Author Topic: CALVF - Caledonia Mining  (Read 13219 times)

DTEJD1997

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Re: CALVF - Caledonia Mining
« Reply #30 on: July 14, 2019, 08:34:09 AM »
Awindenberger:

I have not yet reached out to management.  I will probably do so as the year progresses.

Management has discussed the power issue(s) in their YouTube videos.  One of the issues is that while they get power most of the work day, the QUALITY of the power is lacking.  That is, there are spikes & dips in voltage which is damaging to their machinery.  There are also very short outages.  If the power goes out for even a second, it will require machinery to be reset.  So what they really need is to get raw power off the grid and then have a power conditioner on site.  Sort of like a giant UPS for computers.

As for solar power, I suspect that their location is an area where it would make sense.  Lots & lots of strong sun light, relatively few days of rain.  At first I was thinking that it would make more sense to have diesel backup generators...but you would have to import the diesel.  This would require foreign currency AND logistical problems, AND taxation problems.  Solar power bypasses a lot of that.  No taxation/import restrictions on sun light!

So we will see.  I suspect that management will start to work on the power issues more fully when the 2nd shaft is up & running fully.  They will have 1 major thing completed, and then they can more fully turn their attention to the next problem.  They will also have the NEED for more electricity with 2 shafts running.

Finally, they are exploring other projects in ZIM.  If they can set up a solar plant at the Blanket Mine, could they also use that solar facility for a 2nd location?  Maybe?

Going to be interesting!


DTEJD1997

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Re: CALVF - Caledonia Mining
« Reply #31 on: July 24, 2019, 09:14:22 AM »
Hey all:

A few updates on CMCL.

1). They are going to spend about $1.5mm on diesel backup generators.  Still evaluating solar power.

2). Some of the previous operational problems have been worked out/solved.

3). Most important of all, sinking on the 2nd shaft is finally done.  They will now be equipping the shaft over the next 12 months.  Once that is done, significantly more ore can be brought to the surface. 

The company has spent 5 years and about $44mm sinking that shaft.

So that is good news indeed and the difficult part and most of the spending should be behind the company. 

Going to be interesting.

DTEJD1997

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Re: CALVF - Caledonia Mining
« Reply #32 on: September 01, 2019, 11:46:24 PM »
Hey all:

CMCL has gone up in price a bit since the last posting.  Gold prices have also gone up a bit.

Management continues to produce reasonably well.

There have been some small insider purchases.

A lot ways this stock can continue to move higher.

Anybody else watching/invested in this?

TwoCitiesCapital

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Re: CALVF - Caledonia Mining
« Reply #33 on: September 02, 2019, 09:15:57 AM »
I'm always interested in following it, but cannot buy it through either of my brokers so more of a spectator sport for me.

Xaston

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Re: CALVF - Caledonia Mining
« Reply #34 on: September 02, 2019, 02:02:13 PM »


Anybody else watching/invested in this?

I am.  I first heard about it the episode of The Intelligent Investing Podcast where you talked about it.

I've not historically spent much time at all looking at miners. I'm vaguely concerned that them being done sinking the shaft and now capex is going to drop appreciably is the same sort of story mining companies are always telling, that they're always about to start gushing cash now that their previous investments are going to start paying off and won't be necessary to continue making going forward.  Again, because I've never really sniffed around miners before I have no idea if that is a thing they regularly do, but I can imagine it being a thing that happens regularly.

DTEJD1997

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Re: CALVF - Caledonia Mining
« Reply #35 on: September 03, 2019, 02:48:50 PM »


Anybody else watching/invested in this?

I am.  I first heard about it the episode of The Intelligent Investing Podcast where you talked about it.

I've not historically spent much time at all looking at miners. I'm vaguely concerned that them being done sinking the shaft and now capex is going to drop appreciably is the same sort of story mining companies are always telling, that they're always about to start gushing cash now that their previous investments are going to start paying off and won't be necessary to continue making going forward.  Again, because I've never really sniffed around miners before I have no idea if that is a thing they regularly do, but I can imagine it being a thing that happens regularly.

Xaston:

I think you are absolutely right to be cautious about miners & their "projections" of capital expenditures and production figures.

Nothing is a certainty when it comes to mining, but I think CMCL is a bit different that most other miners.

1). Management has an incredible track record of capital allocation.

2). This new shaft is at their existing mine...an existing mine that has been in operation for over 100 years.  It is producing, will continue to produce, and they know where existing ore currently is AND they have a damn good idea where more is located.  When the new shaft is up & running, there is not a doubt in my mind that they will be producing more gold & probably significantly more.

In various presentations, management has talked about how inefficient some of their production is due to tunnels being dug over a 100 year period.  When the initial shaft was sunk, they didn't know precisely where to put it.  Thus, some miners have a 2 hour commute to get to the area where they are working.  It is like a snake's nest underground.  The new shaft will cut that commute time down by 75%+.  It will also increase the gross tonnage they are able to take out.  It will also improve safety & reliability.

A slam dunk of a capital investment if I ever saw one.

So I pass on the vast majority of miners that I look at, but CMCL is one of the rare ones that makes sense to me.