and liabilities denominated in foreign currencies which is different to the functional currency of the underlying entities, the profit or loss and equity in the underlying entities could be affected by movements between the functional currency and the foreign currency. The table below indicates consolidated monetary assets/(liabilities) in the Group that have a different functional currency and foreign currency.

	2023				2022
	$'000				$'000
	Functional currency				Functional currency
	ZAR		$		ZAR		$
Cash and cash equivalents		62	4,706			62	3,443
USD denominated		61	-			62	-
ZAR denominated		-	989			-	631
RTGS$ denominated		-	3,424			-	2,502
GBP denominated		1	293			-	235
CAD denominated		-	-			-	75
Trade and other receivables - RTGS$ denominated		-	3,118			-	2,607
Trade and other payables - RTGS$ denominated		-	(106	)		-	(130	)
Overdraft and term loans - RTGS$ denominated		-	-			-	-
		62	7,718			62	5,920

A reasonably possible strengthening or weakening of 5% of the various functional currencies against the foreign currencies would have the following equal or opposite effect on profit or loss and equity for the Group:

	2023				2022
	$'000				$'000
	Functional currency				Functional currency
	ZAR		$		ZAR		$
Cash and cash equivalents		3	177			3	134
Trade and other receivables		-	148			-	124
Trade and other payables		-	(5	)		-	(6	)
Overdraft and term loans		-	-			-	-
		3	320			3	252

(ii) Interest rate risk

The Group's interest rate risk arises from loans and borrowings, overdraft facility, short term loans and cash held. The loans and borrowings, overdraft facility and cash held have variable interest rates. Variable rates expose the Group to cash flow interest rate risk. The Group has not entered into interest rate swap agreements and mitigates the interest rate risk by remaining in a positive consolidated net cash position.

72

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

33 Financial Instruments and risk management (continued)

(c) Market risk (continued)

(ii) Interest rate risk (continued)

The Group’s assets and liabilities exposed to interest rate fluctuations as at year end is summarised as follows:

	2023			2022
Cash and cash equivalents		6,708			6,735
Overdraft and term loans		(17,740	)		(5,239	)
		(11,032	)		1,496

Interest rate risk arising from borrowings is offset by interest from available cash and cash equivalents. The table below summarises the effect of a change in finance cost on the Group’s profit or loss and equity, had the rates charged differed.

Sensitivity analysis - Cash and cash equivalents	2023			2022
Increase by 100 basis points		67			67
Decrease by 100 basis points		(67	)		(67	)
Sensitivity analysis - Overdraft
Increase by 100 basis points		177			52
Decrease by 100 basis points		(177	)		(52	)

34 Dividends

	2023		2022		2021
Dividends declared to owners of the Company		8,752		8,975		6,068
Dividends declared to NCI		1,512		1,814		2,001
		10,264		10,789		8,069

Dividends declared and paid to owners of the Company	8,752	7,178	6,068
Dividends declared and paid to NCI	550	1,728	2,001
Dividends declared and due to owners of the Company	-	1,797	-
Dividends declared and due to NCI	1,048	86	-
	10,350	10,789	8,069

A dividend was declared and paid in January 2024.

73

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

34 Dividends (continued)

Quarterly dividend per share history:

Declaration date	cents per share
January 14, 2021	11.0
April 15, 2021	12.0
July 15, 2021	13.0
October 14, 2021	14.0
January 13, 2022	14.0
April 18, 2022	14.0
July 14, 2022	14.0
October 13, 2022	14.0
December 30, 2022	14.0
April 3, 2023	14.0
June 29, 2023	14.0
September 28, 2023	14.0

35 Contingencies

The Group may be subject to various claims that arise in the normal course of business. Management believes there are no contingent liabilities to report.

36 Related parties

Directors of the company, as well as certain executives, are considered key management.  For entities within the Group refer to note 37.

Employee contracts between CMSA, CHZ, the Company and key management include an option for respective key management to terminate such employee contracts in the event of a change in control of the Company and to receive a severance payment equal to six months’ to two years’ compensation. If this was triggered as at December 31, 2023 the severance payment would have amounted to $7,809 (2022: $8,575, 2021: $8,214). A change in control would constitute:

● the acquisition of more than 50% of the shares; or

● the acquisition of the right to exercise the majority of the voting rights of shares; or

● the acquisition of the right to appoint the majority of the board of directors; or

● the acquisition of more than 50% of the assets of the Group.

74

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

36 Related parties (continued)

Key management personnel and director transactions:

A number of related parties transacted with the Group in the reporting period. The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows:

	2023		2022		2021
Key management salaries		3,102		2,076		2,234
Share-based awards* @		720		999		540
All other compensation &		2,599		1,697		1,011
		6,421		4,772		3,785

*	Amount inclusive of $104 (2022: $354, 2021: $123) classified as production costs.
@	Employees, officers, directors, consultants and other service providers also participate in the OEICP (see note 12.1).
&	The Company entered into a consultancy agreement with SR Curtis, a director of the Company, effective July 1, 2022 until December 31, 2023 at a monthly fee of $44.1 from July 1, 2022 until December 31, 2022 and $12.5 from January 1, 2023 until December 31, 2023. During the period ended December 31, 2023, the Company recorded $150 (2022: $265, 2021: $Nil) in consultancy fees.  The Company has extended Mr. Curtis’ consultancy agreement until December 31, 2025 at a monthly fee of $12.5.  Mr. Curtis is retiring as a director from the next annual general meeting (planned for May 7, 2024).
	Included is an amount of $647 (2022: $1,378, 2021: $1,011) that relates to bonuses provided or paid for in 2023.
	Included is an amount of $1,588 (2022: $54 (leave payout), 2021: $Nil) that relates to provision of a severance package payable in 2024

$30 rent was paid to a company of which V. Gapare is a director and that supplied office accommodation in Harare, Zimbabwe.

Group entities are set out in note 37.

Refer to note 6 and note 28 for transactions with NCI.

Refer to note 38 for management fees between CMSA and Blanket Mine.

Refer to note 30 for details of the bonds and the Loan notes which were guaranteed by the Company and by Greenstone Management Services Holdings (UK) Limited respectively.

Refer to note 11 for director fees.

All related party transactions occurred at arm’s length.

75

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

37 Group entities

Intercompany balances with holding company

	Activity of the company	Functional currency	Country of incorporation	Legal shareholding		Intercompany balances with holding company
				2023	2022	2023	2022
Caledonia Holdings Zimbabwe (Private) Limited	Services	$	Zimbabwe	100	100	(6,179)	(6,683)
Caledonia Mining Services (Private) Limited	Solar power provider	$	Zimbabwe	100	100	10,559	-
Fintona Investments Proprietary Limited	Dormant	ZAR	South Africa	100	100	14,860	14,859
Caledonia Mining South Africa Proprietary Limited	Procurement and services	ZAR	South Africa	100	100	(8,700)	(5,329)
Greenstone Management Services Holdings Limited	Investment holding	$	United Kingdom	100	100	(48,149)	(36,597)
Blanket Mine (1983) (Private) Limited (2)	Mining	$	Zimbabwe	64	64	(217)	561
Blanket Employee Trust Services (Private) Limited ("BETS") (1)	Employee trust	$	Zimbabwe	-	-	-	-
Motapa Mining Company UK Limited	Investment holding	$	United Kingdom	100	100	-	-
Arraskar Investments (Private) Limited	Exploration	$	Zimbabwe	100	100	-	-
Bilboes Gold Limited	Investment holding	$	Mauritius	100	-	-	-
Bilboes Holdings (Private) Limited	Gold project	$	United Kingdom	100	-	805	-
Caledonia Mining FZCO	Procurement	$	Dubai	100	-	61	-
Caledonia (Connemara) (Private) Limited	Dormant	$	Zimbabwe	100	100	-	-
Caledonia (Maligreen) (Private) Limited	Dormant	$	Zimbabwe	100	100	-	-
Caledonia (Bilboes & Motapa) (Private) Limited	Dormant	$	Zimbabwe	100	-	-	-

(1)	BETS and the Community Trust are consolidated as structured entities.
(2)	Refer to note 6 for the effective shareholding. NCI has a 13.2% (2022: 13.2%, 2021: 13.2%) interest in cash flows of Blanket only.

76

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

37 Group entities (continued)

Intercompany transactions with holding company

	Loans advanced/ (repaid)				Interest received			Foreign exchange profits
	2023		2022		2023		2022	2023	2022
Caledonia Holdings Zimbabwe (Private) Limited	(4	)	(424	)	508		536	–	–
Caledonia Mining Services (Private) Limited	10,016		–		543		–	–	–
Fintona Investments Proprietary Limited	–		–		–		–	–	–
Caledonia Mining South Africa Proprietary Limited	(3,591	)	(4,293	)	(455	)	–	675	370
Greenstone Management Services Holdings Limited	(9,103	)	(13,681	)	(2,449	)	–	–	–
Blanket Mine (1983) (Private) Limited	(760	)	(509	)	(18	)	40	–	–
Blanket Employee Trust Services (Private) Limited ("BETS")	–		–		–		–	–	–
Motapa Mining Company UK Limited	–		–		–		–	–	–
Arraskar Investments (Private) Limited	–		–		–		–	–	–
Bilboes Gold Limited	–		–		–		–	–	–
Bilboes Holdings (Private) Limited	805		–		–		–	–	–
Caledonia Mining FZCO	61		–		–		–	–	–
Caledonia (Connemara) (Private) Limited	–		–		–		–	–	–
Caledonia (Maligreen) (Private) Limited	–		–		–		–	–	–
Caledonia (Bilboes & Motapa) (Private) Limited	–		–		–		–	–	–
	(2,576	)	(18,907	)	(1,871	)	576	675	370

38 Operating Segments

The Group's operating segments have been identified based on geographic areas. The strategic business units are managed separately because they require different technology and marketing strategies. For each of the strategic business units, the Group’s CEO reviews internal management reports on at least a quarterly basis. Blanket Mine, Bilboes oxide mine, exploration and evaluation assets (“E&E projects”) and South Africa describe the Group's reportable segments. The Blanket operating segment comprises Caledonia Holdings Zimbabwe (Private) Limited, Blanket Mine (1983) (Private) Limited, Blanket’s satellite projects and Caledonia Mining Services (Private) Limited (“CMS solar”). The Bilboes oxide mine segment comprises the oxide mining activities. The E&E projects segment includes the exploration and evaluation activities of the Bilboes sulphide project as well as the Motapa and Maligreen projects. The South African segment represents the sales made by Caledonia Mining South Africa Proprietary Limited to the Blanket Mine. The holding company (Caledonia Mining Corporation Plc) and Greenstone Management Services Holdings Limited (a UK company) are responsible for corporate administrative functions within the Group and contribute to the strategic decision making process of the CEO and are therefore included in the disclosure below and combined with corporate and other reconciling amounts that do not represent a separate segment. Information regarding the results of each reportable segment is included below.

77

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

38 Operating Segments (continued)

Performance is measured based on profit before income tax, as included in the internal management report that is reviewed by the Group's CEO. Segment profit or exploration and evaluation cost is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. The accounting policies of the reportable segments are the same as the Group’s accounting policies.

Information about reportable segments

For the twelve months ended December 31, 2023	Blanket			South Africa			Bilboes oxide mine			E&E projects			Inter-group eliminations adjustments			Corporate and other reconciling amounts			Total
Revenue		140,615			–			5,699			–			–			–			146,314
Inter-segmental revenue		–			17,623			–			–			(17,623	)		–			–
Royalty		(7,318	)		–			(319	)		–			–			–			(7,637	)
Production costs		(68,923	)		(16,788	)		(13,095	)		–			16,097			–			(82,709	)
Depreciation		(15,385	)		(139	)		–			–			1,079			(41	)		(14,486	)
Other income		236			10			1			–			(1,750	)		1,766			263
Other expenses*		(4,353	)		–			(14	)		–			–			–			(4,367	)
Administrative expenses		(912	)		(4,301	)		(2,101	)		(8	)		17			(10,124	)		(17,429	)
Management fee		(3,468	)		3,471			–			–			(3	)		–			–
Cash-settled share-based expense		–			–			–			–			660			(1,123	)		(463	)
Equity-settled share-based expense		–			–			–			–			–			(640	)		(640	)
Net foreign exchange (loss) gain		(3,229	)		(144	)		97			–			(71	)		797			(2,550	)
Fair value loss on derivative liabilities		–			–			–			–			–			(1,119	)		(1,119	)
Finance income		–			39			–			–			–			–			39
Finance cost		(3,323	)		448			(189	)		(22	)		(2	)		64			(3,024	)
Profit (loss) before tax		33,940			219			(9,921	)		(30	)		(1,596	)		(10,420	)		12,192
Tax expense		(12,256	)		(235	)		–			–			(19	)		(300	)		(12,810	)
Profit (loss) after tax		21,684			(16	)		(9,921	)		(30	)		(1,615	)		(10,720	)		(618	)

* Other expenses include impairment of plant and equipment of $26 for Blanket and $851 for the Bilboes oxide mine, as well as impairment of the solar VAT and duty receivable amounting to $720 for Blanket.

78

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

38 Operating Segments (continued)

As at December 31, 2023	Blanket			South Africa			Bilboes oxide mine			E&E projects			Inter-group eliminations adjustments			Corporate and other reconciling amounts			Total
Segment assets:
Current (excluding intercompany, including assets held for sale)		51,236			2,363			–			401			(1,757	)		1,986			54,229
Non-current (excluding intercompany)		188,426			697			–			92,664			(5,294	)		(2,419	)		274,074
Assets held for sale (note 24)		13,519			–			–			–			–			–			13,519
Expenditure on property, plant and equipment (note 18)		43,496			120			–			–			(2,570	)		(11,440	)		29,606
Expenditure on evaluation and exploration assets (note 17)		–			–			–			76,693			–			–			76,693
Intercompany balances		44,452			16,844			(214	)		–			(145,523	)		84,441			–
Segment liabilities:
Current (excluding intercompany)		(31,747	)		(4,421	)		–			(1,755	)		–			(2,210	)		(40,133	)
Non-current (excluding intercompany)		(17,634	)		–			–			(5,932	)		4			(416	)		(23,978	)
Intercompany balances		(24,412	)		(34,193	)		–			(5,691	)		145,523			(81,227	)		–

For the twelve months ended December 31, 2022	Blanket			South Africa			E&E projects		Inter-group eliminations adjustments			Corporate and other reconciling amounts			Total
Revenue		142,082			–			–		–			–			142,082
Inter-segmental revenue		–			19,885			–		(19,885	)		–			–
Royalty		(7,124	)		–			–		–			–			(7,124	)
Production costs		(62,701	)		(18,883	)		–		18,586			–			(62,998	)
Depreciation		(10,735	)		(153	)		–		789			(42	)		(10,141	)
Other income		48			12			–		–			–			60
Other expenses*		(11,289	)		(66	)		–		–			(427	)		(11,782	)
Administrative expenses		(172	)		(3,047	)		–		–			(8,722	)		(11,941	)
Management fee		(3,454	)		3,454			–		–			–			–
Cash-settled share-based expense		–			–			–		853			(1,462	)		(609	)
Equity-settled share-based expense		–			–			–		–			(484	)		(484	)
Net foreign exchange gain (loss)		4,415			(119	)		–		(291	)		406			4,411
Fair value loss on derivative liabilities		–			–			–		–			(1,198	)		(1,198	)
Finance income		–			17			–		–			–			17
Finance cost		(861	)		(25	)		–		–			229			(657	)
Profit (loss) before tax		50,209			1,075			–		52			(11,700	)		39,636
Tax expense		(15,785	)		(252	)		–		117			(850	)		(16,770	)
Profit (loss) after tax		34,424			823			–		169			(12,550	)		22,866

* Other expenses include impairment of plant and equipment of $8,209 for Blanket, as well as impairment of the Connemara North of $720.

79

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

38 Operating Segments (continued)

As at December 31, 2022	Zimbabwe			South Africa			E&E projects		Inter-group eliminations adjustments			Corporate and other reconciling amounts			Total
Segment assets:
Current (excluding intercompany)		33,130			1,448			–		(83	)		3,932			38,427
Non-current (excluding intercompany)		176,356			822			5,626		(5,446	)		19,406			196,764
Expenditure on property, plant and equipment (note 18)		38,763			(881	)		872		(1,355	)		10,821			48,220
Expenditure on evaluation and exploration assets (note 17)		7,964			–			1,430		–			4			9,398
Intercompany balances		33,468			12,202			–		(107,227	)		61,557			–
Segment liabilities:
Current (excluding intercompany)		(17,451	)		(1,901	)		–		–			(13,089	)		(32,441	)
Non-current (excluding intercompany)		(8,197	)		(101	)		–		116			(1,109	)		(9,291	)
Intercompany balances		(12,725	)		(34,753	)		–		107,227			(59,749	)		–

Major customer

Revenues received from Fidelity amounted to $66,177 (2022: $142,082; 2021: $121,329) for the twelve months ended December 31, 2023.

The Group has made $80,137 (2022: $Nil, 2021: $Nil) of sales to AEG up to December 31, 2023, representing 41,117 ounces (2022: Nil ounces, 2021: Nil ounces). Management believes this new sales mechanism reduces the risk associated with selling and receiving payment from a single refining source in Zimbabwe. It also creates the opportunity to use more competitive offshore refiners and it may allow for the Company to raise debt funding secured against offshore gold sales.

The Bullion trade receivables outstanding have been paid in full, after the year end.

39 Defined Contribution Plan

Under the terms of the Mining Industry Pension Fund (“Fund”) in Zimbabwe, eligible employees contribute a fixed percentage of their eligible earnings to the Fund. Blanket Mine makes a matching contribution plus an inflation levy as a fixed percentage of eligible earnings of these employees. The total contribution by Blanket Mine for the year ended December 31, 2023 was $1,290 (2022: $1,022, 2021: $898).

40 Subsequent events

There were no significant subsequent events between December 31, 2023 and the date of issue of these financial statements other than included in the preceding notes to the consolidated financial statements.

80

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

41 Going concern

The directors have, at the time of approving these consolidated financial statements, a reasonable expectation that Caledonia has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing these consolidated financial statements.

81

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

Additional information

DIRECTORS AND OFFICERS at March 28, 2024

BOARD OF DIRECTORS	OFFICERS
J. L. Kelly (2) (3) (5) (7)	M. Learmonth (4) (5) (6) (7)
Non-executive Director	Chief Executive Officer
Connecticut, United States of America	Jersey, Channel Islands
S. R. Curtis (4) (5) (7)	C.O. Goodburn (5) (6)
Non-executive Director	Chief Financial Officer
Johannesburg, South Africa	Johannesburg, South Africa
J. Holtzhausen (1) (2) (3) (4) (5)	A. Chester (6) (7)
Chairman Audit Committee	General Counsel, Company Secretary and Head of
Non-executive Director	Risk and Compliance
Cape Town, South Africa	Jersey, Channel Islands
M. Learmonth (4) (5) (6) (7) Chief Executive Officer
Jersey, Channel Islands
N. Clarke (3) (4) (5) (7)	BOARD COMMITTEES
Non-executive Director	(1)  Audit Committee
East Molesey, United Kingdom	(2)  Compensation Committee
	(3)  Nomination and Corporate Governance
G. Wildschutt (1) (3) (5) (7)	Committee
Non-executive Director	(4)  Technical Committee
Johannesburg, South Africa	(5)  Strategic Planning Committee
	(6)  Disclosure Committee
G. Wylie (1) (2) (3) (4) (5)	(7)  ESG Committee
Non-executive Director
Malta, Europe
V. Gapare (4) (5) (7)
Executive Director
Harare, Zimbabwe
T. Gadzikwa (1) (2) (3) (5)
Non-executive Director
Johannesburg, South Africa

82

Caledonia Mining Corporation Plc

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

(in thousands of United States Dollars, unless indicated otherwise)

Additional information

CORPORATE DIRECTORY as at March 28, 2024

CORPORATE OFFICES	SOLICITORS
Jersey	Mourant Ozannes (Jersey)
Head and Registered Office	22 Grenville Street
Caledonia Mining Corporation Plc	St Helier
B006 Millais House	Jersey
Castle Quay	Channel Islands
St Helier
Jersey JE2 3NF	Borden Ladner Gervais LLP (Canada)
	Suite 4100, Scotia Plaza
South Africa	40 King Street West
Caledonia Mining South Africa Proprietary Limited	Toronto, Ontario M5H 3Y4
No. 1 Quadrum Office Park	Canada
Constantia Boulevard
Floracliffe	Memery Crystal LLP (United Kingdom)
South Africa	165 Fleet Street
	London EC4A 2DY
Zimbabwe	United Kingdom
Caledonia Holdings Zimbabwe (Private) Limited
P.O. Box CY1277	Dorsey & Whitney LLP (US)
Causeway, Harare	TD Canada Trust Tower
Zimbabwe	Brookfield Place
	161 Bay Street
Capitalisation (March 28, 2024)	Suite 4310
Authorised:                      Unlimited	Toronto, Ontario
Shares, Warrants and Options Issued:	M5J 2S1
Shares:                            19,194,525	Canada
Options:                                 20,000
	Gill, Godlonton and Gerrans (Zimbabwe)
SHARE TRADING SYMBOLS	Beverley Court
NYSE American - Symbol “CMCL”	100 Nelson Mandela Avenue
AIM - Symbol “CMCL”	Harare, Zimbabwe
VFEX - Symbol “CMCL”
	Bowman Gilfillan Inc (South Africa)
BANKER	11 Alice Lane
Barclays	Sandton
Level 11	Johannesburg
1 Churchill Place	2196
Canary Wharf
London E14 5HP	AUDITOR
	BDO South Africa Incorporated
NOMINATED ADVISOR	Wanderers Office Park
Cenkos Securities Plc	52 Corlett Drive
6.7.8 Tokenhouse Yard	Illovo 2196
London	South Africa
EC2R 7AS	Tel: +27(0)10 590 7200
MEDIA AND INVESTOR RELATIONS	REGISTRAR AND TRANSFER AGENT
BlytheRay Communications	Computershare
4-5 Castle Court	150 Royall Street,
London EC3V 9DL	Canton,
Tel: +44 20 7138 3204	Massachusetts, 02021
	Tel: +1 800 736 3001 or +1 781 575 3100

83

EX-99.2

Exhibit 99.2

CALEDONIA MINING CORPORATION PLC March 28, 2024

Management’s Discussion and Analysis         

This management’s discussion and analysis (“MD&A”) of the consolidated operating results and financial position of Caledonia Mining Corporation Plc (“Caledonia” or the “Company”) is for the quarter ended December 31, 2023 (“Q4 2023” or the “Quarter”) and for the year ended December 31, 2023 (the “Year”). It should be read in conjunction with the Audited Consolidated Financial Statements of Caledonia for the Year (the “Consolidated Financial Statements”) which are available from the System for Electronic Data Analysis and Retrieval at www.sedar.com or from Caledonia’s website at www.caledoniamining.com. The Consolidated Financial Statements and related notes have been prepared in accordance with IFRS Accounting Standards, as issued by the International Accounting Standards Board (“IFRS”). In this MD&A, the terms “Caledonia”, the “Company”, the “Group”, “we”, “our” and “us” refer to the consolidated operations of Caledonia Mining Corporation Plc and its subsidiaries unless otherwise specifically noted or the context requires otherwise.

Note that all currency references in this document are in US Dollars (also “$”, “US$” or “USD”), unless stated otherwise.

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Table of Contents

1.   OVERVIEW	3
2.   SUMMARY	3
3.   SUMMARY FINANCIAL RESULTS	8
4.   OPERATIONS	17
4.1   Safety, Health and Environment	17
4.1.1   Blanket	17
4.1.2   Bilboes oxide mine	17
4.2   Social Investment and Contribution to the Zimbabwean Economy – Blanket	18
4.3    Gold Production – Blanket	19
4.4   Underground – Blanket	20
4.5   Metallurgical Plant	20
4.6   Costs	21
4.7   Capital Projects – Blanket	24
4.8   Indigenisation	25
4.9   Bilboes	26
4.10   Zimbabwe Commercial Environment	27
4.11   Solar project	29
4.12   Opportunities and Outlook	30
5   EXPLORATION	32
6.   INVESTING	33
7.   FINANCING	33
8.   LIQUIDITY AND CAPITAL RESOURCES	34
9.   OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL COMMITMENTS AND CONTINGENCIES	35
10.   NON-IFRS MEASURES	35
11.   RELATED PARTY TRANSACTIONS	40
12.   CRITICAL ACCOUNTING ESTIMATES	40
13.   FINANCIAL INSTRUMENTS	43
14.   DIVIDEND HISTORY	44
15.   MANAGEMENT AND BOARD	45
16.   SECURITIES OUTSTANDING	45
17.   RISK ANALYSIS	45
18.   FORWARD LOOKING STATEMENTS	48
19.   CONTROLS	49
20.   QUALIFIED PERSON	49

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1.         OVERVIEW

Caledonia is a Zimbabwean focussed exploration, development, and mining corporation. Caledonia owns a 64% stake in the gold-producing Blanket mine (“Blanket”), and 100% stakes in the Bilboes oxide mine, the Bilboes sulphide project, the Motapa and Maligreen gold mining claims, all situated in Zimbabwe. Caledonia’s shares are listed on the NYSE American LLC (“NYSE American”), depositary interests in Caledonia’s shares are admitted to trading on AIM of the London Stock Exchange plc and depositary receipts in Caledonia’s shares are listed on the Victoria Falls Stock Exchange (“VFEX”) (all under the symbols “CMCL”).

2.         SUMMARY

	3 months ended December 31		12 months ended December 31		Comment
	2023	2022	2023	2022
Gold produced (oz)	20,878	21,049	78,466	80,775	Gold produced in the Quarter was 0.8% lower than the fourth quarter of 2022 (the “comparative” or “comparable quarter” or “Q4 2022”) and was 2.9% lower in the Year than the previous year, mainly due to the lower grade. 20,172 ounces of gold was produced at Blanket in the Quarter and 75,416 ounces for the Year. 706 ounces of gold were produced from the Bilboes oxide mine in the Quarter and 3,050 ounces for the Year. The Bilboes oxide mine was intended to be a small-scale, low-margin, short-term project. Mining and hauling activities were placed on care and maintenance at the end of September 2023. Leaching of the heap leach pads will continue while it makes a positive cash contribution to care and maintenance cost.
On-mine cost per ounce ($/oz)1	1,021	814	1,047	735	On-mine cost per ounce in the Quarter increased by 25.4% compared to the comparable quarter and increased by 42.4% for the Year compared to the previous year. 14% of the increase in the Quarter and 22% for the Year was due to the higher cost per ounce at the Bilboes oxide mine that has been placed on care and maintenance from September 30, 2023. The remainder of the increase was due to higher on-mine costs at Blanket due to increased labour cost and electricity cost that contributed approximately $73 per ounce to the overall increase in on-mine costs per ounce compared to the comparative quarter and $107 for the Year compared to the previous year.

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	3 months ended December 31		12 months ended December 31		Comment
	2023	2022	2023	2022
All-in sustaining cost (“AISC”) per ounce 1	1,735	964	1,445	878	The AISC per ounce in the Quarter increased by 80% and 64.6% for the Year compared to the comparative quarter and year, predominantly due to the higher on-mine cost per ounce and an increase in sustaining capital expenditure. The increase for the Quarter and the Year is due largely to the costs associated with Bilboes, increased sustaining capital expenditure due to the higher allocation of total capital expenditure towards sustaining rather than expansion project and once-off employee costs.   AISC includes the benefit of the solar plant electricity saving ($34 and $38 per ounce for the Quarter and Year respectively).
Average realised gold price ($/oz)1	1,922	1,714	1,910	1,772	The average realised gold price reflects international spot prices.
Gross profit2  ($’000)	10,556	11,358	41,482	61,819	Gross profit for the Quarter and Year decreased from the previous quarter and year, due to higher production costs, in particular at the Bilboes oxide mine in the Quarter and Year. Increased depreciation costs were incurred as a result of a shortening of the useful life of certain property, plant and equipment items at Blanket in the Year.
Net profit (loss) attributable to shareholders ($’000)	(3,162)	(8,029)	(4,198)	17,903	Net profit for the Quarter and Year was affected by increased production cost, higher depreciation and higher administrative expenses compared to the previous quarter and year. Net profit for the Year, in addition to the Quarterly increases, was negatively affected by foreign exchange losses versus foreign exchange gains in the previous year.
Basic IFRS (loss) earnings per share (“EPS”) (cents)	(17.6)	(62.2)	(24.4)	135.5	Basic IFRS EPS reflects the movement in IFRS profit attributable to shareholders and the effect of new shares issued in the first half of 2023.

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	3 months ended December 31		12 months ended December 31		Comment
	2023	2022	2023	2022
Adjusted EPS (cents)1	2.0	41.1	17.1	219.9	Adjusted EPS excludes inter alia net foreign exchange gains and losses, deferred tax and fair value movements on derivative financial instruments.
Net cash from operating activities ($’000)	3,376	6,824	14,769	42,616	The lower operating profit reduced net cash from operating activities in the Quarter and Year.
Net cash and cash equivalents ($’000)	(11,032)	1,496	(11,032)	1,496	Net cash decreased due to the Bilboes oxide mine cash consumption from operating activities and the higher operating cost at Blanket for the Quarter and the Year.

¹ Non-IFRS measures such as “On-mine cost per ounce”, “AISC”, “average realised gold price” and “adjusted EPS” are used throughout this document.  Refer to section 10 of this MD&A for a discussion of non-IFRS measures.

² Gross profit is after deducting royalties, production costs and depreciation but before administrative expenses, other income, interest and finance charges and taxation.

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Annual production at Blanket

Gold production at Blanket for the Quarter was 20,172 ounces and 75,416 ounces for the Year. Production represents a 4.2% decrease from the comparative quarter and a 6.6% decrease from the prior year and was within the annual production guidance for Blanket for the year ended December 31, 2023.

Production and cost guidance for the year ending December 31, 2024 is between 74,000 and 78,000 ounces at an on-mine cost per ounce of between $870 and $970 and an all-in sustaining cost per ounce of between $1,370 and $1,470.

Bilboes Feasibility Study

Work to refresh the existing feasibility study for the large-scale sulphide project at Bilboes is well-advanced.  Management is considering alternative development paths for Bilboes, which may include a phased approach to the development of the project, with a view to optimising capital allocation and maximising the uplift in value for Caledonia shareholders. The preparation of a feasibility study for an alternative phased approach, requires a completely new approach which takes longer to prepare than the work to refresh the existing large-scale study.   

Bilboes oxide mine on care and maintenance

The Bilboes oxide mine was planned as a small-scale, low-margin, short-term project with the primary objective to cover the holding cost of Bilboes before the start of the larger sulphide project. Due to the oxide mining activities incurring losses, it returned to care and maintenance with effect from September 30, 2023 following which the costs at Bilboes reduced from approximately $1 million per month to $200,000 per month, being the costs of security and other care and maintenance costs. Leaching of the material on the heap leach pad has continued and resulted in production of 706 ounces of gold in the Quarter.  Leaching will continue for as long as the costs of the continued leaching activities make a positive cash contribution. Oxide mining will resume when the stripping of the waste for the sulphide project commences. Holding costs of security, labour and other care and maintenance costs are expected to amount to $200,000 per month in 2024. The Company withdrew guidance in April 2023 for the Bilboes oxide mine. 

Proposed solar sale

Due to the unique operating environment in Zimbabwe and Caledonia’s significant in-country expertise, Caledonia opted to build the solar plant using its own resources rather than relying on an external party to build and own the solar plant by using its own financial resources and selling the resultant power to Blanket on a long-term contract. Accordingly, Caledonia constructed the solar plant at a cost of $14.2 million. As the solar plant is now fully commissioned and is working as planned, Caledonia no longer needs to own the solar plant, provided it retains long term access to the power it produces.

In the second quarter of 2023 management embarked on a process to sell the solar plant. Various offers were received, and a bidder has been given exclusivity to further negotiate the sale of the plant after proving their ability to operate and fund solar plants of similar size and complexity. Management is in an advanced stage of finalising the contractual arrangements to sell the solar plant under which the new owners will exclusively supply Blanket with electricity from the plant, on a take-or-pay basis. This transaction is expected to realise a profit on Caledonia's investment in the plant, and release cash for reinvestment in Caledonia’s core business of gold mining that yields higher returns to our shareholders. 

Encouraging drilling results at Blanket

The ongoing underground drilling program at Blanket targeted the Eroica, Blanket and AR south ore bodies and has yielded encouraging results which were published on July 10, 2023 and January 30, 2024. Total drilling for 2023 was 13,280 metres and the results indicate that the existing Blanket, Eroica and AR South ore bodies have grades and widths which are generally better than expected. In due course, this new information will be reflected in a revised resource statement and an updated technical report in respect of Blanket. Exploration is discussed further in section 5.

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Change in management and directors

On November 17, 2023 Caledonia announced that Mr Roets would step down from his role as Chief Operating Officer with effect from February, 29 2024 and that he would step down from his role as a director of the Company on that date. The process is well-advanced to appoint a replacement.

On March 18, 2024 Caledonia announced that Tariro Gadzikwa has joined the Board of Directors as an Independent Non-Executive Director with effect from March 15, 2024.

It also announces that Steve Curtis, who retired as Chief Executive Officer of the Company in June 2022 and remained on the Board as a Director in a non-executive capacity since then, has decided to step down from the Board and as such will not be seeking re-appointment as a Director at the next annual general meeting. He will therefore leave the Board with effect from the next annual general meeting of the Company.

Strategy and Outlook:  increased focus on growth opportunities

The immediate strategic focus is to:

● maintain production at Blanket at the targeted range of 74,000 - 78,000 ounces for 2024 and at a similar level for 2025;

● complete a revised resource and reserve statement thereby extending the life of mine at Blanket;

● complete the Caledonia feasibility study on the Bilboes sulphide project to determine the best implementation strategy and estimate the funding requirements, and commence development of the sulphide project; and

● continue with exploration activities at Motapa.

The strategy and outlook of Caledonia is further discussed in section 4.12 of this MD&A.

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3.         SUMMARY FINANCIAL RESULTS

The table below sets out the consolidated profit or loss for the Quarter, 12 months to December 31, 2023 and the respective comparative periods prepared under IFRS.

Condensed Consolidated Statements of profit or loss and Other comprehensive income
($’000’s)
	3 months ended December 31									12 months ended December 31
	2023			2022			2023			2022			2021
Revenue		38,661			34,178			146,314			142,082			121,329
Royalty		(1,987	)		(1,716	)		(7,637	)		(7,124	)		(6,083	)
Production costs		(21,681	)		(18,335	)		(82,709	)		(62,998	)		(53,126	)
Depreciation		(4,437	)		(2,769	)		(14,486	)		(10,141	)		(8,046	)
Gross profit		10,556			11,358			41,482			61,819			54,074
Other income		136			43			263			60			46
Other expenses		(1,567	)		(9,947	)		(4,367	)		(11,782	)		(7,136	)
Administrative expenses		(5,539	)		(3,873	)		(17,429	)		(11,941	)		(9,091	)
Cash-settled share-based expense		(165	)		(274	)		(463	)		(609	)		(477	)
Equity-settled share-based expense		(76	)		(308	)		(640	)		(484	)		-
Net foreign exchange (loss) gain		(216	)		(2,229	)		(2,550	)		4,411			1,184
Net derivative financial instrument expenses		(529	)		(38	)		(1,119	)		(1,198	)		(240	)
Operating profit (loss)		2,600			(5,268	)		15,177			40,276			38,360
Net finance costs		(653	)		(340	)		(2,985	)		(640	)		(361	)
Profit (loss) before tax		1,947			(5,608	)		12,192			39,636			37,999
Tax expense		(4,258	)		(2,719	)		(12,810	)		(16,770	)		(14,857	)
(Loss) profit for the period		(2,311	)		(8,327	)		(618	)		22,866			23,142
Other comprehensive income
Items that are or may be reclassified to profit or loss
Exchange differences on translation of foreign operations		156			396			(622	)		(462	)		(531	)
Total comprehensive income for the period		(2,155	)		(7,931	)		(1,240	)		22,404			22,611
(Loss) profit attributable to:
Owners of the Company		(3,162	)		(8,029	)		(4,198	)		17,903			18,405
Non-controlling interests		851			(298	)		3,580			4,963			4,737
(Loss) profit for the period		(2,311	)		(8,327	)		(618	)		22,866			23,142
Total comprehensive income attributable to:
Owners of the Company		(3,006	)		(7,633	)		(4,820	)		17,441			17,874
Non-controlling interests		851			(298	)		3,580			4,963			4,737
Total comprehensive income for the period		(2,155	)		(7,931	)		(1,240	)		22,404			22,611
(Loss) earnings per share (cents)
Basic (loss) earnings per share		(17.6	)		(62.2	)		(24.4	)		135.5			148.6
Diluted (loss) earnings per share		(17.6	)		(62.2	)		(24.4	)		135.4			148.5
Adjusted earnings per share (cents)
Basic		2.0			41.1			17.1			219.9			225.9
Dividends paid per share (cents)		14.0			14.0			56.0			70.0			50.0

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Revenue in the Quarter was 13.1% higher than the comparative quarter due to a 0.9% increase in the quantity of gold sold and a 12.2% increase in the average realised price of gold sold. Revenue for the Year was 3% higher than in 2022 due to a 7.8% increase in the average realised price of gold sold, offset by 4.4% lower ounces sold in the Year compared to 2022.  Sales in the Quarter exclude 3,057 ounces of gold that was held in work-in-progress at December 31, 2023 and which were sold early in January 2024.

The royalty rate payable to the Zimbabwe Government was unchanged at 5%.

Production costs comprise the costs of electricity, labour and administrative and other costs such as insurance, software licencing and security that are directly related to production.

Analysis of IFRS Production Costs between Blanket and Bilboes ($’000’s)
	3 months ended December 31				12 months ended December 31
	2023		2022		2023		2022
Blanket		19,454		18,335		69,591		62,998
Bilboes		2,227		-		13,118		-
Total		21,681		18,335		82,709		62,998

Total production costs increased by 18.2% in the Quarter compared to the comparative quarter; production costs for the Year increased by 31.3% compared to 2022. At Blanket, production cost increased by 6.1% in the Quarter compared to the comparative quarter and by 10.5% for the Year.  The on-mine cost per ounce increased by 25.4% in the Quarter from the comparable quarter and 42.4% for the Year compared to 2022.  

Production costs are detailed in note 9 to the Consolidated Financial Statements and exclude the procurement margin that is paid to CMSA and the intercompany profit arising on the sale of power from solar plant to Blanket.

Analysis of IFRS Production Costs at Blanket ($’000’s)
	3 months ended December 31				12 months ended December 31
	2023		2022		2023		2022
Salaries and Wages		6,281		6,195		25,042		23,037
Consumables		5,408		6,587		24,087		23,912
Electricity		4,486		2,708		13,496		9,634
Other i		3,279		2,845		6,966		6,415
Total		19,454		18,335		69,591		62,998
i. “Other” comprises safety, cash-settled share-based payments, on-mine administration, security, provision for obsolete inventory, software licencing and pre-feasibility exploration costs

Salaries and wages at Blanket for the Year increased by 8.7% compared to 2022. The yearly increase was due to an increase in the operational headcount at Blanket of 81 employees, a 4% average salaries and wages increase and increased overtime of $1 million. The yearly increase was offset by lower production bonuses of $247,000 for the year. Salaries and wages in the Quarter were 1.4% higher compared to the comparable quarter predominantly due to increased headcount and salary rate increases offset by lower production bonuses.

Consumables cost comprises variable consumables such as explosives, drill-steels, cyanide and grinding media and fixed consumables such as day to day spare parts for equipment such as pumps, generators, mills, CIL tanks and vehicles. The cost of consumables for the Year is comparable with the 2022 cost. Consumable costs in the Quarter were 17.9% lower compared to the comparable quarter due to the lower equipment breakdowns of equipment in the Quarter.

Electricity costs comprise the cost of grid power, the cost of electricity generated by Blanket’s generators and the cost of solar power which Blanket purchases from a wholly-owned subsidiary of Caledonia. The cost of electricity for the Year increased by 40.1% compared to 2022; electricity costs in the Quarter were 65.7% higher than the comparable quarter. During the Year and the Quarter, the benefit as a result of reduced use of the diesel generators and a lower tariff for grid-power was outweighed by higher electricity consumption and maximum demand use charges.  The table below indicates the electricity usage per source of supply from quarter 1 of 2022.

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KwH ($’000’s)	Q1 2022		Q2 2022		Q3 2022		Q4 2022		Q1 2023		Q2 2023		Q3 2023		Q4 2023
Utility		21,380		22,619		19,474		19,824		19,199		19,454		22,667		23,070
Diesel generators		1,736		1,630		6,036		3,887		535		1,257		1,331		1,284
Solar		-		-		-		-		6,622		6,615		6,145		5,026
Total		23,116		24,249		25,510		23,711		26,356		27,326		30,143		29,380

It is expected that overall electricity consumption will fall in the next few years as mining activities concentrate on the deeper levels of the mine that are serviced by the Central Shaft. This will allow older infrastructure such as the No 4 and Jethro shafts to be decommissioned rather than operating it alongside the new infrastructure. Management is also exploring other initiatives to reduce power consumption. Electricity costs at Blanket are discussed further in section 4.6 of the MD&A.

Other costs mainly comprise the costs of security, software licences the monitoring and implementation of safety procedures and on-mine administration. The cost for the Quarter and Year increased by $401,000 and $551,000 from the comparable quarter and year due to additional software licences purchased to digitise the Blanket Life of mine plan.        

Bilboes costs, in previous quarters of 2023, were higher than the Quarter due to contractor costs of moving waste and ore. As previously reported, in June 2023 it was decided to suspend oxide mining activities due to the high waste stripping ratio and lower than planned grades. The Bilboes oxide project was returned to care and maintenance in September 2023 reducing the waste and ore haulage cost. Mining and stripping activities were terminated and the number of employees and contractors were reduced. Leaching activities continued in the Quarter and in early 2024. Leaching activities are planned to continue for as long as it contributes to the Bilboes care and maintenance cost which is currently expected to be until the end of the first quarter of 2024. The Bilboes oxide project is discussed further in section 4.9 of this MD&A.    

Production costs, in conjunction with on-mine and all-in sustaining cost per ounce of gold sales are discussed in section 4.6; guidance for on-mine costs is included in Section 4.12.  

Administrative expenses are detailed in note 11 to the Consolidated Financial Statements and include the costs of Caledonia’s offices and personnel in Harare, Johannesburg, Bulawayo, the UK and Jersey which provide the following functions: technical services, finance, procurement, investor relations, corporate development, legal and company secretarial.

Analysis of Administrative expenses ($’000’s)
	3 months ended December 31				12 months ended December 31
	2023		2022		2023		2022
Investor relations		84		174		576		663
Advisory services		302		414		4,406		1,459
Listing fees		72		135		749		512
Directors (Caledonia and Blanket)		110		173		632		625
Wages & salaries		2,570		2,360		6,734		5,855
Settlements		1,686		-		1,784		-
Other		715		617		2,548		2,827
Total		5,539		3,873		17,429		11,941

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Administrative expenses in the Quarter were 43.0% higher than the comparative quarter predominantly due to increased salaries and wages and the settlement payable to the Chief Operating Officer.  Administrative expenses in the Year include a once-off $3.1 million paid as advisory services on conclusion of the Bilboes Gold Limited acquisition in January 2023. Excluding both of these costs, which are not expected to recur, administration expenses for the Year increased by 5.0% compared to 2022. Wages and salaries in the Year further increased following the absorption of certain administrative and executive functions following the completion of the Bilboes transaction; these resources have been deployed to work on the Bilboes feasibility study and have provided an enhanced degree of executive support in Harare. There has also been an increase in headcount in the Mineral Resource Management team in Johannesburg to support the implementation of a digital resource modelling and mine planning system. The digital mine planning system allows for enhanced mine planning analysis which have resulted in real-time amendments to the mine plan which have reduced expenditure on capital development planned for 2024 and is expected to result in further efficiencies in future years. An individual has also been recruited to improve the monitoring and reporting of the group’s environmental footprint in recognition of the increased stakeholder interest in this area.

The depreciation charge in the Quarter and the Year increased because of an increase in the depreciable cost base following the commissioning of the Central Shaft and the solar plant. A reassessment of the useful lives of certain plant and equipment items also increased the depreciation charge. The useful life of the Jethro Shaft reduced due to increased focus on optimally utilising the new Central Shaft in the future. Furthermore, the useful life of certain generators, load haul dumpers, dump trucks and drill rigs reduced due to their current condition (refer to note 18 of the Consolidated Financial Statements).

Other expenses are detailed in note 10 to the Consolidated Financial Statements. During the Quarter Community and social responsibility cost amounted to $1,504 and is further explained in section 4.2. VAT and duty receivables of $720 was impaired, in the Quarter, as a result of the Zimbabwe revenue authority not allowing VAT and duty rebates on solar imports for copper cables used to construct the solar plant. Other expenses include Intermediate Monetary Transaction Tax of $1,266 for the Year that is chargeable on the transfer of physical money, electronically or by any other means and ranges from 1% and 2% per transaction performed in Zimbabwe.

Net foreign exchange movements relate to gains and losses arising on monetary assets and liabilities that are held in currencies other than the USD – principally the RTGS$, but also the South African rand and the British pound.  The net foreign exchange loss in the Quarter was considerably lower than in the comparative quarter due to a decrease in RTGS$ denominated net monetary assets in 2023 compared to 2022. The net foreign exchange movement for the Year compared to the prior year was largely affected by a significant deterioration in the exchange rate in 2023 as set out in section 4.10 and the effect of changes in the calculation method of income and deferred taxes at Blanket, as mentioned below.

The tax expense comprised:

Analysis of consolidated tax expense for the Year
($’000’s)	Blanket		South Africa		UK		Bilboes and CHZ		Total
Income tax		6,740		35		-		-		6,775
Withholding tax
Management fee		-		169		-		-		169
Deemed dividend		398		-		-		-		398
CHZ dividends to GMS-UK		-		-		300		-		300
Deferred tax		5,136		32		-		-		5,168
		12,274		236		300		-		12,810

The overall effective taxation rate for the Quarter was 218.7% (2022: 48.5%) and for the Year it was 105.1% (2022: 42.3%). The effective tax rate bears little relationship to reported consolidated profit before tax as illustrated by the tax rate reconciliation, detailed in note 16 of the Consolidated Financial Statements. The effective tax rate is higher due to the following reasons:

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● operating losses incurred at the Bilboes oxide mine cannot be offset against profits arising elsewhere in the Group – thus they reduce consolidated profit before tax, with no commensurate reduction in the consolidated tax expense;

● Zimbabwean taxable income is calculated in both RTGS$ and USD, whereas the group reports in USD. Prior to January 1, 2023, taxable income was calculated on a RTGS$ functional currency trial balance and converted to USD. Large devaluations in the RTGS$ against the USD result in substantial foreign exchange movements on the RTGS$ tax payable which have a significant effect on the income tax calculation;

● 100% of capital expenditure is tax deductible in the year in which it is incurred for tax purposes, whereas depreciation only commences when a project enters production; timing differences can alter the effective tax rate based on the capital expenditure for a quarter;

● the Quarter’s tax expense includes the deferred tax adjustment of the Zimbabwean enacted tax rate that was increased from 24.72% to 25.75% effective January 1, 2024. The adjustment increased the deferred tax expense in the Quarter by $1.7 million; and

● the rate of income tax in Jersey, which is the tax domicile of the parent company of the Group (i.e. the Company), is zero which means there is no benefit to be realised by offsetting expenses incurred in Jersey against taxable profits.

The effective taxation rate for Blanket was 29% (2022: 27%), which broadly corresponds to the enacted Zimbabwean income tax rate applicable in the Year of 24.72%, amended to 25.75% for periods after January 1, 2024. From January 1, 2023 the Zimbabwean taxable income was calculated and paid in the currency of denomination of the underlying transaction and the taxable income translated to USD for reporting purposes. Prior to January 1, 2023 the taxable income was calculated in RTGS$ and the amount payable was translated on the same allocation basis as revenues were received. The result of the change was that there were smaller devaluations in the net deferred tax liability for the Year. Deferred tax predominantly comprises the difference between the accounting and tax treatments of capital investment expenditure. Most of the tax expense comprised income tax and deferred tax incurred in Zimbabwe.

South African income tax arises on intercompany profits arising at Caledonia Mining South Africa Proprietary Limited (“CMSA”).

Zimbabwe withholding tax arose on the management fees paid to CMSA and on dividends paid from Caledonia Holdings Zimbabwe (Private) Limited (“CHZ”) to the Company’s subsidiary in the UK Greenstone Management Services Holdings Limited (“GMS-UK”).

Basic IFRS EPS for the Quarter improved by 71.7% from a loss of 62.2 cents in the comparative quarter to a loss of 17.6 cents in the Quarter; Basic IFRS EPS for the Year declined by 118% from 135.5 cents in the prior year to a loss of 24.4 cents. Adjusted EPS for the Quarter excludes inter alia the effect of foreign net exchange movements and deferred tax. Adjusted EPS reduced by 95.1% from a profit of 41.1 cents in the comparative quarter to 2.0 cents for the Quarter. Adjusted EPS for the Year decreased by 92.2% from 219.9 cents to 17.1 cents. A reconciliation from Basic IFRS EPS to adjusted EPS is set out in section 10.3.

A dividend of 14 cents per share was paid in each quarter of 2023 and on January 26, 2024. Caledonia’s dividends are discussed further in section 14.

Risks that may affect Caledonia’s future financial condition are discussed in section 17.

12

The table below sets out the consolidated statements of cash flows for the years ended December 31, 2023, 2022 and 2021 prepared under IFRS.

Condensed Consolidated Statements of Cash Flows
($’000’s)
	12 months ended December 31
	2023			2022			2021
Cash inflow from operations		26,398			49,657			38,703
Interest received		39			17			14
Finance costs paid		(2,462	)		(192	)		(388	)
Tax paid		(9,206	)		(6,866	)		(7,426	)
Net cash inflow from operating activities		14,769			42,616			30,903
Cash flows used in investing activities
Acquisition of property, plant and equipment		(28,556	)		(41,495	)		(32,112	)
Acquisition of exploration and evaluation assets		(1,837	)		(2,596	)		(5,717	)
Proceeds from sale of assets held for sale		-			-			500
Proceeds from derivative financial instruments		178			-			1,066
Acquisition of put options		(946	)		(478	)		-
Proceeds from disposal of subsidiary		-			-			340
Proceeds from call options		-			416			208
Acquisition of call options		-			(176	)		-
Net cash used in investing activities		(31,161	)		(44,329	)		(35,715	)
Cash flows from financing activities
Dividends paid		(11,099	)		(8,906	)		(8,069	)
Payment of lease liabilities		(184	)		(150	)		(129	)
Shares issued – equity raise (net of transaction cost)		15,569			-			7,806
Repayment of term loans		-			-			(361	)
Loan note instrument – Motapa payment		(7,250	)		-			-
Loan note instrument – solar bond issue receipts (net of transaction cost)		6,895			-			-
Proceeds from gold loan		-			-			2,752
Repayment of gold loan		-			(3,698	)		-
Proceeds from share options exercised		-			-			165
Net cash from/(used in) financing activities		3,931			(12,754	)		2,164
Net decrease in cash and cash equivalents		(12,461	)		(14,467	)		(2,648	)
Effect of exchange rate fluctuations on cash and cash equivalents		(67	)		(302	)		(179	)
Net cash and cash equivalents at beginning of the period		1,496			16,265			19,092
Net cash and cash equivalents at end of the period		(11,032	)		1,496			16,265

Cash flows from operating activities in the Year is detailed in note 32 to the Consolidated Financial Statements. Cash inflows from operations before working capital changes in the Year were $28.5 million, compared to $47.8 million in the previous year.

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Cash flows from operations before working capital changes in the Quarter were in line with the comparable quarter. Cash flows from operations before working capital changes in the Year were 40.3% lower due to higher production cost in the Year. Blanket continued to make a positive cash contribution of $15.6 million (Q4 2022: $13.4 million); the Bilboes oxide mine contributed a cash outflow of $1 million (Q4 2022: nil).

The table below illustrates the operating cash flow each quarter in 2023 and for the Year for Blanket and Bilboes:

Operating cashflow (Excluding other group entities)
($'000's)	Q1 2023		Q2 2023		Q3 2023		Q4 2023		2023
	Blanket	Bilboes	Blanket	Bilboes	Blanket	Bilboes	Blanket	Bilboes	Blanket	Bilboes
Operating cash flow	(2,034)	(4,324)	6,896	(2,147)	15,324	(1,982)	7,901	(1,024)	28,087	(9,477)

The table above indicates the cash generated from operating activities at Blanket and at the Bilboes Oxide mine that was placed on care and maintenance. The cash generation at Blanket in quarter 3 and 4 improved as the production improved, and the ounces increased.

Finance costs paid in the Quarter and the Year increased due to overdraft interest of $0.7 million in the Quarter and $1.7 million in the Year (Q4 2022: $0.07 million; 2022: $0.2 million) to accommodate working capital fluctuations at Blanket. In addition, finance costs for the Year included interest of $0.6 million (2022: nil) related to the Motapa loan notes that were fully repaid on July 3, 2023. Loan notes issued by the company which owns the solar plant in the first half of 2023 contributed $0.1 million to finance costs in the Quarter and $0.5 million for the Year.

The acquisition of property, plant and equipment relates to the investment at Blanket as discussed further in section 4.7; the investment in exploration and evaluation assets relates to the exploration work at Motapa and Maligreen.

Dividends for the Year comprise $10.5 million paid to shareholders of the Company and $0.6 to Blanket’s minority shareholders as discussed in section 14. A dividend of 14 cents per share was announced on January 2, 2024.

The effect of exchange rate fluctuations on cash held reflects gains or losses on cash balances held in currencies other than the US Dollar. The effect on cash balances forms part of an overall foreign exchange gain or loss arising on all affected financial assets and liabilities.

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The table below sets out the consolidated statements of Caledonia’s financial position at the end of December 31, 2023, December 31, 2022 and December 31, 2021, prepared under IFRS.

Summarised Consolidated Statements of Financial Position
($’000’s)	As at	Dec 31 2023		Dec 31 2022		Dec 31 2021
Total non-current assets			274,074		196,764		157,944
Income tax receivable			1,120		40		101
Inventories			20,304		18,334		20,812
Derivative financial assets			88		440		-
Trade and other receivables			9,952		9,185		7,938
Prepayments			2,538		3,693		6,930
Cash and cash equivalents			6,708		6,735		17,152
Assets held for sale			13,519		-		-
Total assets			328,303		235,191		210,877
Total non-current liabilities			23,978		9,291		12,633
Cash-settled share-based payments – short term portion			920		1,188		2,053
Income tax payable			10		1,324		1,562
Lease liabilities – short term portion			167		132		134
Loan note instruments – short term portion			665		7,104		-
Trade and other payables			20,503		17,454		9,957
Derivative financial liabilities			-		-		3,095
Overdraft and term loans			17,740		5,239		887
Liabilities associated with assets held for sale			128		-		-
Total liabilities			64,111		41,732		30,321
Total equity			264,192		193,459		180,556
Total equity and liabilities			328,303		235,191		210,877

The acquisition of Bilboes increased the exploration and evaluation assets by $73.5 million for the Year ended December 31, 2023. Property, plant and equipment additions at Blanket amounted to $10.7 million in the Quarter, and $28.2 million for the Year. The additions predominantly related to infrastructure development at 30 and 34 level and the construction of the new tailings storage facility at Blanket (“TSF”).

Inventories include 3,056 ounces of gold which was held by Fidelity Gold Refinery (Private) Limited (“FGR”) in transit to Al Etihad Gold Refinery DMCC (“AEG”) which was sold in January 2024.

Prepayments represent deposits and advance payments for goods and services. Prepayments increased by $1.2 million due to RTGS$ suppliers requiring larger deposits to protect against a potential weakening of the RTGS$ rate against the USD.

Trade and other receivables are detailed in note 21 to the Consolidated Financial Statements and include $5.4 million (December 31, 2022: $7.4 million) due from FGR and AEG in respect of the RTGS$ and USD components respectively of the revenues arising on gold deliveries prior to the close of business on December 31, 2023. All outstanding amounts due from FGR and AEG were received in full after the end of the Year. $3.8 million (December 31, 2022: $1 million) was due from the Zimbabwe Government in respect of VAT refunds. The amount due in respect of VAT refunds mainly comprises RTGS$-denominated VAT refunds. Increased delays in the processing of VAT refunds by the Government of Zimbabwe has resulted in an increase in the amount receivable in RTGS$ terms. The long-outstanding balances have either been repaid after the end of the Year or have been recovered by way of offset against other tax payables due to the Government of Zimbabwe.

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The income tax receivable arose due to a high work in progress balance at year end approximating a gross sales value of $6 million that had been estimated as income for purposes of calculating the forecast tax payable for the year at Blanket at the time of payment. This receivable will be offset against income taxes payable in 2024.

Overdrafts are used for short-term working capital funding requirements in Zimbabwe. Expiration dates and terms of the overdrafts and short-term loans are set out in section 7 (Financing).

Most cash-settled share-based payments in relation to share based payments due to staff as at December 31, 2022 were settled in the first quarter of 2023. In April 2023 the Company made awards of 79,519 Performance Units (“PUs”), which can be settled in cash, and 93,035 equity-settled PUs (“EPUs”) to certain management and employees within the Group pursuant to the provisions of the 2015 Omnibus Equity Incentive Compensation Plan (“OEICP”). 102,678 PUs in total were awarded to certain management and employees within the Group during the Year. The short-term portion of the cash-settled share-based payment liability is in respect of awards made to certain employees at Caledonia, CMSA, CHZ and Blanket in terms of the OEICP. The awards (other than those made to certain executive officers (the “NEOs”) in 2023 which only settle in shares) can be settled in cash or, subject to conditions, shares at the option of the recipient.

The table below illustrates the distribution of the consolidated cash across the jurisdictions where the Group holds its cash:

Geographical location of net cash ($’000’s)
As at	Mar 31,			Jun 30,			Sep 30,			Dec 31,
	2023			2023			2023			2023
Zimbabwe		(9,749	)		(7,373	)		(8,052	)		(13,751	)
South Africa		1,107			834			1,208			1,051
UK/Jersey		11,831			3,632			3,652			1,668
Total net cash and cash equivalents		3,189			(2,907	)		(3,192	)		(11,032	)

Assets held for resale comprises the book value of the solar project which is the subject of an ongoing sale process as discussed in section 4.11.

The following information is provided for each of the eight most recent quarterly periods ending on the dates specified. The amounts are extracted from underlying financial statements that have been prepared using accounting policies consistent with IFRS.

($’000’s except per share amounts)	Mar 31,		Jun 30,		Sep 30,		Dec 31,			Mar 31,			Jun 30,			Sep 30,			Dec 31,
	2022		2022		2022		2022			2023			2023			2023			2023
Revenue		35,072		36,992		35,840		34,178			29,435			37,031			41,187			38,661
Profit/(loss) attributable to owners of the Company		5,940		11,378		8,614		(8,029	)		(5,029	)		(513	)		4,506			(3,162	)
EPS – basic (cents)		44.6		87.7		63.3		(62.2	)		(30.3	)		(0.6	)		24.1			(17.6	)
EPS – diluted (cents)		44.6		87.7		63.3		(62.2	)		(30.2	)		(0.6	)		24.0			(17.6	)
Net cash and cash equivalents		14,430		10,862		6,167		1,496			3,189			(2,907	)		(3,192	)		(11,032	)

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4.         OPERATIONS

4.1       Safety, Health and Environment

4.1.1    Blanket

The following safety statistics have been recorded for the Quarter and the preceding seven quarters.

Blanket Safety Statistics
Classification	Q1 2022		Q2 2022		Q3 2022		Q4 2022		Q1 2023		Q2 2023		Q3 2023		Q4 2023
Fatal		1		0		0		0		1		0		0		0
Lost time injury		0		2		1		1		0		5		2		2
Restricted work activity		0		1		1		2		6		7		5		0
First aid		2		3		0		0		1		0		0		0
Medical aid		6		3		1		2		4		0		1		2
Occupational illness		0		0		0		0		0		0		0		0
Total		9		9		3		5		12		12		8		4
Incidents		9		10		14		6		14		3		10		10
Near misses		4		7		6		1		4		4		4		7
Disability Injury Frequency Rate		0.12		0.36		0.22		0.33		0.80		1.35		0.71		0.20
Total Injury Frequency Rate		1.07		1.08		0.34		0.56		1.36		1.35		0.81		0.40
Man-hours worked (000’s)		1,686		1,672		1,788		1,801		1,760		1,780		1,982		2,009

The number of incidents as reflected in the Total Injury Frequency Rate decreased in the Quarter, which reflects management interventions to reinforce adherence to prescribed safety procedures. Blanket’s safety performance compares favourably with other deep level underground gold mines; however, management believes the safety performance at Blanket should be seen as a continuous focus area. The Nyanzvi 2 initiative (discussed below) is designed to increase safety awareness and reinforce strict adherence to prescribed safety procedures.    

Nyanzvi Initiative

102 employees trained on Nyanzvi 2. Co-creation training of the engineering leadership, which comprise 17 section engineers, manager, foremen and charge hands. An engineering pilot team of 11 employees was trained. Team rankings for the best performers for all departments continued in the Quarter.

4.1.2    Bilboes oxide mine

The following safety statistics have been recorded for the Quarter and the preceding quarters since acquisition.

Bilboes Oxide Mine Safety Statistics
Classification	Q1 2023		Q2 2023		Q3 2023		Q4 2023
Minor injury		0		2		0		0
Lost time injury		0		0		0		0
Occupational Health		0		0		0		0
Total		0		2		0		0
Incidents		9		15		2		4
Near misses		2		5		2		0
Lost Time Injury Frequency Rate		0		0		0		0

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4.2       Social Investment and Contribution to the Zimbabwean Economy – Blanket

Blanket’s investment in community and social projects (“CSR”) which are not directly related to the operation of the mine or the welfare of Blanket’s employees, the payments made to the Gwanda Community Share Ownership Trust (“GCSOT”) in terms of Blanket’s indigenisation, and payments of taxation and other non-taxation charges to the Zimbabwe Government and its agencies are set out in the table below.

Payments to the Community and the Zimbabwe Government
($’000’s)
Period	Year	CSR Investment		Payments to GCSOT		Payments to Zimbabwe Government (excl. royalties)		Royalties		Total
Year	2013		2,147		2,000		15,354		4,412		23,913
Year	2014		35		-		12,319		3,522		15,876
Year	2015		50		-		7,376		2,455		9,881
Year	2016		12		-		10,637		2,923		13,572
Year	2017		5		-		11,988		3,498		15,491
Year	2018		4		-		10,140		3,426		13,570
Year	2019		47		-		10,357		3,854		14,258
Year	2020		1,689		184		12,526		5,007		19,406
Year	2021		1,163		948		16,426		6,083		24,620
Year	2022		888		1,200		12,060		7,124		21,272
Q1	2023		258		-		3,769		1,471		5,498
Q2	2023		326		-		3,356		1,856		5,538
Q3	2023		336		450		2,725		2,096		5,607
Q4	2023		571		100		2,021		1,893		4,585
Year	2023		1,491		550		11,871		7,316		21,228

CSR initiatives fall under seven pillars of education, health, women empowerment and agriculture, environment, charity, youth empowerment and conservation.

The main CSR programme at Blanket relates to the refurbishment of the maternity clinic, the primary and secondary schools, and the youth centre at Sitezi, which is located approximately 17km from Blanket.  Activities in respect of this project during the Quarter include:

● Completing renovations of five classrooms, three offices, one computer laboratory, and one science laboratory at Sitezi Secondary School. The renovations included tubing and wiring of electricals and putting up ceilings. Renovation of the secondary school administration block also commenced in the Quarter.

● Construction of the waiting mothers’ shelter began and was at slab level by end of the Quarter; completion is expected in the first quarter of 2024. Repairs to the clinic buildings such as doors, windows, painting walls, and roof repairs were also done.

● The bulk of materials, such as batteries and other accessories, for the solar plant to supply the clinic, secondary school and primary school with power, was procured in the Quarter and installation is expected to start in the first quarter of 2024. The solar power will help maintain cold chains for medical supplies and samples at the clinic and provide lighting and energy supply to the clinic and the two schools for powering IT equipment such as computers and interactive boards.   

● To ensure a secure and stable supply of water for the Gwakwe Garden irrigation scheme, Blanket continued supplying irrigation water to the garden from Smiler shaft. The water augmentation project to connect four boreholes to the garden which began during the second quarter continued in the current quarter. Pipes for the pipeline were laid out, and connection to the national electricity grid was completed in the Quarter.

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● Work on upgrading the Sabiwa Stadium to meet the requirements of the Zimbabwe Football Association for Division 1/Premier Soccer League stadia in the country continued with the extension of the pitch and running tracks. Material for building changing rooms and ablution facilities was delivered on site with construction set for the first quarter of 2024.The stadium, which had been used exclusively by Sabiwa High School, will cater for footballing activities for the entire local community.

Blanket undertook road repairs of the old Gwanda Road, patching the potholes on the road which had become a hazard.

Under the conservation pillar, Dambari Wildlife Trust was granted $113,000 to carry out its work on conserving black and white rhinos in the Matopos Hills areas. The last disbursements of the grant were made in the Quarter. Dambari Trust is working with Victoria Falls Wildlife Trust as its subgrantee.

A dividend of $550,000 was paid to GCSOT in the Year and $450,000 in March, 2024. GCSOT has a 10% shareholding in Blanket.

4.3       Gold Production – Blanket

Blanket - Production Statistics
	Year	Tonnes Milled (t)		Gold Head (Feed) Grade (g/t Au)		Gold Recovery (%)		Gold Produced (oz)
Year	2020		597,962		3.21		93.8		57,899
Q 1	2021		148,513		2.98		93.0		13,197
Q 2	2021		165,760		3.34		93.8		16,710
Q 3	2021		179,577		3.48		94.2		18,965
Q 4	2021		171,778		3.57		94.3		18,604
Year	2021		665,628		3.36		93.9		67,476
Q1	2022		165,976		3.69		94.1		18,515
Q2	2022		179,118		3.71		93.9		20,091
Q3	2022		198,495		3.53		93.6		21,120
Q4	2022		208,444		3.37		93.7		21,049
Year	2022		752,033		3.56		93.8		80,775
Q1	2023		170,721		3.11		93.8		16,036
Q2	2023		179,087		3.22		94.0		17,436
Q3	2023		208,902		3.46		93.7		21,772
Q4	2023		211,730		3.17		93.6		20,172
Year	2023		770,440		3.25		93.8		75,416
January	2024		53,124		2.87		93.0		4,549
February	2024		61,092		3.30		93.8		6,085
March*	2024		60,884		3.47		94.5		6,423

*Production based on assay results on-mine, to be confirmed at refinery post quarter end.

Gold production for the Quarter was 4.2% lower than the comparative quarter due to the lower grade and recovery which offset the higher tonnes mined and milled. Gold production for the Year was 6.6% lower than 2022. Tonnes milled and grade are discussed in section 4.4 of this MD&A; gold recoveries are discussed in section 4.5 of this MD&A. 

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Production in January 2024 amounted to 4,549 ounces and 6,085 ounces in February 2024, increasing ounces by 539 from the comparative two-month period in 2023. Production in January was approximately 600 ounces below plan; production in February was as planned.  The increase in production was achieved by:

● optimising the usage of the Central Shaft and increasing its hoisting capacity by increasing the skip loading factor from 8.5 tonnes to 9.7 tonnes;

● improved handling of ore at the Central Shaft loading area; and

● re-focussing production away from low grade, low tonnage areas in the more remote areas of the mine that have a disproportionately high operating cost.

These initiatives were implemented late in January 2024; production for the month of February 2024 amounted to 6,085 ounces compared to 4,928 ounces in February 2023. Management is confident that Blanket will achieve its production guidance for 2024 of between 74,000 and 78,000 ounces of gold.

4.4       Underground – Blanket

A record of 211,730 milled tonnes were achieved during the Quarter, which is 1.6% higher than the comparative quarter; the recovered grade for the Quarter was 0.1% below the grade in the comparative quarter. The record 770,440 tonnes milled for the Year was 2.4% higher than the 752,033 tonnes milled in 2022. The increased production tonnes in the Quarter was due to the elimination of bottlenecks which were experienced in the first half of 2023 such as big boulders due to poor blasting practices and tramming breakdowns. A further focus on optimising the hoisting capacity at the Central Shaft improved ore handling and a focus on higher margin areas in January 2024 further improved the underground efficiencies and tonnes hoisted at Blanket.

4.5       Metallurgical Plant

Recoveries in the Quarter were 93.6% compared to 93.7% in the comparative quarter. There was a slight reduction in performance due to major repairs to the primary mills, repairs to cone crushers and power cuts. Recoveries in the Year were 93.8%, the same as in 2022.

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4.6       Costs

A narrow focus on the direct costs of production (mainly labour, electricity and consumables) does not fully reflect the total cost of gold production. Accordingly, cost per ounce data for the Quarter and the comparative quarter have been prepared in accordance with the Guidance Note issued by the World Gold Council on June 23, 2013 and is set out in the table below on the following bases: 

i. On-mine cost per ounce³, which shows the on-mine costs of producing an ounce of gold and includes direct labour, electricity, consumables and other costs that are incurred at the mine including insurance, security and on-mine administration;

ii. All-in sustaining cost per ounce³, which shows the on-mine cost per ounce plus royalty paid, additional costs incurred outside the mine (i.e., at offices in Harare, Bulawayo, Johannesburg and Jersey), costs associated with maintaining the operating infrastructure and resource base that are required to maintain production at the current levels (sustaining capital investment), the share-based expense (or credit) arising from the awards made to employees under the OEICP less silver by-product revenue; and

iii. All-in cost per ounce³, which shows the all-in sustaining cost per ounce plus the costs associated with activities that are undertaken with a view to increasing production (expansion capital investment).

Cost per ounce of gold sold
(US$/ounce)
	Bilboes oxide mine								Blanket								Consolidated
	3 months ended Dec 31				12 months ended Dec 31				3 months ended Dec 31				12 months ended Dec 31				3 months ended Dec 31				12 months ended Dec 31
	2023		2022		2023		2022		2023		2022		2023		2022		2023		2022		2023		2022
On-mine cost per ounce3		3,122		-		4,290		-		945		814		912		735		1,021		814		1,047		735
All-in sustaining cost per ounce3		3,268		-		4,447		-		1,680		964		1,320		878		1,735		964		1,445		878
All-in cost per ounce3		3,268		-		5,398		-		1,876		1,678		1,570		1,588		1,925		1,678		1,722		1,588

³On-mine cost per ounce, all-in sustaining cost per ounce and all-in cost per ounce are non-IFRS measures. Refer to section 10 for a reconciliation of these amounts to IFRS.

A reconciliation of costs per ounce to IFRS production costs is set out in section 10.

On-mine cost

On-mine cost comprises labour, electricity, consumables, and other costs such as security and insurance which are directly related to production.  Production costs are detailed in note 9 to the Consolidated Financial Statements. On-mine cost includes the procurement margin paid to CMSA and represent a fair value that Blanket would pay for consumables if they were sourced from a third party.

On-mine cost per ounce for the Quarter was 25.4% higher than the comparative quarter due to the increased production costs.

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The increase in on-mine cost per ounce compared to the comparative quarter is illustrated in the graph below.

The cost of oxide mining at Bilboes contributed $106 per ounce to the overall increase in the on-mine cost per ounce. The large amount of waste that was moved to access the oxide mineralisation proved costly and Bilboes had an on-mine cost of $3,122 per ounce in the Quarter. Due to the oxide mining activities incurring losses, it was placed on care and maintenance at the end of September 2023. Leaching activities related to the heap leach pad will continue as long as it contributes to the care and maintenance cost of the Bilboes oxide mine. The net book value of the Bilboes oxide mine of $851,000 was impaired in the second quarter of 2023, as the oxide mine could not be run economically without including the sulphide project. Waste removal when designing the pit for the sulphide project will allow access to the oxide ounces and the sulphide ounces and justify the cost over more ounces. Bilboes is discussed further in section 4.9.

Production costs at Blanket for the Quarter increased from the comparative quarter by 6.1% and Blanket's on-mine cost increased by 16.1% from $814 per ounce in the comparative quarter to $945 per ounce in the Quarter. Production costs at Blanket for the Quarter increased due to the higher than anticipated use of electricity due to the continued heavy use of infrastructure such as the No. 4 Shaft and Jethro Shaft which will be used more sparingly following the commissioning of the Central Shaft. The electricity usage is expected to reduce over the next 2 years as Blanket transitions from the old mine infrastructure and mining activities become more centralised in areas to which Central Shaft provides access. Management is reviewing the timing of closing other shafts and machinery or using the infrastructure more efficiently, thereby reducing power consumption in the future.

22

In April 2023 Blanket concluded a power supply agreement with the Intensive Energy Users Group (“IEUG") and the Zimbabwean power utility to allow the IEUG to obtain power outside Zimbabwe which is "wheeled” to the IEUG members. During the Quarter Blanket paid less for IEUG sourced energy but the incidences of power outages and low voltage occurrences did not reduce due to the poor condition of the Zimbabwe grid which meant that diesel costs were incurred to supplement the low voltage occurrences. Notwithstanding the foregoing, 495 kilo litres of diesel were used in the Quarter compared to 1,169 kilo litres in the comparable quarter, the reduction being due to the commissioning of the solar plant in early 2023. Management is conducting a study on how to alleviate the effect of the low voltage occurrences in the most economical manner.

The benefit of the solar plant is not recognised in on-mine cost because the solar plant (which is 100% owned by Caledonia) sells power to Blanket at a price per kilowatt/hour which reflects Blanket's historic blended cost per unit of power. The economic benefit of the solar plant is therefore recognised by Caledonia, rather than by Blanket, and the benefit ($34 per ounce of gold produced in the Quarter) is reflected in the AISC rather than the on-mine cost. The solar plant had the added benefit of stabilising the Blanket electrical grid by improving the power factor and in turn reducing generator usage to supplement reactive power.  The proposed sale of the solar plant to a third party will have no effect on the terms or quality of supply from the solar plant to Blanket.

Labour costs at Blanket increased during the Quarter due to a higher headcount and inflationary increases offset by a decrease in the production bonusses paid in the Quarter.

Consumable costs per ounce at Blanket in the Quarter increased compared to the comparative quarter due to the cost to truck ore from the Central shaft to the metallurgical plant which is located close to the No. 4 Shaft area and increased explosive costs. Management is performing a cost study to assess the benefit of installing a conveyor to transport ore from Central Shaft to the metallurgical plant; an investigation has started to improve blasting techniques.

Various government service payments increased in the Quarter compared to the comparative quarter which increased on-mine cost by $1 per ounce compared to the comparative quarter.

All-in sustaining cost

All-in sustaining cost includes inter alia administrative expenses incurred outside Zimbabwe and excludes the intercompany procurement margin and the benefits of solar power as this reflects the consolidated cost incurred at the Group level. Accordingly, the all-in sustaining cost can only be calculated at a consolidated level and not at the level of individual operations. The all-in sustaining cost per ounce for the Quarter was 80% higher than the comparative quarter due to the higher on mine costs, a higher royalty cost per ounce due to the higher realised gold price and higher sustaining capital expenditure and sustaining administrative costs. During the Year capital development cost of $9.5m (i.e. approximately $127 per ounce) was classified as sustaining capital expenditure due to the capital development cost being incurred in areas that are now in production; in previous years the capital development cost in these areas was classified as non-sustaining capital expenditure. Mechanical and electrical engineering capital expenditure with a cost of $5.2m was also classified as sustaining capital expenditure during the Year. This was mitigated somewhat by an increase in the intercompany procurement margin (which is deducted from on-mine cost for the purposes of calculating the consolidated AISC).

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The increase in AISC per ounce in the Quarter compared to the comparative quarter is illustrated in the graph below:

All-in cost

All-in cost includes investment in expansion projects at Blanket and Bilboes which remained at a high level in the Quarter due to the continued investment, as discussed in section 4.7 of this MD&A. All-in cost does not include pre-feasibility investment in exploration and evaluation projects.

4.7       Capital Projects – Blanket

The main capital development project is the infrastructure which will allow for three new production levels (26, 30 and 34 levels); a fourth level (38 level) is to be added in due course via a twin decline that commenced in February this year. 5,619 development metres were achieved in the Quarter compared to 5,942 metres in the previous quarter.

Work on key development areas in the Quarter are detailed below:

● 30 and 34 level development: the 30 level and 34 level northern and southern haulages had a total advance of 384.3 metres (“m”). Part of the northern haulage development included the take off to the 30 level Eroica extraction haulage, developed for 34.6m which development had to be reviewed pending evaluation work in the area. Development north on 30 level subsequently included additional evaluation cubbies.

● Eroica decline 3: the Eroica decline had a total of 108m developed. The expected completion has been deferred to the start of the first quarter of 2024 due to the slow rate of development owing to logistical challenges. 900m will be the last level in the development of the decline and there will be up dip development from 990m to 900m.

● 930 2 Orebody Hanging Wall Haulage: the total advance for the haulage was 159.9m. The haulage serves to expose the Blanket southern orebodies on 930m for production. The haulage is also important for the establishment of an access crosscut to link 6 Shaft on 930m. 34 – 38 level twin declines: the twin declines had slow progress during the Quarter with a total of 190.5m achieved in comparison to 289.2m in the previous quarter. The poor progress was due to waste handling challenges. The twin declines will serve as access to Blanket orebodies below 34 level where shaft infrastructure does not reach. The decline establishment will be for both access and production through subsequent installation of a chairlift and conveyor system, respectively.

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● 35 level Central Shaft: the 34 and 35 level construction of clear and dirty water dams was completed, and installation of the water management system started in the first quarter of 2024, and is expected to be completed in the second quarter of 2024. Support installation was completed in the first quarter of 2024.

● 35 level conveyor: the transition from compressed air operated loading system to hydraulics was successfully completed in the Quarter.

● The existing TSF at Blanket is reaching the end of its life; accordingly, a new TSF is required to allow production to continue. The design parameters for the new facility include:

● capacity of 13 million tonnes which is anticipated to be adequate for 14 years of production at current deposition rate;

● “upstream” design, due to the limited space;

● clear water dam and tailings facility will be lined with a double lining (geotextile and clay liner and polyurethane liner) to avoid contamination of ground water and to comply with international best practice;

● the design includes new piping and new pumps for a gland service water and return water system with instrumentation;

● new boreholes for monitoring around the facility; and

● a waste embankment between the TSF and the village for dust prevention.

The anticipated cost of the new TSF is $25.1 million which will be incurred over a period of 3 years (2023: $11.4 million, 2024: $5.4 million and 2025: $8.3 million). Work on the TSF commenced in March 2023 and the first phase of the project was completed at the end of February 2024. Deposition on the new TSF commenced on October 30, 2023 and all of Blanket’s tailings were deposited on the new facility from the beginning of 2024.

4.8       Indigenisation

As set out in previous MD&As, transactions that implemented the indigenisation of Blanket (which expression in this section and in certain other sections throughout this MD&A refers to the Zimbabwe company that owns Blanket) were completed on September 5, 2012 following which Caledonia owned 49% of Blanket.

Following the appointment of President Mnangagwa in 2017, the requirement for gold mining companies to be indigenised was removed by a change in legislation with effect from March 2018. On November 6, 2018, the Company announced that it had entered into a sale agreement with Fremiro Investments (Private) Limited (“Fremiro”) to purchase Fremiro’s 15% shareholding in Blanket for a gross consideration of $16.7 million, which was to be settled through a combination of the cancellation of the loan between the two entities which stood at $11.5 million as at June 30, 2018 and the issue of 727,266 new shares in Caledonia at an issue price of $7.15 per share.  This transaction was completed on January 20, 2020 following which Caledonia has a 64% shareholding in Blanket and Fremiro held approximately 6.3% of Caledonia’s enlarged issued share capital. 

As a 64% shareholder, Caledonia receives 64% of Blanket’s dividends plus the repayment of vendor facilitation loans which were extended by Blanket to certain of the indigenous shareholders.  The outstanding balance of the facilitation loans at December 31, 2023 was $13.4 million (December 31, 2022: $15 million). The facilitation loans (including interest thereon) are repaid by way of dividends from Blanket; 80% of the dividends declared by Blanket which are attributable to the beneficiaries of the facilitation loans are used to repay such loans and the remaining 20% unconditionally accrues to the respective indigenous shareholders.  The dividends attributable to GCSOT, which holds 10% of Blanket, were withheld by Blanket to repay the advance dividends which were paid to GCSOT in 2012 and 2013.

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The final payment to settle the advance dividend loan to GCSOT was made on September 22, 2021. Dividends to GCSOT after that date are unencumbered.

The facilitation loans are not shown as receivables in Caledonia’s financial statements in terms of IFRS. These loans are effectively equity instruments as their only means of repayment is via dividend distributions from Blanket. Caledonia continues to consolidate Blanket for accounting purposes. Further information on the accounting effects of indigenisation at Blanket is set out in note 6 to the Consolidated Financial Statements.

4.9       Bilboes

Sulphides feasibility study

The main objective at Bilboes is to construct a large, open-pit operation to extract sulphide mineralisation.  A feasibility study in respect of the Bilboes sulphide project was prepared by the previous owners which targeted mine and processing operations to produce an average of 168,000 ounces of gold per annum over a 10-year life of mine. 

Caledonia has commissioned its own feasibility study for the sulphide project reflecting the prevailing economic environment for capital and operating costs and a revised outlook for the gold price.  The new feasibility study will identify the most judicious way to commercialise the project in terms of maximising the uplift in value for Caledonia shareholders and this may result in the project potentially being implemented on a phased basis.

Work to refresh the existing feasibility study for a large-scale project is well-advanced. However, the development of feasibility for an alternative, smaller scale initial project is effectively a new project which requires inter alia new pit designs and a completely different approach to the processing and metallurgical plant.  Accordingly, this second approach will take longer to prepare, and the initial results will be to the level of a Preliminary Economic Analysis.  The preliminary results of this second exercise are expected soon after which an indeterminate period will be required to review and, if necessary, optimise the preliminary output.  Management needs to await the results of both studies (i.e. large scale and small scale) before it can identify the most effective development route from the perspective of optimal capital allocation.

Oxide mining activities

In the fourth quarter of 2022, a small operation was started to mine and process oxide mineralisation at Bilboes. The oxide mining activities were restarted predominantly with the objective to generate cash flows to pay for the existing cost structures at Bilboes Holdings (Private) Limited (“Bilboes Holdings”), the operating company for Bilboes, and this would have an added benefit of reducing the waste-stripping required for the later planned sulphide project. The oxide mine was expected to produce between 12,500 and 17,000 ounces of gold in 2023 at an on-mine cost of between $1,200 and $1,320 per ounce.

As disclosed in the previous quarter, the target mineralisation area which had been identified using old information obtained from the previous owners (i.e. not the vendors from whom Caledonia purchased the project) was found not to exist. Mining activity moved to other target areas in the Quarter where the target oxide mineralisation is based on relatively recent drill data for the oxide mineralisation. However, the large amount of waste-stripping that needed to be done to access the oxide production areas proved too costly. Accordingly, to prevent further operating losses, the oxide mining activities were placed on care and maintenance at the end of September 2023. Oxide mining activities will resume in due course in conjunction with the larger sulphide project.   Leaching of ore placed on the heap leach continued in the Quarter and had no material effect on Caledonia's financial performance.  Production and cost guidance for the oxide mining activities was withdrawn in the previous quarter.

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Bilboes Oxides: Operating Statistics
		3 months to December 31, 2023		12 months to December 31, 2023
Waste mined	(t)		-		2,019,437
Ore mined	(t)		-		154,050
Ore grade	(g/t)		-		1.15
Contained gold	(g)		-		177,216
Gold sales	(g)		21,985		94,880
Gold sales	(oz)		706		3,050
Strip Ratio			-		13

4.10     Zimbabwe Commercial Environment

Monetary Conditions

The current situation in Zimbabwe can be summarised as follows:

● Blanket produces dore gold that it is obliged to deliver to FGR, a subsidiary of the RBZ, which refines the gold to a purity of 99.5% on a toll-treatment basis. With effect from April 2023, 25% of the resultant gold is sold to FGR and the remaining 75% is exported by Caledonia to a refiner of its choice outside Zimbabwe which undertakes further processing and sells the resulting gold on the international market.  During the Quarter, all gold exports were sent to Al Etihad Gold Refinery DMCC in Dubai. The sale proceeds for the gold exported and sold via the offshore refiner is paid to Blanket’s commercial bankers in Zimbabwe within 48 hours of delivery. Management believes this new sales mechanism reduces the risk associated with selling and receiving payment from a single refining source in Zimbabwe. It also creates the opportunity to use more competitive offshore refiners and it may allow for the Company to raise debt funding secured against offshore gold sales. 25% of Blanket's gold is sold to FGR at a price which reflects the prevailing London Bullion Market Association price and the official RTGS$/USD exchange rate on the date of sale.  Payment is made by FGR to Blanket in RTGS$ within 14 days of the sale.  FGR deducts a refining fee of 1.24% from the RTGS sale proceeds; FGR collects half of the 5% royalty which is payable to the Government of Zimbabwe in physical gold which is deducted from the amount exported and the balance is paid in USD and RTGS$  to the proportionately to the 75:25 revenue split between USD and RTGS$.

● The interbank RTGS$/USD exchange rates at each quarter end and at the latest practicable date prior to the publication of this MD&A are set out below.

Interbank Exchange Rates (RTGS$:US$1)
February 20, 2019	2.50
March 31, 2019	3.00
June 30, 2019	6.54
September 30, 2019	15.09
December 31, 2019	16.77
March 31, 2020	25.00
June 30, 2020	57.36
September 30, 2020	81.44
December 31, 2020	81.79
March 31, 2021	84.40
June 30, 2021	85.42
September 30, 2021	87.67
December 31, 2021	108.66
March 31, 2022	142.42
June 30, 2022	370.96
September 30, 2022	621.89
December 31, 2022	684.33
March 31, 2023	913.67
June 30, 2023	5,739.80
September 30, 2023	5,466.75
December 31, 2023	6,104.72
March 25, 2024	20,945.17

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Devaluation of the RTGS$ means that net monetary assets held in RTGS$ will devalue in USD terms.  In the ordinary course of its business, Caledonia has net RTGS$-denominated assets comprising RTGS$-denominated cash and receivables (primarily for the 25% of gold sold to FGR and VAT receivables) and RTGS$ liabilities (mainly comprising taxes payable).  During the first quarter of 2024, due to the increase in the rate of RTGS$ devaluation, management engaged in more aggressively in RTGS$-denominated procurement to reduce its RTGS$-denominated cash.  In the first quarter of 2024 to the date of this MD&A, Blanket making prepayments of approximately $2 million in respect of consumables and supplies denominated in RTGS$.

RTGS$ cash balances at December 31,2023 amounted to a USD equivalent of $539,115 and $360,541 at March 8, 2024.

Electricity supply

The poor quality of electricity supply from the Zimbabwe Electricity Supply Authority (“ZESA”) is the most significant production risk at Blanket. During the Quarter, Blanket experienced interruptions to its power supply from the grid due to an imbalance between electricity demand and supply.

The supply from the grid is also subject to frequent surges and dips in voltage which, if not controlled, may cause severe damage to Blanket’s electrical equipment. The continued deterioration in the ZESA supply means that the power factor regularly fell to 60%, which meant that Blanket was effectively paying for 100% of the power but received only 60% and the power supply is subject to outages.

In the absence of equipment to control these surges, Blanket needs to switch to diesel power to allow mining and processing activity to continue, but generator use increases production costs and capital expenditure.

The following initiatives have been implemented by Blanket to alleviate the power challenges:

● Over recent years it increased its diesel generating capacity to 18MW of installed capacity which was sufficient to maintain all operations and capital projects but only on a stand-by basis.

● Installed two 10MVA auto tap transformers on the ZESA supply line to protect equipment at No. 4 Shaft and the main metallurgical plant from voltage fluctuations on the incoming grid supply.

● Two further 10MVA auto tap transformers were installed to protect equipment at Central Shaft.

● Caledonia’s 12.2Mwac solar plant, fully commissioned in early February 2023, provides approximately 24% of Blanket’s average daily electricity demand. The plant has been providing power to Blanket from its initial connection to the Blanket grid in November 2022. The project was completed at a cost of $14.2 million in 2023 (cost includes construction costs and other project planning, structuring, funding, and administration costs).

● In April 2023 Blanket entered into a power supply agreement with the IEUG and the Zimbabwean power utility to allow the IEUG to obtain power outside of Zimbabwe and contribute to the Zimbabwean power grid. As a result of this arrangement, Blanket has paid a lower tariff for IEUG supplied energy from April 2023, but it has not improved the power quality received at Blanket due to the continued difficulty with the Zimbabwe grid.

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Management is investigating options to alleviate the instability in the utility supply and further reduce the cost of diesel generator usage to supplement low voltage occurrences and power outages. Further investigations are in process to reduce Blanket's overall electricity consumption by utilizing the available shafts and machinery more efficiently.

Water supply

Blanket uses water in the metallurgical process. Blanket is situated in a semi-arid region and rainfall typically only occurs in the period November to February. The 2022/2023 rainy season has been poorer than usual, and management is looking at ways to reduce our consumption and find alternative sources which include boreholes. 

Taxation

The main elements of the Zimbabwe tax regime insofar as it affects Blanket and Caledonia are as follows:

● A royalty is levied on gold revenues at a rate of 5% if the gold price is above $1,200 per ounce; a royalty rate at 3% applies if the gold price is below $1,200 per ounce. With effect from January 1, 2020, the royalty is allowable as a deductible expense for the calculation of income tax. On October 9, 2022, the Zimbabwean government announced that 50% of royalty payments will be payable in gold. Management does not expect a material effect due to this announcement.  

● With effect from February 4, 2022 the 5% royalty was payable in the same proportions of currencies as revenues are received.

● Income tax was levied at 24.72% (2022: 24.72%) on taxable income as adjusted for tax deductions in the Year. The tax rate has changed for years commencing after January 1, 2024 to 25.75% which has an effect on the calculation of deferred tax amounting to an increased deferred tax liability of $1.7 million. The main adjustments to taxable income for the purposes of calculating tax are the add-back of depreciation and most of the management fees paid by Blanket to CMSA. 100% of all capital expenditure incurred in the year of assessment is allowed as a deductible expense. As noted above, the royalty is deductible for income tax purposes. The calculation of taxable income is performed using financial accounts prepared in USD and split between USD and RTGS$ based on the currency in which the transactions are denominated in. Large devaluations in the RTGS$ to the USD reduce the deferred tax liability.

● Withholding tax is levied on certain remittances from Zimbabwe i.e. dividend payments from Zimbabwe to the UK and payments of management fees from Blanket to CMSA.

4.11     Solar project

As noted in section 4.10, Blanket suffers from unstable grid power and power outages.  In late 2019 Caledonia initiated a tender process to identify parties to make proposals for a solar project to reduce Blanket’s reliance on grid power. In 2020, the Caledonia board approved the project and the Company raised $13 million (before commission and expenses) to fund the project through the sale of 597,963 shares at an average price of $21.74 per share. Caledonia’s 12.2 MWac solar plant was connected to the Blanket grid in November 2022 and was fully commissioned in early February 2023 at a construction cost of $14.2 million. At the date of the approval of this MD&A the plant provides approximately a quarter of Blanket’s total electricity requirement during the day.

In December 2022, the Caledonia board approved a proposal for Caledonia Mining Services (Private) Limited (“CMS”) (which owns the solar plant) to issue bonds up to a value of $12 million in the form of loan notes (the “solar bonds”). The decision was taken to optimise the capital structure of the Group and provide additional debt instruments to the Zimbabwean financial market. The bonds have a fixed interest rate of 9.5% payable bi-annually and have a tenor of 3 years from the date of issue. The bond repayments are guaranteed by the Company and up to the date of this MD&A $7 million of bonds have been issued to Zimbabwean commercial entities by CMS.

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Due to the unique operating environment in Zimbabwe and Caledonia’s significant in-country expertise, Caledonia opted to build the solar plant using its own resources rather than relying on an external party to build and own the solar plant using its financial resources and selling the resultant power to Blanket on a long-term contract. Accordingly, Caledonia constructed the solar plant using its own financial resources at a cost of $14.2m. As the solar plant is now fully commissioned and is working as planned, Caledonia no longer needs to own the solar project, provided it retains long term access to the power it produces.

In the second quarter of 2023 management embarked on a process to sell the solar plant. Various offers were received, and a bidder has been given exclusivity to conduct due diligence and further negotiate the sale of the plant after proving their ability to operate and fund solar plants of similar size and complexity. Management is in an advanced stage of finalising the contractual arrangements to sell the solar plant whereby the new owners will exclusively supply Blanket with electricity from This transaction is expected to realise a profit on Caledonia's investment in the plant and release cash for reinvestment in Caledonia’s core business of gold mining that should yield higher returns to our shareholders.

The solar asset was re-classified as held for sale as at December 31, 2023 in the Consolidated Financial Statements.     

4.12     Opportunities and Outlook

Production guidance 2024

Production guidance for Blanket in 2024 is estimated at between 74,000 and 78,000 ounces.  Production guidance has been slightly reduced from our long-standing guidance of “approximately 80,000 ounces of gold per annum”.  This reflects a decision to suspend production in mine areas that are low volume, high cost and low grade  that are typically in the shallow areas of the mine and increasingly suffer from dis-economies of scale as mining activities transition to the deeper areas of the mine that are serviced by Central Shaft,   

This is forward looking information as defined by National Instrument 51-102. Refer to section 18 of this MD&A for further information on forward looking statements.

On-mine cost guidance

The on-mine cost per ounce at Blanket in the Quarter was $945 which is within the guidance range of $860 to $950 per ounce. Guidance for cost per ounce at the Bilboes oxide mine was withdrawn in April 2023 when production guidance was also withdrawn. 

On-mine cost guidance for 2024 is between $870 and $970 per ounce and represents an increase of up to 6.3% from the on-mine cost per ounce in 2023 due to higher electricity consumption as the Blanket Mine transitions towards mining exclusively from areas below 750m.  Mining at levels below 750 meters concentrates hoisting activities to the Central shaft and allows for decommissioning of the No 4 and Jethro shafts that is expected to reduce electricity consumption in future years.

All-in sustaining cost guidance

The AISC per ounce at Blanket for the Year was $1,320 per ounce which was above the guidance range of $1,130 to $1,230 per ounce due to a reclassification of underground infrastructure cost from non-sustaining capital to sustaining capital. Underground infrastructure costs were in line with expectations.

AISC guidance for 2024 is between $1,370 and $1,470/oz. This AISC is higher than in previous years due to higher electricity usage included in the on-mine cost and underground infrastructure development costs (such as the water management infrastructure at Central Shaft) which is now re-classified as sustaining capital from 2023 after completion of the investment plan.

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This is forward looking information as defined by National Instrument 51-102. Refer to section 18 of this MD&A for further information on forward looking statements.

Capital expenditure

Capital expenditure at Blanket in 2023 amounted to $28.1 million (inclusive of CMSA’s mark-up). Planned 2023 capital expenditures of $2.2 million were postponed to 2024. Capital expenditure for 2023 included:

● New TSF (first phase) - $11.1 million;

● Capital development at 30 and 34 levels - $9.5 million;

● Utilities for the Central Shaft infrastructure - $1.9 million;

● Information technology infrastructure - $0.5 million;

● Electrical engineering - $0.6 million;

● Mill and surface engineering - $2.4 million; and

● Staff housing - $365,000.

Capital expenditure at Blanket in 2024 is estimated at $30.8 million (inclusive of CMSA’s mark-up and postponements).

Strategy

The immediate strategic focus is to:

● maintain production at Blanket at the targeted range of 74,000 to 78,000 ounces for 2024 and at a similar level for 2025;

● complete a revised resource and reserve statement thereby extending the life of mine at Blanket;

● complete the Caledonia feasibility study on the Bilboes sulphide project to determine the best implementation strategy and estimate the funding requirements, and commence development of the sulphide project; and

● continue with exploration activities at Motapa.

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5   EXPLORATION

Caledonia’s exploration activities are focussed on Blanket and Motapa.

Blanket

Further encouraging results were received during the Quarter from the ongoing underground drilling program at Blanket which currently targets the continuity of the Eroica and Blanket bodies mineralised zones. Initial results from the drilling at Eroica were announced on July 10, 2023 and indicate that, in general, the Eroica ore body has better grades and widths than expected.

The drill results announced on January 30, 2024 further support the drilling results announced on July 10, 2023. All of the drilling results have been published by way of RNS and are available on our website. An updated technical report is expected to be published in the second quarter of 2024.

Highlights of the results announced on January 30, 2024 include the following:

Holes Identifier	Orebody Name	Orebody Intersection		Core Length (m)	True width (m)	Grade (g/t)	Orebody Intersection depth from surface (m)	*E.O.H(m)
		From (m)	To (m)
ERC750EX2308	ERCN_FW	350.00	358.40	8.40	5.80	4.95	1,108.40	392.40
BLK 930EX2308	BQR_HW	176.03	200.63	24.60	13.33	5.92	1,130.63	304.25
BLK 930EX2310	BLK2HW	181.30	217.30	36.00	16.31	6.12	1,147.30	293.50
BLK870EX2303	BLK4_5	28.60	39.40	10.80	4.27	8.80	909.40	272.20
ARS1110EX2304	BQR	3.00	18.00	15.00	8.22	3.62	1,128.00	161.00

* End of hole depth

Motapa   

Substantive exploration work at Motapa can commence after an Environmental Impact Assessment (“EIA”) has been approved by the Zimbabwe authorities. An EIA report was submitted in July 2023 and certification was received in August 2023 paving way for exploration work to commence.

The Motapa exploration program entails the exploration of the deeper lying sulphide mineralisation at Motapa and will be achieved through a combination of reverse circulation and diamond drilling. It is planned to commence at a later date still to be determined.     

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6.         INVESTING

An analysis of investments is set out below.

($’000’s)	2020		2021		2022		2023		2023		2023		2023		2023
	Year		Year		Year		Q1		Q2		Q3		Q4		Year
Property, plant and equipment
Blanket		24,315		29,323		34,267		2,610		5,938		8,942		10,750		28,240
Solar		372		1,581		12,198		16		-		18		129		163
Other		91		365		967		485		70		82		566		1,203
Total investment – property, plant and equipment		24,778		31,269		47,432		3,111		6,008		9,042		11,445		29,606
Exploration and evaluation assets
Bilboes		-		-		-		73,198		-		130		245		73,573
Connemara North		300		163		4		-		-		-		-		-
Glen Hume		2,661		1,176		-		-		-		-		-		-
Maligreen		-		-		1,430		144		59		12		157		372
Motapa		-		-		7,844		-		81		1,628		1,039		2,748
Other Satellite properties		97		243		120		-		-		-		-		-
Total investment – exploration and evaluation assets		3,058		1,582		9,398		73,342		140		1,770		1,441		76,693

Investment in property, plant and equipment at Blanket is discussed in section 4.7 of this MD&A; investment in exploration and evaluation assets is as set out in section 5.

7.         FINANCING

Operating and investing activities at Blanket in the Quarter were funded by Blanket's operating cashflows and from Blanket’s overdraft facilities which were as set out below at December 31, 2023.

Overdraft facilities
Lender	Date drawn	Principal value	Balance drawn at December 31, 2023	Repayment terms	Security	Expiry
Stanbic Bank Limited	Sep-23	RTGS$350 million	$Nil	On demand	Unsecured	Mar-24
Stanbic Bank Limited	Sep-23	$4 million	$3.8 million	On demand	Unsecured	Mar-24
CABS Bank	Aug-23	$2 million	$2 million	On demand	Unsecured	Jul-24
Ecobank	Nov-22	$5 million	$5 million	On demand	Unsecured	Dec-24
Nedbank	Apr-23	$7 million	$6.9 million	On demand	Unsecured	Apr-24

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Hedging

From December 2022 to the date of approval of the MDA the Company had the following put options to hedge our gold price risk:

Purchase date	Ounces hedged	Strike price	Period of hedge
December 22, 2022	16,672 oz	$1,750	December 2022 - May 2023
May 22, 2023	28,000 oz	$1,900	June - December 2023
December 19, 2023	12,000 oz	$1,950	January - March 2024
March 7, 2024	12,000 oz	$2,050	April to June 2024

On September 29, 2023 and October 6, 2023 the Company purchased two gold purchase options of 1,000 ounces each at a market price of $1,875 and $1,841 per ounce. The gold purchase options were purchased when the gold price was below $1,900 per ounce at the date of gold revenue delivery. This was done to match the expiry date of the call options expiring on October 26, 2023 with the date of the gold sales from Blanket, and resulted in a profit of $0.2 million.

The put options were entered into to protect the Company against gold prices lower than the strike price over the period hedged. The options are “out-of-the-money" put options which lock in a minimum price over the number of ounces that are subject to the hedge for an initial option price. These arrangements carry no further financial obligations such as margin calls.

Solar Loan notes

In December 2022, the Caledonia board approved a proposal for Caledonia Mining Services (Private) Limited (“CMS”) (which owns the solar plant) to issue bonds up to a value of $12 million in the form of loan notes (the “solar bonds”). The decision was taken to optimise the capital structure of the Group and provide additional debt instruments to the Zimbabwean financial market. The bonds have a fixed interest rate of 9.5% payable bi-annually and have a tenor of 3 years from the date of issue. The bond repayments are guaranteed by the Company, and up to the date of this MD&A, $7 million of bonds have been issued to Zimbabwean commercial entities. Due to the expected sale of CMS, the Loan note instruments were transferred to a wholly owned subsidiary of Caledonia.

8.         LIQUIDITY AND CAPITAL RESOURCES

An analysis of Caledonia’s capital resources is set out below.

Liquidity and Capital Resources
($’000’s)
As at	Sep 30		Dec 31		Mar 31		Jun 30			Sep 30			Dec 31
	2022		2022		2023		2023			2023			2023
Net cash and cash equivalents		6,167		1,496		3,189		(2,097	)		(3,192	)		(11,032	)
Net working capital		23,975		5,986		3,677		7,674			18,758			14,096

Movements in Caledonia’s net cash, overdraft and working capital and an analysis of the sources and uses of Caledonia’s cash are discussed in section 3 of this MD&A. The overdraft and term facilities are held by Blanket with Zimbabwean banks with security and repayment periods are detailed in section 7. The Company’s liquid assets as at December 31, 2023 plus anticipated cashflows exceeded its planned and foreseeable commitments as set out in section 9.

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9.         OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL COMMITMENTS AND CONTINGENCIES

There are no off-balance sheet arrangements apart from the facilitation loans which are not reflected as loans receivable for IFRS purposes (refer to note 6 of the Consolidated Financial Statements). The Company had the following contractual obligations at December 31, 2023:

Payments due by period
($’000’s)
Falling due	Within 1 year		1-3 Years		4-5 Years		After 5 Years		Total
Trade and other payables		20,503		-		-		-		20,503
Provisions		45		381		325		10,234		10,985
Capital expenditure commitments		2,035		-		-		-		2,035
Lease liabilities		167		41		-		-		208
Cash-settled share-based payments		920		374		-		-		1,294
Loan notes (solar bonds)		665		6,447		-		-		7,112

The capital expenditure commitments relate to materials and equipment which have been ordered by CMSA and which will be sold to Blanket.

Other than the proposed investment in the exploration properties, the committed and uncommitted investment will be used to maintain Blanket’s existing operations and implement the final development relating to the Central Shaft and the further stages of the new TSF as discussed in section 4.7 of this MD&A.

Committed and uncommitted purchase obligations are expected to be met from the cash generated from Blanket’s existing operations and Blanket’s existing borrowing facilities. The Group leases property for its administrative offices in Jersey, Harare and Johannesburg; following the implementation of IFRS 16 the Group recognises the liabilities for these leases. As of December 31, 2023, the Group had liabilities for rehabilitation work on Blanket – if the mine is permanently closed – at an estimated discounted cost of $4.7 million (December 31, 2022: $2.8 million), Motapa’s liability amounted to $1.4 million (December 31, 2022: $0), and Bilboes’ liability amounted to $4.4 million (December 31, 2022: $Nil).

10.       NON-IFRS MEASURES

Throughout this document, we provide measures prepared in accordance with IFRS in addition to some non-IFRS performance measures. As there is no standard method for calculating non-IFRS measures, they are not a reliable way to compare Caledonia against other companies. Non-IFRS measures should be used along with other performance measures prepared in accordance with IFRS. We define below the non-IFRS measures used in this document and reconcile such non-IFRS measures to the IFRS measures we report.

10.1     Cost per ounce

Non-IFRS performance measures such as “on-mine cost per ounce”, “all-in sustaining cost per ounce” and “all-in cost per ounce” are used in this document. Management believes these measures assist investors and other stakeholders in understanding the economics of gold mining over the life cycle of a mine. These measures are calculated on the basis set out by the World Gold Council in a Guidance Note and accordingly differ from the previous basis of calculation. The table below reconciles non-IFRS cost measures to the production costs shown in the financial statements prepared under IFRS.

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Reconciliation of IFRS Production Cost to Non-IFRS Costs per ounce
($’000’s, unless otherwise indicated)
	Bilboes Oxides										Blanket												Consolidated
	3 months ended Dec 31					12 months ended Dec 31					3 months ended Dec 31						12 months ended Dec 31						3 months ended Dec 31						12 months ended Dec 31
	2023			2022		2023			2022		2023			2022			2023			2022			2023			2022			2023			2022
Production cost (IFRS)		2,227			-		13,118			-		19,454			18,335			69,591			62,998			21,681			18,335			82,709			62,998
COVID-19 labour and consumable expenses		-			-		-			-		-			(66	)		-			(311	)		-			(66	)		-			(311	)
Cash-settled share-based expense		(23	)		-		(23	)		-		(202	)		(412	)		(637	)		(853	)		(225	)		(412	)		(660	)		(853	)
Less exploration and safety costs		-			-		-			-		(299	)		(250	)		(1,155	)		(998	)		(299	)		(250	)		(1,155	)		(998	)
On-mine admin costs, employee incentives and intercompany adjustments		-			-		-			-		(633	)		(1,387	)		(797	)		(1,970	)		(633	)		(1,387	)		(797	)		(1,970	)
On-mine production cost*		2,204			-		13,095			-		18,320			16,220			67,002			58,866			20,524			16,220			80,097			58,866
Gold sales (oz)		706			-		3,050			-		19,392			19,926			73,482			80,094			20,098			19,926			76,532			80,094
On-mine cost per ounce ($/oz)		3,122			-		4,293			-		945			814			912			735			1,021			814			1,047			735
Royalty		94			-		319			-		1,893			1,716			7,318			7,124			1,987			1,716			7,637			7,124
Exploration, remediation and permitting cost		-			-		-			-		17			57			55			146			17			57			55			146
Sustaining capital expenditure#		13			-		154			-		8,852			659			17,199			1,880			8,865			659			17,353			1,880
Sustaining administrative expenses&		-			-		-			-		4,320			887			8,485			3,191			4,320			887			8,485			3,191
Inventory write-down		-			-		-			-		(283	)		(563	)		(283	)		(563	)		(283	)		(563	)		(283	)		(563	)
Silver by-product credit		(4	)		-		(4	)		-		(25	)		(28	)		(114	)		(116	)		(29	)		(28	)		(118	)		(116	)
Cash-settled share-based payment expense included in production cost		-			-		-			-		225			412			660			853			225			412			660			853

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Reconciliation of IFRS Production Cost to Non-IFRS Costs per ounce
($’000’s, unless otherwise indicated)
	Bilboes Oxides								Blanket												Consolidated
	3 months ended Dec 31				12 months ended Dec 31				3 months ended Dec 31						12 months ended Dec 31						3 months ended Dec 31						12 months ended Dec 31
	2023		2022		2023		2022		2023			2022			2023			2022			2023			2022			2023			2022
Cash-settled share-based payment expense		-		-		-		-		165			274			463			609			165			274			463			609
Equity-settled share-based payment expense		-		-		-		-		76			308			640			484			76			308			640			484
Procurement margin included in on-mine cost*		-		-		-		-		(989	)		(740	)		(4,422	)		(2,163	)		(989	)		(740	)		(4,422	)		(2,163	)
All-in sustaining cost		2,307		-		13,564		-		32,571			19,202			97,003			70,311			34,878			19,202			110,567			70,311
Gold sales (oz)		706		-		3,050		-		19,392			19,926			73,482			80,094			20,098			19,926			76,532			80,094
AISC per ounce ($/oz)		3,268		-		4,447		-		1,680			964			1,320			878			1,735			964			1,445			878
Non-sustaining administrative expenses&		-		-		2,900		-		1,219			3,763			6,044			10,918			1,219			3,763			8,944			10,918
Permitting and exploration expenses		-		-		-		-		10			18			32			59			10			18			32			59
Covid 19 expenses		-		-		-		-		-			66			-			311			-			66			-			311
Non-sustaining capital expenditure#		-		-		-				2,579			10,394			12,253			45,555			2,579			10,394			12,253			45,555
Total all-in cost		2,307		-		16,464		-		36,379			33,443			115,332			127,154			38,686			33,443			131,796			127,154
Gold sales (oz)		706		-		3,050		-		19,392			19,926			73,482			80,094			20,098			19,926			76,532			80,094
All-in cost per ounce ($/oz)		3,268		-		5,398		-		1,876			1,678			1,570			1,588			1,925			1,678			1,722			1,588

^{* The on-mine cost reflects the cost incurred as to produce gold. The procurement margin on consumable sales between CMSA and Blanket is not deducted from on-mine cost as the cost represents a fair value that Blanket would pay for consumables if they were sourced from a third party. The procurement margin on these sales is deducted from all-in sustaining cost and all-in cost as these numbers represent the consolidated costs at a group level, excluding intercompany profit margins.}

^{& Administrative expenses relate to costs incurred by the Group to provide services for mining and related activities. From the last quarter of 2022 administrative expenses have been allocated between AISC and all-in cost. Prior years have been restated in the MD&A.}

^{# Non-sustaining costs are primarily those costs incurred at} ‘^{new operations}’ ^{and costs related to} ‘^{major projects at existing operations}’ ^{where these projects will materially benefit the operation. All other costs related to existing operations are considered sustaining.}

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10.2     Average realised gold price per ounce

The table below reconciles “Average realised gold price per ounce” to the Revenue shown in the financial statements which have been prepared under IFRS.

Reconciliation of average realised gold price per ounce
($’000’s, unless otherwise indicated)
	3 months ended Dec 31						12 months ended Dec 31
	2023			2022			2023			2022
Revenue (IFRS)		38,661			34,178			146,314			142,082
Revenues from sales of silver		(29	)		(28	)		(118	)		(116	)
Revenues from sales of gold		38,632			34,150			146,196			141,966
Gold ounces sold (oz)		20,099			19,926			76,532			80,094
Average realised gold price per ounce (US$/oz)		1,922			1,714			1,910			1,772

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10.3     Adjusted earnings per share

“Adjusted earnings per share” is a non-IFRS measure which management believes assists investors to understand the Company’s underlying performance. The table below reconciles “adjusted earnings per share” to the profit/loss attributable to owners of the Company shown in the financial statements which have been prepared under IFRS. Adjusted earnings per share is calculated by deducting payments to Blanket Employee Trust Services (Private) Limited (“BETS”) (the company that owns 10% of Blanket’s shares on behalf of an employee trust), foreign exchange gains and losses, impairments, deferred tax and inventory write-downs from the profit attributable to the owners of the Company.

Reconciliation of Adjusted earnings (loss) per share (“Adjusted EPS”) to IFRS Profit attributable to owners of the Company
($’000’s, unless otherwise indicated)
	3 months ended December 31						12 months ended December 31
	2023			2022,			2023			2022
Profit for the period (IFRS)		(2,311	)		(8,327	)		(618	)		22,866
Non-controlling interest share of loss for the period		(851	)		298			(3,580	)		(4,963	)
Profit (loss) attributable to owners of the Company		(3,162	)		(8,029	)		(4,198	)		17,903
BETS adjustment		(129	)		45			(346	)		(517	)
Earnings (loss) (IFRS)		(3,291	)		(7,984	)		(4,544	)		17,386
Weighted average shares in issue (thousands)		18,678			12,831			18,626			12,831
IFRS EPS (cents)		(17.6	)		(62.2	)		(24.4	)		135.5
Add back (deduct) amounts in respect of foreign exchange movements
Realised net foreign exchange losses		1,956			2,237			6,767			8,325
- less tax		(478	)		(554	)		(1,666	)		(2,056	)
- less non-controlling interest		(192	)		(223	)		(670	)		(827	)
Unrealised net foreign exchange gains		(1,740	)		(8	)		(4,217	)		(12,736	)
- less tax		432			87			810			3,042
- less non-controlling interest		176			20			349			1,265
Adjusted IFRS profit excl. foreign exchange		(3,137	)		(6,425	)		(3,171	)		14,399
Weighted average shares in issue (thousands)		18,678			12,831			18,626			12,831
Adjusted IFRS EPS excl. foreign exchange (cents)		(16.8	)		(50.1	)		(17.0	)		112.2
Add back (deduct) amounts in respect of:
Reversal of BETS adjustment		129			(45	)		346			517
Impairment of property, plant and equipment		-			8,012			877			8,209
Bilboes pre-operational expenses		-			830			-			830
Impairment of E&E assets		-			467			-			467
Deferred tax		2,947			3,495			4,358			3,796
Non-controlling interest portion of deferred tax and impairment		(306	)		(1,524	)		(555	)		(1,629	)
Inventory write-down		283			563			283			563
- Less tax		(70	)		(139	)		(70	)		(139	)
Fair value losses on derivative financial instruments		529			38			1,119			1,198
Adjusted profit		375			5,272			3,187			28,211
Weighted average shares in issue (thousands)		18,678			12,831			18,626			12,831
Adjusted EPS (cents)		2.0			41.1			17.1			219.9

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11.       RELATED PARTY TRANSACTIONS

Key management personnel are persons responsible for planning, directing and controlling the activities of an entity, and include directors and executive officers of the Company. The amounts paid by the Company for the services provided by key management personnel who are related parties have been determined by negotiation among the parties and are reviewed and approved by the Company’s board. These transactions are in the normal course of operation.

The Company has entered into a consultancy agreement with Mr. Curtis, a director of the Company and the former Chief Executive Officer, effective July 1, 2022 to December 31, 2023 with a monthly fee of US$44,100 for the period July 1, 2022 until December 31, 2022 and US$12,500 for the period January 1, 2023 until December 31, 2023. During the Year, the Company expensed US$150,000 (2022: US$ $264,600 in advisory service fees.  In the Quarter, the Company extended Mr Curtis’ consultancy agreement until December 31, 2025 with a monthly fee of US$12,500.

Mr. Roets and CMSA entered into an agreement dated November 16, 2023 whereby Mr. Roets’ employment as Chief Operations Officer terminated by mutual agreement on February 29, 2024.  A total of approximately $1.7m was paid to Mr. Roets under the agreement.

$30,000 rent was paid to a company, of which Mr. Gapare a director of the Company, that supplied office accommodation to CHZ during the Year.

12.       CRITICAL ACCOUNTING ESTIMATES

Caledonia’s accounting policies are set out in the Consolidated Financial Statements which have been publicly filed on SEDAR. In preparing the Consolidated Financial Statements, management is required to make estimates and assumptions that affect the amounts represented in the Consolidated Financial Statements and related disclosures. Use of available information and the application of judgement are inherent in the formation of estimates. Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Discussion of recently issued accounting pronouncements is set out in note 4 of the Consolidated Financial Statements. Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the Consolidated Financial Statements is included in the following notes:

i. Indigenisation transaction

The directors of Caledonia Holdings Zimbabwe (Private) Limited (“CHZ”), a wholly owned subsidiary of the Company, performed an assessment, using the requirements of IFRS 10: Consolidated Financial Statements (IFRS 10), and concluded that CHZ should continue to consolidate Blanket and accounted for the transaction as follows:

● Non-controlling interests (“NCI”) are recognised on the portion of shareholding upon which dividends declared by Blanket accrue unconditionally to equity holders as follows:

a. 20% of the 16% shareholding of National Indigenisation and Economic Empowerment Fund (“NIEEF”); and

b. 100% of the 10% shareholding of GCSOT.

● This effectively means that NCI is recognised at Blanket at 13.2% of its net assets.

● The remaining 80% of the shareholding of NIEEF is recognised as a non-controlling interest to the extent that its attributable share of the net asset value of Blanket exceeds the balance on the facilitation loans including interest.

The transaction with Blanket Employee Trust Services (Private) Limited (“BETS”) is accounted for in accordance with IAS 19 Employee Benefits (profit sharing arrangement) as the ownership of the shares does not ultimately pass to the employees. The employees are entitled to participate in 20% of the dividends accruing to the 10% shareholding in Blanket if they are employed at the date of such distribution. To the extent that 80% of the attributable dividends exceeds the balance on BETS’ facilitation loan they will accrue to the employees at the date of such declaration.

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The Employee Trust, which owns BETS, and BETS, are structured entities which are effectively controlled and consolidated by Blanket. Accordingly, the shares held by BETS are effectively treated as treasury shares in Blanket and no NCI is recognised.

ii. Site restoration provisions

The site restoration provision has been calculated for Blanket based on an independent analysis of the rehabilitation costs as performed in 2023. For properties in the development phase the restoration costs are recognised at the current estimated cost of restoration undiscounted. For properties in the production phase assumptions and estimates are made when determining the inflationary effect on current restoration costs and the discount rate to be applied in arriving at the present value of the provision where the time value of money effect is significant. Assumptions, based on the current economic environment, have been made that management believes are a reasonable basis for estimating the future liability. These estimates take into account any material changes to the assumptions that occur when reviewed by management. Estimates are reviewed annually and are based on current regulatory requirements. Significant changes in estimates of contamination estimates, restoration standards, and techniques will result in changes to the provision from period to period. Actual rehabilitation costs will ultimately depend on future market prices for the rehabilitation. The final cost of the currently recognised site rehabilitation provision may be higher or lower than currently provided for

iii. Exploration and evaluation (“E&E”) expenditure

Exploration and evaluation assets are tested for impairment before the assets are transferred to mine development, infrastructure and other assets or when an indicator of impairment is identified. Exploration and evaluations assets are not depreciated.

The Group also makes assumptions and estimates regarding the technical feasibility and commercial viability of the mineral project and the possible impairment of E&E assets by evaluating whether it is likely that future economic benefits will flow to the Group, which may be based on assumptions about future events or circumstances e.g., such as the completion of a feasibility study indicating construction, funding and economic returns that are sufficient. Assumptions and estimates made may change if new information becomes available. If information becomes available suggesting that the recovery of expenditures is unlikely, the amount capitalised is written off in profit or loss in the period the new information becomes available. The recoverability of the carrying amount of exploration and evaluation assets depends on the availability of sufficient funding to bring the properties into commercial production, the price of the products to be recovered and the undertaking of profitable mining operations. As a result of these uncertainties, the actual amount recovered may vary significantly from the carrying amount.

iv. Income taxes

Significant estimates and assumptions are required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. Caledonia records its best estimate of the tax liability including any related interest and penalties in the current tax provision. In addition, Caledonia applies judgement in recognising deferred tax assets relating to tax losses carried forward to the extent that there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same taxable entity against which the unused tax losses can be utilised or sufficient estimated taxable income against which the losses can be utilised.

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v. Share-based payment transactions

The fair value of the amount payable to employees in respect of share-based awards, which are settled in cash, is recognised as an expense with a corresponding increase in liabilities, over the period over which the employee becomes unconditionally entitled to payment. The liability is re-measured at each reporting date. Any changes in the fair value of the liability are recognised as a personnel expense in profit or loss. Additional information about significant judgements and estimates and the assumptions used to estimate fair value for cash settled share-based payment transactions are disclosed in note 10 to the Consolidated Financial Statements.

vi. Impairment

At each reporting date, Caledonia determines if impairment indicators exist and, if present, performs an impairment review of the non-financial assets held in Caledonia. The exercise is subject to various judgemental decisions and estimates. Financial assets are also reviewed regularly for impairment.

vii. Depreciation

Depreciation on mine development, infrastructure and other assets in the production phase is computed on the units-of-production method over the life-of-mine based on the estimated quantities of reserves (proven and probable) and resources (measured, indicated and inferred), which are planned to be extracted in the future from known mineral deposits. Where items have a shorter useful life than the life-of-mine, the mine development, infrastructure and other assets are depreciated over their useful life. Confidence in the existence, commercial viability and economical recovery of reserves and resources included in the life-of-mine plan may be based on historical experience and available geological information. This is in addition to the drilling results obtained by the Group and management’s knowledge of the geological setting of the surrounding areas, which would enable simulations and extrapolations to be done with a sufficient degree of accuracy. In instances where management can demonstrate the economic recovery of resources with a high level of confidence, such additional resources are included in the calculation of depreciation.

viii. Mineral reserves and resources

Mineral reserves and resources are estimates of the amount of product that can be economically and legally extracted. In order to calculate the reserves and resources, estimates and assumptions are required about a range of geological, technical and economic factors, including but not limited to quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity prices and exchange rates. Estimating the quantity and grade of mineral reserves and resources requires the size, shape and depth of orebodies to be determined by analysing geological data such as the logging and assaying of drill samples. This process may require complex and difficult geological assumptions and calculations to interpret the data. Estimates of mineral reserves and resources may change due to the change in economic assumptions used to estimate mineral reserves and resources and due to additional geological data becoming available during operations.

The Group estimates its mineral reserves (proven and probable) and mineral resources (measured, indicated and inferred) based on information compiled by a Qualified Person principally in terms of Canadian Securities Administrators’ National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and the United States Securities and Exchange Commission’s Subpart 1300 of Regulation S-K (“Subpart 1300”) relating to geological and technical data of the size, depth, shape and grade of the ore body and suitable production techniques and recovery rates. Such an analysis requires geological and engineering assumptions to interpret the data. These assumptions include:

● correlation between drill-hole intersections where multiple reefs are intersected.

● continuity of mineralisation between drill-hole intersections within recognised reefs; and

● appropriateness of the planned mining methods.

The Group estimates and reports reserves and resources principally in accordance with Subpart 1300 and NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) – CIM Definition Standards for Mineral Resources and Mineral Reserves. Complying with the CIM code, NI 43-101 requires the use of reasonable assumptions to calculate the recoverable resources. These assumptions include:

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● the gold price based on current market price and the Group’s assessment of future prices;

● estimated future on-mine costs, sustaining and non-sustaining capital expenditures;

● cut-off grade;

● dimensions and extent, determined both from drilling and mine development, of ore bodies; and

● planned future production from measured, indicated and inferred resources.

Changes in reported mineral reserves and mineral resources may affect the Group’s financial results and position in several ways, including the following:

● asset carrying values may be affected due to changes in the estimated cash flows;

● depreciation and amortisation charges to profit or loss may change as these are calculated on the unit-of-production method or where useful lives of an asset change; and

● decommissioning, site restoration and environmental provisions may change in ore reserves and resources which may affect expectations about the timing or cost of these activities.

13.     FINANCIAL INSTRUMENTS

i. Commodity risk

From December 2022 to the date of approval of the MDA the Company had the following put options to hedge our gold price risk:

Purchase date	Ounces hedged	Strike price	Period of hedge
December 22, 2022	16,672 oz	$1,750	December 2022 - May 2023
May 22, 2023	28,000 oz	$1,900	June - December 2023
December 19, 2023	12,000 oz	$1,950	January - March 2024
March 7, 2024	12,000 oz	$2,050	April - June 2024

On September 29, 2023 and October 6, 2023 the Company purchased two gold purchase options of 1,000 ounces each at a market price of $1,875 and $1,841 per ounce. The gold purchase options were purchased when the gold price was below $1,900 per ounce at the date of gold revenue delivery. This was done to match the expiry date of the call options expiring on October 26, 2023 with the date of the gold sales from Blanket, and resulted in a profit of $0.2 million.

The put options were entered into to protect the Company against gold prices lower than the strike price over the period hedged.

ii. Credit risk

The carrying amount of financial assets as disclosed in the statements of financial position and related notes represents the maximum credit exposure. The trade receivable predominantly relates to gold bullion sold before the end of the Quarter and VAT receivables. The amount due in respect of bullion sales was settled at the date of the MD&A.  As discussed in section 4.10, in April 2023 the Company commenced the export and sale of gold to an independent gold refiner outside Zimbabwe, which makes payment for the gold received directly into Caledonia’s bank accounts in Zimbabwe.  This mechanism means that the Company is no longer exposed to credit risk from FGR in respect of the US Dollar component of its sales.    

Certain of the VAT receivables were outside the agreed terms of such refunds as at December 31, 2023, engagements are underway with the Zimbabwe Revenue Authority to recover such amounts by way of cash receipts or offsets against other amounts of tax payable.

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iii. Liquidity risk

All trade payables and the bank overdrafts have maturity dates that are repayable as set out in section 7.

iv. Currency risk

A proportion of Caledonia’s assets, financial instruments and transactions are denominated in currencies other than the US Dollar. The financial results and financial position of Caledonia are reported in US Dollars in the Consolidated Financial Statements.

The fluctuation of the US Dollar in relation to other currencies will consequently have an impact upon the profitability of Caledonia and may also affect the value of Caledonia’s assets and liabilities and the amount of shareholders’ equity.

As discussed in section 4.10 of this MD&A, the RTGS$ is subject to variations in the exchange rate against the US Dollar. This may result in Blanket’s assets, liabilities and transactions that are denominated in RTGS$ being subject to further fluctuations in the exchange rate between RTGS$ and US Dollars. In addition, the Company may be subject to fluctuations in the exchange rate between the South African Rand and the US Dollar in respect of cash that is held in Rands in South Africa.

v. Interest rate risk

Interest rate risk is the risk borne by an interest-bearing asset or liability due to fluctuations in interest rates. Unless otherwise noted, it is the opinion of management that Caledonia is not exposed to significant interest rate risk as it has limited debt financing. Caledonia’s cash and cash equivalents include highly liquid investments that earn interest at market rates. Caledonia’s policy focuses on preservation of capital and limits the investing of excess funds to liquid term deposits in high credit quality financial institutions.

14.       DIVIDEND HISTORY

Declaration date	cents per share
January 14, 2021	11.0
April 15, 2021	12.0
July 15, 2021	13.0
October 14, 2021	14.0
January 13, 2022	14.0
April 18, 2022	14.0
July 14, 2022	14.0
October 13, 2022	14.0
December 30, 2022	14.0
April 3, 2023	14.0
June 29, 2023	14.0
September 28, 2023	14.0
January 2, 2024	14.0

The board will consider the continuation of the dividend as appropriate in line with other investment opportunities and its prudent approach to risk management including Blanket maintaining a reasonable level of production; receiving payment in full and on-time for all gold sales; being able to make the necessary local and international payments and being able to replenish its supplies of consumables and other items.

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15.       MANAGEMENT AND BOARD

Mr. Roets stepped down from his role as Chief Operating Officer with effect from February 29, 2024. Mr. Roets remained a director of the Company and various subsidiaries until February 29, 2024. Caledonia is well-advanced in the process of recruiting a replacement Chief Operating Officer.

On March 18, 2024 Caledonia announced that Tariro Gadzikwa has joined the Board of Directors as an Independent Non-Executive Director with effect from March 15, 2024.

It also announces that Steve Curtis, who retired as Chief Executive Officer of the Company in June 2022 and remained on the Board as a Director in a non-executive capacity since then, has decided to step down from the Board and as such will not be seeking re-appointment as a Director at the next annual general meeting. He will therefore leave the Board with effect from the next annual general meeting of the Company.

16.       SECURITIES OUTSTANDING

At March 27, 2024, being the last day practicable prior to the publication of this MD&A, Caledonia had 19,194,525 common shares issued and the following outstanding options to purchase common shares (“Options”) granted in equal amounts to each of the employees of a PR consultancy to the Company 3PPB LLC being P Chidley and P Durham:

Number of Options	Exercise Price	Expiry Date
10,000	CAD11.50	25-Aug-24
10,000	USD 9.49	30-Sep-29
20,000

The OEICP allows that the number of shares reserved for issuance to participants under the OEICP, together with shares reserved for issue under any other share compensation arrangements of the Company, shall not exceed the number which represents 10% of the issued and outstanding shares from time to time.

17.       RISK ANALYSIS

The business of Caledonia contains significant risk due to the nature of mining, exploration and development activities.  Caledonia’s business contains significant additional risks due to the jurisdictions in which it operates and the nature of mining, exploration and development.  Included in the risk factors below are details of how management seeks to mitigate the risks where this is possible.  

● Liquidity risk:  Caledonia currently has sufficient cash and operating resources, access to funding and continues to generate sufficient cash to cover all its anticipated investment needs.  

● Availability of foreign currency:  The Company needs access to foreign currency in Zimbabwe so that it can pay for imported goods and equipment and remit funds to Group companies outside Zimbabwe. At prevailing gold prices and the current rate of production the Company has access to sufficient foreign currency to continue normal mining operations and to fully implement its investment plan as scheduled.    No assurance can be given that sufficient foreign currency will continue to be available.

● Exploration risk:  The Company needs to identify new resources to replace ore which has been depleted by mining activities and to commence new projects. No assurance can be given that exploration will be successful in identifying sufficient mineral resources of an adequate grade and suitable metallurgical characteristics that are suitable for further development or production.  

● Development risk: The Company is engaged in the implementation of the Central Shaft project as set out in section 4.7 of this MD&A, as well as other projects including in particular Bilboes. Construction and development of projects are subject to numerous risks including: obtaining equipment, permits and services; changes in regulations; currency rate changes; labour shortages; fluctuations in metal prices and the loss of community support.  There can be no assurance that construction will commence or continue in accordance with the current expectations or at all.

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● Production estimates:  Estimates for future production are based on mining plans and are subject to change. Production estimates are subject to risk and no assurance can be given that future production estimates will be achieved. Actual production may vary from estimated production for a variety of reasons including un-anticipated variations in grades, mined tonnages and geological conditions, accident and equipment breakdown, changes in metal prices and the cost and supply of inputs and changes to government regulations.

● Mineral rights:  The Company’s existing mining lease, claims, licences, and permits are in good standing. The Company must pay fees etc. to maintain its lease, claims and licences.

● Metal prices:  The Company’s operations and exploration and development projects are heavily influenced by the price of gold, which is particularly subject to fluctuation. From time to time the Company enters into arrangements to minimise this risk either by using cap-and-collar hedges or by purchasing out-of-the-money put options.  These arrangements are detailed in section 13 of this MD&A and note 14 of the Consolidated Financial Statements.  Management regularly reviews future cash flow forecasts in the context of the prevailing gold price and likely downside scenarios for future gold prices.    

● Increasing input costs:  Mining companies generally have experienced higher costs of steel, reagents, labour and electricity and from local and national government for levies, fees, royalties and other direct and indirect taxes.  

● Illegal mining: In previous years there were incidences of illegal mining activities on properties controlled by Blanket which resulted in increased security costs and an increased risk of theft and damage to equipment. Blanket has received adequate support and assistance from the Zimbabwean police in investigating such cases. Those properties most at risk from such activity had been sold.  With new mining areas having been acquired by the Group the incidence and possibility of illegal mining has increased, and there have been minor instances of illegal mining at Bilboes and Motapa.  The Group is receiving adequate support and assistance from the Zimbabwean police.

● Electricity supply: Zimbabwe produces and imports less electricity than it requires and has insufficient funds to adequately maintain or upgrade its distribution infrastructure. This has resulted in frequent interruptions to the power supply at Blanket. Blanket has addressed the issue of interrupted power supply by installing stand-by generators and constructing a solar plant which provides approximately a quarter of Blanket’s power requirements during the day.

● Water supply:  Blanket uses water in the metallurgical process, most of which is obtained from a nearby dam. Blanket is situated in a semi-arid area and rainfall typically occurs only in the period November to February. The most recent rainy season has been below average, but management believes there is enough water in the Blanket dam to maintain normal operations until the next rainy season. Management is assessing measures to reduce water consumption and to establish alternative sources of supply.

● Succession planning:  The limited availability of mining and other technical skills and experience in Zimbabwe and the difficulty of attracting appropriately skilled employees to Zimbabwe creates a risk that appropriate skills may not be available if, for whatever reason, the current skills base at Blanket is depleted.  The Caledonia and Blanket management teams have been augmented so that, if required, it could provide appropriate support to Blanket if this is required.

● Zimbabwe Country risk: The commercial environment in which the Company operates is unpredictable.  Potential risks may arise from: unforeseen changes in the legal and regulatory framework which means that laws may change, may not be enforced, or judgements may not be upheld; restrictions on the movement of currency and the availability of foreign currency at a realistic exchange rate to make payments from Zimbabwe which may result in continued foreign exchange losses being realised and/or local currency being used to procure goods and services at elevated prices in USD terms; risks relating to possible corruption, bribery, civil disorder, expropriation or nationalisation; risks relating to restrictions on access to assets and the risk that the Zimbabwe Government is unable to pay its liabilities to Blanket, including amounts due in respect of VAT refunds. Management believes that it has minimised such risks by complying fully with all relevant legislation, by obtaining all relevant regulatory permissions and approvals and by regular and proactive engagement with the relevant authorities.

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● Gold marketing arrangements: In terms of regulations introduced by the Zimbabwean Ministry of Finance in January 2014, all gold produced in Zimbabwe must be sold to FGR, a company which is owned by the RBZ. From April 2023, the Company has implemented a mechanism, with the approval of the Zimbabwean authorities, whereby it sells 75% of its produced ounces to a refiner outside of Zimbabwe. The first shipments of the direct sale of gold in terms of these mechanisms was successfully completed in April 2023 and this system has subsequently worked well.   

● Other gold industry risks: On June 27, 2023 the U.S. Department of State together with other U.S. government agencies issued an advisory in light of reports related to the role of illicit actors in the gold trade to (i) highlight the opportunities and specific risks raised by the gold trade across sub-Saharan Africa and (ii) encourage industry participants to adopt and apply strengthened due diligence practices to ensure that such malign actors are unable to exploit and benefit from the sector, which remains essential to the livelihoods of millions of people across sub-Saharan Africa. Caledonia acknowledges and concurs with the U.S. Department of States’ warning that without adequate due diligence and appropriate mitigating measures, an industry participant may inadvertently contribute to one or more of these risks, including conflict and terror financing, money laundering activities, sanctions evasion, human rights and labour rights abuses and environmental degradation.  Caledonia has robust policies in place to counter such risks including, amongst other things: a Code of Business Conduct, Ethics and Anti-Bribery Policy, a Human Rights Policy and Customer AML/KYC Policy, and it encourages whistleblowing and grievance reporting in order to monitor compliance.  Caledonia performs enhanced due diligence on significant suppliers and other counterparties (including, but not limited to, sanctions and political exposure checks), has established new and robust routes to market for its gold production (none of which, for the avoidance of doubt, is artisanal) and has scrutinised the new refineries to which it now sells its gold.  The Company reports its environmental, social and governance (“ESG”) performance annually, disclosing key environmental data, supports artisanal miners in the form of tributing of gold claims (as well as the local community generally) and has adopted best practice in the construction of its new TSF.  For more information in all of these areas, please refer to Caledonia’s ESG reports.

● South Africa:  the company has approximately 29 employees located in South Africa who provide technical and procurement services to Blanket; the group accounting function is also based in Johannesburg and a significant proportion of the consumables, capital equipment and specialist technical services that Blanket requires are procured in South Africa.  South Africa will hold presidential, national and local elections in May 2024 which may give rise to disruption to normal commercial activity. Management is exploring mechanisms to reduce this exposure for example by developing alternative procurement and logistics routes.

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18.       FORWARD LOOKING STATEMENTS

Information and statements contained in this MD&A that are not historical facts are “forward-looking information” within the meaning of applicable securities legislation that involve risks and uncertainties relating, but not limited to, Caledonia’s current expectations, intentions, plans, and beliefs.  Forward-looking information can often be identified by forward-looking words such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “target”, “intend”, “estimate”, “could”, “should”, “may” and “will” or the negative of these terms or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance.  Examples of forward-looking information in this MD&A include: implementation schedules for, and other uncertainties inherent in, the Central Shaft project; production guidance; estimates of future/targeted production rates; planned mill capacity increases; estimates of future metallurgical recovery rates and the ability to maintain high metallurgical recovery rates; timing of commencement of operations; plans and timing regarding further exploration, drilling and development; the prospective nature of exploration and development targets; the ability to upgrade and convert mineral resources to mineral reserves; capital and operating costs; our intentions with respect to financial position and third party financing; future dividend payments; and the proposed sale of the solar plant.  This forward-looking information is based, in part, on assumptions and factors that may change or prove to be incorrect, thus causing actual results, performance or achievements to be materially different from those expressed or implied by forward-looking information. Such factors and assumptions include, but are not limited to: failure to establish estimated resources and reserves, the grade and recovery of ore which is mined varying from estimates, success of future exploration and drilling programs, reliability of drilling, sampling and assay data, assumptions regarding the representativeness of mineralisation being inaccurate, success of planned metallurgical test-work, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, changes in government regulations, legislation and rates of taxation, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors.

Security holders, potential security holders and prospective investors should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements.  Such factors include, but are not limited to: risks relating to estimates of mineral reserves and mineral resources proving to be inaccurate, fluctuations in gold price and payment terms for gold sold to FGR, risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected geological or structural formations, pressures, power outages, fire, explosions, landslides, cave-ins and flooding), risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom the Company does business, inadequate insurance, or inability to obtain insurance, to cover these risks and hazards, employee relations, relationships with and claims by local communities and indigenous populations, political risk, risks related to natural disasters, terrorism, civil unrest, public health concerns (including health epidemics or outbreaks of communicable diseases such as the coronavirus (COVID-19)), availability and increasing costs associated with mining inputs and labour, the speculative nature of mineral exploration and development, including the risks of obtaining or maintaining necessary licenses and permits, diminishing quantities or grades of mineral reserves as mining occurs, global financial condition, the actual results of current exploration activities, changes to conclusions of economic evaluations, and changes in project parametres to deal with un-anticipated economic or other factors, risks of increased capital and operating costs, environmental, safety or regulatory risks, expropriation, the Company’s title to properties including ownership thereof, increased competition in the mining industry for properties, equipment, qualified personnel and their costs, risks relating to the uncertainty of timing of events including targeted production rate increase and currency fluctuations. Security holders, potential security holders and prospective investors are cautioned not to place undue reliance on forward-looking information.  By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur.  Caledonia reviews forward-looking information for the purposes of preparing each MD&A; however, Caledonia undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

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19.       CONTROLS

The Company has established and maintains disclosure controls and procedures (“DC&P”) designed to provide reasonable assurance that material information relating to the Company is made known to the Chief Executive Officer and the Chief Financial Officer by others, particularly during the period in which annual filings are being prepared, and that information required to be disclosed in the Company’s annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarised and reported within the time periods specified by such securities legislation.

The Company’s management, along with the participation of the Chief Executive Officer and the Chief Financial Officer, have evaluated the effectiveness of the Company’s DC&P as of December 31, 2023. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that, at December 31, 2023, the Company’s DC&P were effective.

The Company also maintains a system of internal controls over financial reporting (“ICFR”) designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS; however, due to inherent limitations, ICFR may not prevent or detect all misstatements and fraud. The board of directors approves the financial statements and ensures that management discharges its financial responsibilities. The Audit Committee, which is composed of independent directors, meets periodically with management and auditors to review financial reporting and control matters and reviews the financial statements and recommends them for approval to the board of directors.

The Company’s management, including the Chief Executive Officer and the Chief Financial Officer, is responsible for establishing and maintaining adequate ICFR and evaluating the effectiveness of the Company’s ICFR as at each fiscal year end. Management has used the 2013 Internal Control–Integrated Framework from the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO”) to evaluate the effectiveness of the Company’s ICFR at December 31, 2023.  Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that at December 31, 2023, the Company’s ICFR was effective.

There have been no changes in the Company’s ICFR during the period ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s ICFR.

20.       QUALIFIED PERSON

Mr. Roets (B Eng (Min), MBA, Pr. Eng, FSAIMM, AMMSA) was the Company’s qualified person as defined by Subpart 1300 and NI 43-101 up until November 14, 2023. 

Mr. Harvey (NHD Economic Geology, MGSSA, MAIG) will be the Company’s qualified person as defined by Subpart 1300 and NI 43-101. Mr. Harvey is responsible for the technical information provided in this MD&A except where otherwise stated. Mr. Harvey has reviewed the scientific and technical information included in this document and has approved the disclosure of this information for the purposes of this MD&A.

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