By: Reuters

Zimbabwe-focused Caledonia Mining CALq.L reported a 16% increase in second-quarter profit after higher gold prices helped offset lower grades and output.

The gold miner's net profit attributable to shareholders for the three months to June 30 was $23.8 million, up from $20.5 million a year earlier, it said on Monday.

It received an average gold price of $4,259 an ounce during the second quarter, up 34% year on year.

The company, which operates Blanket mine in Zimbabwe, said output at the mine was at 17,360 ounces in the quarter, down from 21,070 ounces in the same period last year.

The production decline was mostly owing to lower grades and recoveries. Output at the mine is projected at between 72,000 and 76,500 ounces for 2026.

Caledonia said construction work at its Bilboes gold mine will begin in October.

The mine is expected to start producing in 2028, reaching peak output of 200,000 ounces from 2029, which would make it the largest gold mine in Zimbabwe.

Caledonia raised $150 million of Bilboes funding with a seven-year convertible bond offering in January.

Prospective lenders for a further $300 million of project financing are well-advanced in their due diligence and credit processes, Caledonia added.

Caledonia maintained its quarterly dividend of $0.14 per share.

(Reporting by Olivia Kumwenda-Mtambo and Nelson BanyaEditing by David Goodman)