As gold prices continue to rise, Caledonia Mining reports a strong first quarter with it net profit attributable to shareholders going up by 34 per cent.
The company reported that its gold production was marginally increased this year with one per cent change since last year and produced this quarter 12,924 ounces of gold.
Due to an 8.2 per cent increase in the gold price since last year, the company profited despite production remaining more or less the same.
Because of higher gross profit, which increased 10 per cent since last year, the net profit attributable to shareholder increased to $3,1bn (£2,3bn) from $2,3bn (£1,7bn) in the first quarter of last year.
Earnings per share also increased by 51 per cent from 26.5 cents per share last year to 40.1 cents.
Why it's interesting
It has been a tough first quarter for some gold mining companies such as Randgold Resources whose profits plunged by a quarter but Caledonia Mining reported a strong start for 2018.
Despite having a predicted stable production with little increase, the now higher gold prices saw to the increase in profit and as a result higher earnings per share.
What Caledonia Mining said
Chief executive of Caledonian Mining Steve Curtis said:
“Gold production was marginally higher in the quarter compared to first quarter of 2017 and was in-line with our expectations. We expect that production will deliver the usual increase in the second half of the year as we see the benefit of the increased level of mine development in the first half of the year, which will improve our access to higher grade areas.”
The company seems to be doing well compared to some other industry rivals and expect to increase production in the second half of the year.