We're going to run through the presentation as always, and we will leave time for questions at the end. What we do ask though is if you do have a question, if you could just raise your hand and we will unmute you. We find that's a better format than the written Q&A. I'm now just going to pass you over to Mark and Chester who can run through the presentation.

Thanks very much, Camilla. I'm Mark Learmonth, Caledonia's CEO. And I was going to give a few opening observations and comments before I hand over to Chester. It's fair to say 2023 was a challenging year. Most of the difficulty was encountered in the first half of the year with a difficult situation at Blanket mine and also the Bilboes oxides problem. Both of those are resolved and Q3 was a good quarter. Q4 started off reasonably well. It was sort of sideswiped towards the end of the quarter by a couple of unexpected things. But pretty much the bad news relating to 2023 was dealt within the first half. Having said that let's just run through this. So annual gold production at Blanket was just over 75,000 ounces, which was in line with guidance. Gross profit for the year was $41.5 million, compared to nearly $62 million in the previous year. And that decrease was largely due to higher production costs, in particular at the Bilboes oxides mine in the early parts of the year. It should also be noted that 2023 performance, particularly the Q4 performance was adversely affected by a higher and work in progress. That was gold in a bar that hadn't been sold at the end of the year, just over 3,000 ounces. So that represents about $6 million of revenue and about $3 million of gross profit and that was sold in the first week of January. So that was just purely a timing issue. In terms of operating costs, we had expected higher labor and power costs, but they were somewhat higher than we'd even expected. We are looking at measures to reduce our electricity consumption and to reduce our labor -- and to improve our labor efficiency. And that's certainly on the…

Thank you, Mark. Yes. It's good to see the revenue going up from quarter this comparable quarter, and asked you to increase ounces sold as well as the higher realized gold prices received. It's not that number. It's about 3,000 ounces of gold work in progress that was sold early in January, and that's mostly just to get the cattle fishing. Royalty is very much been flat at 5%. The tax in Zimbabwe for several years has been fairly unchanged and consistent. Production price that's gone up for the quarter versus the comparable quarter and it's predominantly due to the higher electricity usage from when we added the central shaft in 2023 and really started wasting some damages, a little bit. As we go forward with our life and mine plan, we aim to move our production centralize our production to below 750 meters. We're currently moving on mine above and below. And that synchronization below 750 would allow us to shut some shaft down, like the four shaft and six ones that should reduce our kilowatt hours coming forward. Now the sequencing of that and exactly how that kilowatt hours we will save that decision is still under in the process, we're making up or evaluating our various options on that. Over time, it's been high in October and November. Our initiatives has paid dividends in December and now it's going forward, so you won't see an increase in the overtime that's been sold. And we've incurred some unforeseen maintenance for us late in December of approximately $1.1 million and we don't expect to incur that going forward. The depreciation number has gone up, and that's where you see the short and useful lack of some of the shafts that we estimate. And going forward with this significant increase…

Thank you, Chester. I just want to just leave you with this slide, which focuses on Blanket's quarterly performance in 2022 and 2023. And I just want to make it very clear that the difficulties that we faced in the first two quarters of 2023, quarter one and quarter two, where you can see production dipped from about 21,000 ounces in the second half of 2022 to 16,000, 17,000 ounces in quarter one and quarter two respectively, which then floats through into a fairly sharp fall in gross profit from anything like $20 million a quarter down to $12 million and $17 million. I just want to just make it clear that in terms of the underlying profitability and cash generation, Blanket has improved in Q3. Q4, $17 million of gross profit that's pretty much accounted for by the 3,000 ounces of gold work in progress that was realized in January. So the core of the business is Blanket. It had a bit of a difficult time in the first half of 2023, but we're now increasingly comfortable that it's now through that. Should we move on? Next slide. So, look in terms of outlook, we've taken steps to address the higher than expected costs experienced in the second half of 2023. Although it's fair to say that finding a full resolution to the elevated electricity usage may take us a little bit longer. Our expectation is to maintain production at Blanket mine in the range of 74,000 to 78,000 ounces. That's somewhat lower than we've indicated previously, because we've taken a decision to scale back production in areas which are relatively low grade and relatively low volume and quite remote from the main infrastructure. So all three of those together means that those areas, which might only be moving…

The first question related to the reasons for Dana's leaving the company. We entered into a termination agreement with Dana, which is subject to an NDA. But I think it's fair to say that Dana made an enormous contribution to the business over the last 10 years, in particular, completing the central shaft. Central shaft is now complete. The tailings facility is complete and we have yet to start work on the new business of the Bilboes project. And therefore, in the context of that and some other matters, it was the appropriate time for both sides to part company. The recruitment process for his replacement is very well advanced. I mean, by very well advanced we expect to be able to provide some updates within the next week or so. And we've had no difficulty attracting talent. We've been very favorably surprised actually by the strength and depth of the pool of candidates who've been very excited about pursuing the opportunity that's reflected by Caledonia. And there's a lot of detailed questions about the solar plant at Blanket. First of all, let me just clarify. The proposed sale of the solar plant is not a sale of leaseback. It is an outright sale. And actually, one of the issues that is currently somewhat holding up negotiations is the counterparties trying to transfer risk back to us. And we're very clear that, this is an outright sale with a long-term take or pay contract. It's not a sale or leaseback. And they said that at the moment, the solar farm is producing slightly better than we'd expected. And there is scope in due course maybe to consider increasing the size of the solar farm. But the issue we face is that we're the only logical off-taker for the product for…

Mark, we've got a question that’s been typed.

There's one from [Howard Flinker]. Howard?

The two questions are, what do you plan to spend on CapEx this year?

$30 million. Sorry, Chester. I'll leave it to you. Chester? I'm sorry.

Just over $30 million.

And second, because your sound was so low, I couldn't understand the explanation of taxes. Is it essentially that your deferred tax is in U.S. dollars and you couldn't depreciate it with the Zimbabwean dollar?

No. I wouldn't say that. From 1 January 2023, we've been doing up the third tax scale and income tax scale on a combination of $1 million and U.S. dollars. Previously, we just placed $1 million in past this year devaluation.

Can you get to compute a little closer, your sound is very weak.

Let me -- sorry, [Howard] let me step in. We report in U.S. dollars, okay? But the underlying tax calculations are done in a combination of U.S. dollars and local currency and that makes it absolutely impossible for someone like you or me, who look at -- who just looks at a dollar set of accounts to actually reconcile those dollar profits back to the stated tax charge. Having said that the tax regime in Zimbabwe is by no means unfavorable. The headline tax rate is 25%. We get 100% capital allowances for capital expenditure in the year that you spend them. And so what that means is that if Blanket makes a profit of then I call it $40 million from that profit, you deduct this year's $30 million of capital expenditure. And then the resulting $10 million is the -- is what -- that's the amount that you pay income tax on. The difference comes through as withholding -- as deferred tax. Now clearly, that's not a cash tax. That will unwind in due course. Now the problem from a group perspective is that whilst the -- we can, if we try hard enough, makes sense of the income tax at the Blanket level, all of the losses that we incurred at Bilboes, about $7 million of losses at Bilboes, we can't offset those against the profits at Blanket because they're two separate entities. The tax losses at Bilboes are available for use in due core.

That part I understood it, but Blanket seems to have a large tax rate in the fourth quarter by itself.

Yes. That's because of the -- well, Blanket didn't make very much money in the first quarter and that's because of this difficulty of some of the taxes are calculated in local currency, some of the taxes are calculated in U.S. dollars. It is audited and it is correct. But it does make it very hard to see through and understand. The big difference is things that are realized tax losses or tax gains in U.S. dollars in local currency reverse.

Can you hear me?

Go ahead and try it, Chester.

Yes. Something else to add there is $1.7 million of additional deferred tax in the tax expense not due to then active tax rate moving from 24.7% to 25.75% increased your deferred tax liability.

That didn't affect Q1. That's a year end.

Probably Q4.

Yes.

I didn't realize it was that large. I thought it was only 1.5%. I thought probably not $1.7 million, but I didn't understand that.

It attaches to a very large amount of capital expenditure.

Okay. Of course.

Further questions?

Yes. There's 1 here from [Ian Joslin].

Can't hear you.

I'll just try and turn the volume up.

That's fine.

I just got a couple of questions. One that occurred as you were talking, I think you said that your -- the amount which you and cost to capital to the balance sheet reduce the cost Blanket is now becoming I think the central shaft is now becoming an ongoing operation means that costs are effectively, I think incurs this spend. If that's correct, presumably at some point depreciation will come down because what you would have added to your balance sheet and then depreciated no longer gets added to your balance sheet that is incurred in the period, so one should expect depreciation to come down on blanket? Is that reasonable?

Yes, that's what Chester was said. So because we depreciate the fixed assets over the -- on a per ounce basis. And so as we are going to add more ounces to the life of mine plan, that means that the depreciation as per ounce will come down. Balance on the other hand, buyers looking to reduce the useful lives of certain bits of infrastructure, like say, the Jethro Shaft or other stuff. Again, given the size of central shaft and I would expect that the benefit arising from the longer life of central shaft will outweigh the bad effect of shortening the lives of other assets.

Talking of the different shafts and how you're basically looking to rebalance production to the more profitable areas. I wondering, would it be -- I would find it helpful as a shareholder to understand what your original plans were? And obviously, something didn't like go according to plan, which resulted in the higher cost that you've incurred in quarter one and quarter two. So can you maybe help process by which that happens?

Someone didn't do the math right.

So it was just a planning issue, was it?

Yes. You said just a planning issue. It's quite a big planning issue, isn't it? But we can clearly see with the benefit of hindsight, our consumption has increased dramatically, when we started using the central shaft in earnest. And whilst we're in this period of using having -- the central shaft only services the mine below 750 meters, okay? On the other infrastructure largely services stuff above 750 meters. So for as long as we're continuing to operate from the old mine above 750 meters and the new mine below 750 meters, we will inevitably continue to use a large amount of infrastructure. When in a couple of years, we've gravitated towards mining exclusively below 750 meters then unless we find something very attractive above 750 to justify continued operations above that level. So unless that happens, then we will be in a position to completely stop the old infrastructure. And then, we're in a situation where we'll be relying exclusively on the central shaft.

So what you're saying was that wasn't properly in hindsight, that wasn't properly accounted for the fact that effectively you're doubling your operations. And I was also interested to see, I mean, I think you correctly said that the bad news was mainly quarter one and quarter two, but the market didn't react very well to the three results where you said that profits will be down. So I'm just wondering whether that was down to the market not really catching up with the bad news in the first two quarters.

I think we if you extrapolate from the earnings at the end of September were I think about -- I think around $0.17 by the end of September. And in September itself, earnings were about $0.35. And so as we went into Q4, with the expectation that Q4 will be about the same as Q3, it was not reasonable to expect the outturn for the year would be about $0.50, which was in line with -- certainly in line with one of the analysts. Perhaps the other analyst was a little bit of drift. And that assumption held true pretty much until we got into December. And then I think we may have been slow to anticipate the effect of some elevated costs, which we incurred in late -- in December on the effect for Q4. And I think the other thing that makes it -- that may sort of amplified that was because quarter one and quarter two have been so poor, it meant that the effect of earnings variations at the back end of the quarter had a disproportionate large effect.

I can see. Yes, that makes sense.

It's certainly something we will pay much closer attention to. But having said that, if we have started off the year as we'd expected to start off the year, a variation in quarter four of $0.10 or $0.15 wouldn't have been the upset that it actually turned out to be.

Do you think you could just take me through -- I appreciate Bilboes has been put on care and maintenance, but it would just be helpful to understand what led you to the decision that you thought that you could obviously make the effectively turn a stripping cost of the oxides before you got to the sulfides. You thought you could make that at least pay its way and how that turned out not to be the case.

Yes. That was -- well, again, we discussed that sort of length in quarter one and quarter two. So the management team at Bilboes have been mining oxides for 10 years. They were confident they could continue to do it. All they needed or they thought they needed was extra capital expenditure, which they couldn't fund themselves to do a certain amount of pushing back and stripping. But having incurred that cost to do the pushing back in the stripping, it then transpired what they expect to find in terms of oxide resources was either disappointing or just not there. And that was the problem. And having -- so that we're really being able to understand that in April, May and then by the end of June, we made the decision to return the business to care and maintenance but the contract had a three month notice period. So we had that runoff for an extra month, which was not comfortable. I would say that the oxides -- a certain element of oxide still remains and those oxides will be extracted in due course as part of the bigger sulfide project. The other thing I want to make absolutely clear is the Bilboes project has got 2.3 million ounces of sulfide material. The oxide was only ever a few tens of thousands of ounces, it's not material. And so with the benefit of hindsight, with the benefit of hindsight, we would not have embarked on that oxide exercise and we would have put the mine on care and maintenance, immediately uncapped on care and maintenance, so with the benefit of hindsight that's what we’ve done.

I'm sure you've discussed it already, but what you're saying presumably is that the amount of oxides that you thought were there, were not there and that was the problem. But then presumably the sulphides and that further in, if the level of confidence of knowledge of the oxides wasn't there, the question is and presumably, you've got the answer is that why is the level of confidence for the sulphides further down, still when you were let down by the level of confidence of the reserves?

Because the sulphides have been directly drilled, not all of the oxides have been directly drilled. And you're very welcome to visit and look at the core samples.

I'm sure you've asked yourself that question, but it just occurred to me that. So you basically -- the main drilling has been on the sulphide. And sort of I appreciate you're saying going to come back to the market. But -- and again, you probably outlined this, but I missed those meetings. Sort of what time scale roughly we're talking about bringing Bilboes into some sort of production we're talking two or three years?

If we -- the critical thing is going to be the funding. Within that the critical thing is going to be the debt funding. Debt fund has moved relatively slowly, but let's say we can get the funding in place by this time next year, which I think would be very optimistic and then probably two years to build.

And you're still looking at debt funding, not an equity raise?

We'll ask exactly one of the things that we're focusing on. We believe the project has a capacity to carry a high proportion of debt. And that's the first thing we'll do when we decided what's the best way forward will be to firm up our understanding on that with -- by having direct engagement with the lenders. I think we already have preliminary conversations with most likely lenders. And they're not going to be western banks that people know. They're going to be African development banks who've indicated a high degree of interest in this specific project, and they know this project because the previous management team at Bilboes had already engaged with them. And so that will be the first approach. And when it comes to funding the differential, we will consider any form of funding with a view to optimizing Caledonia NPV per share. And so that -- so in terms of non-debt funding, that would obviously think public equity markets private equity markets but also potential joint venture partners.

Okay. Very helpful.

Any further questions, Camilla?

We've got a few written questions that just hold on. Compared to the cost of power from ZESA and the solar plant, which is more expensive. Secondly, has the power reliability improved?

We get power from three sources, okay? We used to get power from ZESA. That's now been replaced by getting power we import power directly into Zimbabwe, through a mechanism called the intensive energy user group. We've been doing that since I think about April, if memory serves me right. And that's actually been an initiative fostered by the Zimbabwe government and that means that the power that we import is actually somewhat cheaper than the power we get from ZESA. Chester may have those numbers down. Chester, what's the power differential between buying from ZESA and buying from the IUG, do you have that in your head?

It’s about $0.035 per kilowatt hour.

So $0.035 different. Yes, it's not -- we don't pay IUG $0.035. So there is a slight benefit by beginning power through the IUG, but it still has to come through the grid. And so what it means is whilst we no longer suffer straight out power outages as you get into Africa, we do continue to get disruptions in our power supply and also peaks and troughs and the voltages because the ZESA grid is in very poor condition. So to deal with that the second source of power is done by diesel generators, which we've had for years. And then the third source of power, which we started using early in 2023, is the solar project, which provides about 1/4. That's a bit less than 1/4 of our power during sunny times. Our overall power consumption has increased considerably, but our average unit cost is much lower. So case in point the use of solar means that in 2023, we used just less than 1.5 million liters of diesel, whereas in 2022, before we had the solar project, we used nearly 4 million liters. And if diesel is costing you $1.50, $1.60, that's an appreciable saving.

Mark, maybe if I could add that there's no cost first to the solar. It's our solar plant. We own it. And we say approximately on a blended rate basis about $3.5 million per year.

But I think what Chester is saying is the solar plant is owned Caledonia. And so the benefit arising from the solar plant is not reflected in on-mine costs is reflected at the Caledonia level. So the mine buys solar power from the solar project at a rate which reflects its average unit consumption cost of power. The thinking behind that is that we neither want to benefit, not disadvantage the minority shareholders in Blanket through the solar project. So if we sold power from the solar project to Blanket the cost that would mean that the minority shareholders were benefiting from a project that they didn't fund. Again, it's quite a complex answer to quite a simple question, I'm sorry.

So the next question is just with regards to Bilboes. How soon can we expect gold production beyond 80,000 ounces?

As I said, if it takes a year to put the funding in place two years to build it, you can work from that. I got to say there's a highly indicative at this stage, that timing.

Next question, how do you plan to raise the funding for Bilboes? And do you have a time line?

As I've said, the initial focus is raising the -- getting a handle on the debt to the point of getting a credit approved term sheet, the balance will be equity. And the equity will come from internal cash flows, public market equity, private equity or joint venture partners.

The next question.

I mean, we will not be approaching the market for any, what I call non-debt funding until we got a better idea as to what the debt capacity is because, frankly, we do think it's going to be as cheap as debt funding.

What was the key driver of the advisory fees in 2023?

Well, we had our advisers and then because we have to pay for Bilboes advisers because they didn't have the money to pay for it themselves. And even if they had paid it would just come off their cash pile anyway. It was a very complex long-running transaction. I think our involvement in the final stage was I think, two years. It was a very long-running process, very, very complex. I'm afraid I don't enjoy paying up I have fees any more than anybody else.

I think -- I mean the other question I think has pretty much been answered. It's maybe, when do you expect the feasibility study to be completed, the other part where [inaudible].

We're working hard to get the consultants, the various consultants to -- I mean just to put more context on it. There's four main elements to the feasibility study. The first is the underlying geology. And there's been very, very little change there other than removing a small element of oxide material. So there's virtually no change there at all. There's been some change to the pit designs and the mining plan, with a view to optimizing the capital spend. But again, very, very minor. There's been no change to the metallurgical processing, but there have been quite substantial changes to the back end of the project, the tailings facility. And in that area, we're using the experience that we gained a blanket over the course of 2023 by where we put in a new tailings facility, but we did it on a modular basis. So that we could start using it quickly but we extended the capital expenditure over a longer period of time. And actually that was actually quite beneficial there. That work is effectively a brand-new study and that needs to be upgraded to a point at which it is capable of being published and can be a component of an overall feasibility study, which is to a relatively high level of confidence. And that's the time that. That's exactly what's been the time that's been taken right now. How long they take? I don't know, maybe it's six weeks, maybe it's two months. I would hope it's no longer than that.

At the moment, that's it for questions. Does anybody else have a question?

If we finish that just was a challenging year, as I said, mainly in the first half. We did recover in Q3. Q4 wasn't so bad, and we got off to a strong start in quarter one. So I'm hopeful that we've now reestablished Blanket as in a rightful position as a solid cash generator and we're making good progress, both on exploration at Blanket, which is considerably more optimistic than we expected. And we're making good progress with the feasibility study of Bilboes. So it has been frustrating, but hopefully we're going to see better days ahead. So I think with that, we'll finish unless there's any last question. Okay. I think we are done. Thank you for your attendance.

Thank you, everyone.