Q2 FY2026
Filed Aug 10, 2026Q2 revenue rose 16% to US$75.9 million as Blanket production recovered from Q1, while the company reaffirmed production guidance and raised 2026 cost guidance.
Revenue, gross profit, EBITDA, profit after tax and earnings per share increased year over year, while Blanket production, grades, recovery, sales volumes and free cash flow remained below the comparative quarter. Management reported improving Q2 operating momentum and maintained production guidance, but raised on-mine cost and AISC guidance.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenueother | US$75.9 million | 14% | 16% |
| Gross profitother | US$39.2 million | 22% | 16% |
| Operating profitother | 41,705 (in thousands of United States Dollars) | – | – |
| EBITDAother | US$45.8 million | – | 16% |
| Profit after taxother | 30,020 (in thousands of United States Dollars) | – | 27% |
| Basic earnings per shareother | US$1.36/share | 71% | 28% |
| Diluted earnings per shareother | US$1.36 | – | 28% |
| Net cash inflow from operating activitiesother | 28,435 (in thousands of United States Dollars) | – | – |
| Free cash-flownon-GAAP | 17,387 (US$ 000) | – | -54% |
| Capital expenditure at Blanketother | 7,097 (US$ 000) | – | -31% |
| Gold production at Blanketother | 17,360 ounces | 18% | -18% |
| Gold soldother | 17,811 ounces | – | -13% |
| Realised gold priceother | US$4,259/oz | -12% | 34% |
| On-mine costsnon-GAAP | 29,841 (US$ 000) | – | 30% |
| On-mine costnon-GAAP | US$1,675/oz sold | -3.7% | 49% |
| AISCnon-GAAP | 47,694 (US$ 000) | – | 29% |
| AISC per ouncenon-GAAP | US$2,678/oz sold | -3% | 48% |
| Head/feed gradeother | 2.9g/t | – | -15% |
| Gold recoveryother | 92.9% | – | -2% |
| Ore processed/milledother | 208.1 (‘000’s tonnes) | – | 2% |
| Ore brokenother | 210.2 (‘000’s tonnes) | – | -15% |
| Ore hoistedother | 205.9 (‘000’s tonnes) | – | -8% |
| Group LTIFRother | 0 (per 1m hours) | – | -100% |
| Group TIFRother | 2.2 (per 1m hours) | – | -29% |
| Six-month revenueother | 142,347 (US$ 000) | – | 17% |
| Six-month gross profitother | 71,283 (in thousands of United States Dollars) | – | – |
| Six-month EBITDAother | 79,702 (US$ 000) | – | 29% |
| Six-month profit after taxother | 48,933 (US$ 000) | – | 41% |
| Six-month free cash-flownon-GAAP | 30,170 (US$ 000) | – | -29% |
| Cash and cash equivalentsother | 171,784 (in thousands of United States Dollars) | – | – |
| Net cash and cash equivalentsother | US$167.8 million | – | – |
| Convertible senior notesother | 98,296 (in thousands of United States Dollars) | – | – |
2026 outlook
- NoteBlanket gold production: 72,000-76,500 ounces
- NoteOn-mine cost per ounce: US$1,600-US$1,800/oz sold
- NoteAISC per ounce: US$2,500-US$2,700/oz sold
- NoteRevised capex guidance for the Group: US$103.3 million
- NoteSustaining capital expenditure at Blanket: US$48.0 million
- NoteGrowth capital at Blanket: US$3.5 million
- NoteGrowth capital expenditure at Bilboes: US$48.0 million
- NoteExploration at Motapa: US$3.8 million
Capital returns
- The Board approved a quarterly dividend of 14 United States cents (US$0.14) on each of the Company's shares.
- Ex-dividend date VFEX: August 19, 2026.
- Ex-dividend date AIM and NYSE American: August 21, 2026.
- Record date: August 21, 2026.
- Payment date: September 4, 2026.
- Dividends paid: 10,838 (in thousands of United States Dollars).
What drove it
- Revenue growth was mainly due to a stronger realised gold price.
- Blanket gold production increased 18% from Q1 2026 because of improved access to high-grade mining areas.
- Gross profit increased with higher gold sales revenue from the stronger average realised gold price, partly offset by lower ounces sold.
- The company said the transition to a seven-day operating schedule and improved access to higher-grade mining areas are beginning to deliver results.
- Q2 EBITDA included US$11.5 million of gains from the revaluation of derivative financial instruments.
- The cash position reflected continued operating cash generation and proceeds from Convertible Senior Notes issued in January 2026.
Concerns
- Q2 Blanket production was 18% below Q2 2025, and gold sales were 13% below Q2 2025.
- Head/feed grade was 2.9g/t, below 3.4g/t in Q2 2025, while recovery was 92.9%, below 94.4%.
- On-mine cost per ounce increased 49% year over year to US$1,675/oz sold, and AISC per ounce increased 48% to US$2,678/oz sold.
- Free cash-flow declined 54% year over year to 17,387 (US$ 000).
- 2026 on-mine cost guidance was raised from US$1,500-US$1,700/oz sold to US$1,600-US$1,800/oz sold, and AISC guidance was raised from US$2,100-US$2,300/oz sold to US$2,500-US$2,700/oz sold.
- The final elements of the Bilboes funding package remain in progress, including an interim facility of US$150 million and a limited recourse project finance facility of US$300 million.
What to watch
- Production expected from September 2026 as the company intends to process an additional 200 tonnes per day.
- Completion of the elution plant upgrade later in 2026 and management's expectation for stronger second-half production.
- The maiden Motapa mineral resource estimate expected in Q3 2026.
- The Blanket K-pits resource estimate expected in Q3 2026 and the planned trial mining and heap-leach programme expected to commence in Q4 2026.
- Expected first physical Bilboes on-site activity in October 2026.
- Firm 2027 guidance for production, costs and operating costs expected after the 2027 budgeting exercise at the end of 2026.
Balance sheet and cash flow
- Cash and cash equivalents were 171,784 (in thousands of United States Dollars) at June 30, 2026, versus 35,738 (in thousands of United States Dollars) at December 31, 2025.
- Bank overdrafts were 4,015 (in thousands of United States Dollars) at June 30, 2026, versus 11,898 (in thousands of United States Dollars) at December 31, 2025.
- Convertible senior notes were 98,296 (in thousands of United States Dollars) at June 30, 2026.
- Net cash inflow from operating activities was 28,435 (in thousands of United States Dollars), versus 28,084 (in thousands of United States Dollars) in Q2 2025.
- Net cash used in investing activities was 15,224 (in thousands of United States Dollars), versus 8,359 (in thousands of United States Dollars) in Q2 2025.
- Net cash used in financing activities was 6,377 (in thousands of United States Dollars), versus 6,923 (in thousands of United States Dollars) in Q2 2025.
- Proceeds from convertible senior notes, net of transaction costs, were 145,100 (in thousands of United States Dollars) in the six months ended June 30, 2026.
Analysis
Caledonia reported a recovery from Q1 at Blanket. Gold production rose 18% to 17,360 ounces as access to higher-grade mining areas improved, and feed grade increased to 2.9g/t from 2.5 g/t in the preceding quarter. Revenue increased 14% from US$66.4 million in Q1 to US$75.9 million, while gross profit increased 22% from US$32.1 million to US$39.2 million. The realised gold price was US$4,259/oz, 12% below the preceding quarter but 34% above Q2 2025.
Year-over-year financial growth was driven by price rather than volumes. Q2 revenue increased 16%, gross profit increased 16%, EBITDA increased 16% and profit after tax increased 27%. However, production was 18% below Q2 2025, gold sold was 13% below, feed grade was 15% below and recovery was 2% below. Q2 EBITDA included an US$11.5 million fair value gain on derivative financial instruments. Profit after tax excluding that gain and the US$8.5 million gain on the sale of the solar plant in the comparative quarter increased 23% from US$15.0 million to US$18.5 million.
Costs remain the principal operational issue. On-mine cost was US$1,675/oz sold, 49% above Q2 2025, although 3.7% below US$1,740/oz sold in Q1. AISC was US$2,678/oz sold, down 3% sequentially but 48% above Q2 2025. Management attributed elevated costs to lower grade, employee-benefit costs including US$3.2 million of dividend payments to Blanket employees, US$4 million of advisory fees associated with the convertible bonds and other fundraising initiatives, US$3.2 million of higher royalty payments, and higher sustaining capital expenditure. Free cash-flow declined 54% to 17,387 (US$ 000).
Liquidity increased materially. Cash and cash equivalents were 171,784 (in thousands of United States Dollars) at June 30, 2026, while net cash and cash equivalents were US$167.8 million. The balance sheet included 98,296 (in thousands of United States Dollars) of convertible senior notes, and six-month proceeds from convertible senior notes net of transaction costs were 145,100 (in thousands of United States Dollars). The Board approved a quarterly dividend of US$0.14 per share. Bilboes funding remains incomplete, although the company reported progress on both the US$150 million interim bank facility and the US$300 million limited recourse project finance facility.
Management reaffirmed 2026 Blanket production guidance of 72,000-76,500 ounces but increased on-mine cost guidance to US$1,600-US$1,800/oz sold and AISC guidance to US$2,500-US$2,700/oz sold. Revised Group capex guidance was reduced to US$103.3 million from US$178.9 million, reflecting timing of deposits for Bilboes long-lead equipment rather than a change in project scope, timetable or cost. Management expects stronger second-half operating performance, supported by the seven-day schedule, higher-grade access, an elution plant upgrade and intended processing of an additional 200 tonnes per day from September 2026. It expects Blanket production in 2027 to exceed the previous guidance of 72,000-76,500 ounces, but firm 2027 guidance is not expected until after the end-of-2026 budgeting process.
Management, verbatim
We delivered a clear improvement on the first quarter, with gold production increasing by 18% to 17,360 ounces. Encouragingly, grades improved steadily throughout the period as access to higher-grade mining areas increased, and this positive trend will continue into the third quarter.
Mark Learmonth, Chief Executive Officer
These improvements, combined with a robust gold price environment, resulted in quarterly revenue of US$75.9 million, profit after tax of US$30.0 million and operating cash flow of US$28.4 million.
Mark Learmonth, Chief Executive Officer
With improving operating momentum, a strong gold price environment and several growth opportunities advancing across the portfolio, we remain confident in Caledonia’s outlook and our ability to create long-term value for shareholders.
Mark Learmonth, Chief Executive Officer
Not in the filing
stated, not guessed- Prior outlook section was not provided, so no comparison of actual results with prior guidance is included.
- Gross margin was not reported.
- A consolidated operating-expense total was not reported.
- Tax rate was not reported.
- Revenue by operating segment was not reported.
- Q2 non-GAAP adjusted earnings per share was not reported.
- Q2 diluted earnings per share comparison with the preceding quarter was not reported.
- Q2 operating profit year-over-year and quarter-over-quarter percentage changes were not reported.
- Q2 EBITDA comparison with the preceding quarter was not reported.
- Q2 profit after tax comparison with the preceding quarter was not reported.
- 2026 revenue, gross-margin, operating-expense and tax-rate guidance was not reported.
- Firm 2027 production, cost and operating-cost guidance was not reported.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.