EX-99.1 2 exh99_1.htm EXHIBIT 99.1
 
Exhibit 99.1
 
 Caledonia Mining Corporation
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL INFORMATION
To the Shareholders of Caledonia Mining Corporation:
Management has prepared the information and representations in this interim report. The unaudited condensed consolidated financial statements of Caledonia Mining Corporation ("Group") have been prepared in accordance with International Accounting Standard 34 ("IAS 34") Interim Financial Reporting and, where appropriate, these statements include some amounts that are based on best estimates and judgment. Management have determined such amounts on a reasonable basis in order to ensure that the unaudited condensed consolidated financial statements are presented fairly, in all material respects.
The Management Discussion and Analysis ("MD&A") also includes information regarding the impact of current transactions, sources of liquidity, capital resources, operating trends, risks and uncertainties. Actual results in the future may differ materially from our present assessment of this information because future events and circumstances may not occur as expected.
The Group maintains adequate systems of internal accounting and administrative controls, consistent with reasonable cost. Such systems are designed to provide reasonable assurance that relevant and reliable financial information is produced.
Management is responsible for establishing and maintaining adequate internal controls over financial reporting ("ICFR"). Any system of internal controls over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
At September 30, 2015, management evaluated the effectiveness of the Group's internal control over financial reporting and concluded that such internal control over financial reporting was effective and there were no material weaknesses or changes in internal controls identified by management.
As part of their monitoring and oversight role, the Audit Committee performs a review and conducts discussions with management. No material exceptions were noted based on the additional procedures and no evidence of fraudulent activity was found.
The Board of Directors, through its Audit Committee, is responsible for ensuring that management fulfils its responsibilities for financial reporting and internal control. The Audit Committee is composed of three independent directors. This Committee meets periodically with management and the external auditor to review accounting, auditing, internal control and financial reporting matters.
These condensed consolidated financial statements have not been reviewed by the Group's auditors.
The unaudited condensed consolidated financial statements for the period ended September 30, 2015 were approved by the Board of Directors and signed on its behalf on November 13, 2015.
 
(Signed) S. R. Curtis
(Signed) M. Learmonth
 
 
Chief Executive Officer
Chief Financial Officer
 
1
Caledonia Mining Corporation
Condensed consolidated statements of profit or loss and other comprehensive income
 
In thousands of Canadian dollars (except for earnings per share amounts)

Unaudited
      
For the 3 months ended September 30
    
For the 9 months ended September 30
  
   
Note
    
2015
    
2014
    
2015
    
2014
  
                     
Revenue
        
15,802
      
13,492
      
46,810
      
46,110
  
Less: Royalty
        
(791
)
    
(945
)
    
(2,344
)
    
(3,230
)
          Production costs
  
6
      
(10,170
)
    
(7,174
)
    
(28,924
)
    
(23,730
)
          Depreciation
          
(1,189
)
    
(1,029
)
    
(3,252
)
    
(3,112
)
Gross profit
          
3,652
      
4,344
      
12,290
      
16,038
  
Administrative expenses
  
7
      
(2,176
)
    
(1,754
)
    
(6,518
)
    
(5,361
)
Foreign exchange gain
          
1,847
      
389
      
2,611
      
517
  
Other income
          
43
      
52
      
71
      
57
  
Operating profit
          
3,366
      
3,031
      
8,454
      
11,251
  
Finance income
          
-
      
11
      
1
      
11
  
Finance cost
          
(451
)
    
(27
)
    
(539
)
    
(97
)
Net finance costs
          
(451
)
    
(16
)
    
(538
)
    
(86
)
Profit before income tax
          
2,915
      
3,015
      
7,916
      
11,165
  
Income and other tax expense
          
(930
)
    
(1,747
)
    
(3,341
)
    
(4,284
)
Profit for the period
          
1,985
      
1,268
      
4,575
      
6,881
  
Other comprehensive income
                                      
Items that are or may be reclassified subsequently to profit or loss
                                      
Foreign currency translation differences for foreign operations
          
3,333
      
2,562
      
6,280
      
2,408
  
Other comprehensive income for the period, net of income tax
          
3,333
      
2,562
      
6,280
      
2,408
  
Total comprehensive income for the period
          
5,318
      
3,830
      
10,855
      
9,289
  
Profit attributable to:
                                      
Shareholders of the Company
          
1,694
      
1,112
      
3,572
      
5,377
  
Non-controlling interests
          
291
      
156
      
1,003
      
1,504
  
Profit for the period
          
1,985
      
1,268
      
4,575
      
6,881
  
Total comprehensive income attributable to:
                                      
Shareholders of the Company
          
4,922
      
3,637
      
9,662
      
7,769
  
Non-controlling interests
          
396
      
193
      
1,193
      
1,520
  
Total comprehensive income for the period
          
5,318
      
3,830
      
10,855
      
9,289
  
Earnings per share
                                      
Basic earnings per share
        
$
0.033
    
$
0.022
    
$
0.067
    
$
0.105
  
Diluted earnings per share
        
$
0.033
    
$
0.022
    
$
0.067
    
$
0.105
  

The accompanying notes on pages 6 to 16 are an integral part of these condensed consolidated interim financial statements.
On behalf of the Board:  "S.R Curtis"- Chief Executive Officer and "M Learmonth" - Chief Financial Officer
2
Caledonia Mining Corporation
Condensed consolidated statements of financial position
 
(In thousands of Canadian dollars)

       
Unaudited
    
Audited
  
As at
      
September 30,
    
December 31,
  
   
Note
    
2015
    
2014
  
Assets
            
Property, plant and equipment
  
8
      
58,298
      
40,388
  
Total non-current assets
          
58,298
      
40,388
  
                       
Inventories
  
9
      
8,542
      
7,571
  
Prepayments
          
1,826
      
348
  
Trade and other receivables
  
10
      
5,529
      
2,040
  
Cash and cash equivalents
  
11
      
22,422
      
26,838
  
Total current assets
          
38,319
      
36,908
  
Total assets
          
96,617
      
77,296
  
                       
Equity and liabilities
                      
Share capital
          
57,607
      
57,607
  
Reserves
          
165,973
      
158,883
  
Retained loss
          
(158,532
)
    
(159,759
)
Equity attributable to shareholders
          
65,048
      
57,731
  
Non-controlling interests
          
1,997
      
804
  
Total equity
          
67,045
      
58,535
  
                       
Liabilities
                      
Provisions
          
3,233
      
2,888
  
Deferred tax liability
          
14,343
      
10,092
  
Total non-current liabilities
          
17,576
      
12,980
  
                       
Trade and other payables
          
7,040
      
3,791
  
Income taxes payable
          
2,187
      
1,990
  
Bank Overdraft
  
11
      
2,769
      
-
  
Total current liabilities
          
11,996
      
5,781
  
Total liabilities
          
29,572
      
18,761
  
Total equity and liabilities
          
96,617
      
77,296
  
 
The accompanying notes on pages 6 to 16 are an integral part of these condensed consolidated interim financial statements.
On behalf of the Board:  "S.R Curtis"- Chief Executive Officer and "M Learmonth" - Chief Financial Officer
3

Caledonia Mining Corporation
Condensed consolidated statements of changes in equity
For the nine months ended September 30
(expressed in thousands of Canadian dollars)
Unaudited
  
Share Capital
    
Foreign Currency
Translation Reserve
    
Contributed Surplus
    
Share based Payment Reserve
    
Retained Loss
    
Total
    
Non-controlling interests (NCI)
    
Total Equity
  
                                 
Balance at December 31, 2013
    
57,607
      
319
      
140,000
      
15,750
      
(161,651
)
    
52,025
      
(51
)
    
51,974
  
Transactions with owners:
                                                                
Dividend paid
    
-
      
-
      
-
      
-
      
(2,351
)
    
(2,351
)
    
(848
)
    
(3,199
)
Total comprehensive income:
                                                                
Profit for the period
    
-
      
-
      
-
      
-
      
5,377
      
5,377
      
1,504
      
6,881
  
Other comprehensive income
    
-
      
2,392
      
-
      
-
      
-
      
2,392
      
16
      
2,408
  
Balance at September 30, 2014
    
57,607
      
2,711
      
140,000
      
15,750
      
(158,625
)
    
57,443
      
621
      
58,064
  
Balance at December 31, 2014
    
57,607
      
4,133
      
140,000
      
15,750
      
(159,759
)
    
57,731
      
804
      
58,535
  
Transactions with owners:
                                                                
Dividend paid
    
-
      
-
      
-
      
-
      
(2,345
)
    
(2,345
)
    
-
      
(2,345
)
Total comprehensive income:
                                                                
Profit for the period
    
-
      
-
      
-
      
-
      
3,572
      
3,572
      
1,003
      
4,575
  
Other comprehensive income
    
-
      
6,090
      
-
      
-
      
-
      
6,090
      
190
      
6,280
  
Balance at September 30, 2015 Unaudited
    
57,607
      
10,223
      
140,000
      
15,750
      
(158,532
)
    
65,048
      
1,997
      
67,045
  
The accompanying notes on pages 6 to 16 are an integral part of these condensed consolidated interim financial statements.
 
On behalf of the Board:  "S.R Curtis"- Chief Executive Officer and "M Learmonth" - Chief Financial Officer
 
4
 
Caledonia Mining Corporation
Condensed consolidated statements of cash flows
 
(In thousands of Canadian dollars)
 
                    
                     
Unaudited
      
For the 3 months ended September 30
    
For the 9 months ended September 30
  
Cash flows from operating activities
  
Note
    
2015
    
2014
    
2015
    
2014
  
                     
Cash flows generated from operating activities
  
12
      
1,132
      
5,057
      
7,881
      
15,453
  
Interest received
          
-
      
11
      
1
      
11
  
Interest paid
          
(33
)
    
(27
)
    
(94
)
    
(97
)
Tax paid
          
(226
)
    
(1,410
)
    
(1,014
)
    
(3,851
)
Cash from operating activities
          
873
      
3,631
      
6,774
      
11,516
  
                                       
Cash flows from investing activities
                                      
Property, plant and equipment additions
          
(6,890
)
    
(1,379
)
    
(14,142
)
    
(4,961
)
Proceeds from sale of property, plant and equipment
          
71
      
72
      
129
      
72
  
Net cash used in investing activities
          
(6,820
)
    
(1,307
)
    
(14,013
)
    
(4,889
)
                                       
Cash flows from financing activities
                                      
Dividend paid
          
(779
)
    
(1,312
)
    
(2,345
)
    
(3,199
)
Net cash used in financing activities
          
(779
)
    
(1,312
)
    
(2,345
)
    
(3,199
)
Net (decrease)/ increase in cash and cash equivalents
          
(6,726
)
    
1,012
      
(9,584
)
    
3,428
  
Cash and cash equivalents at  beginning period
          
23,683
      
25,842
      
26,838
      
23,426
  
Effect of exchange rate fluctuations on cash held
          
2,696
      
-
      
2,398
      
-
  
Cash and cash equivalents at end of period
  
11
      
19,653
      
26,854
      
19,653
      
26,854
  

The accompanying notes on pages 6 to 16 are an integral part of these condensed consolidated interim financial statements.
On behalf of the Board:  "S.R Curtis"- Chief Executive Officer and "M Learmonth" - Chief Financial Officer

5
 
Caledonia Mining Corporation
Notes to the Condensed Consolidated Financial Statements
For the nine months ended September 30, 2015
(expressed in thousands of Canadian dollars)
____________________________________________________________________________________________

1            Reporting entity
Caledonia Mining Corporation (the "Company") is a company domiciled in Canada. The address of the Company's registered office is Suite 4009, 1 King Street West, Toronto, Ontario, M5H 1A1, Canada. The Condensed Consolidated Financial Statements of the Group as at and for the nine months ended September 30, 2015 comprises the Company and its subsidiaries (together referred to as the "Group" and individually as "Group entities"). The Group is primarily involved in the operation of a gold mine and the acquisition, exploration and development of mineral properties for the exploration of base and precious metals.
2          Basis for preparation
(a) Statement of compliance
These unaudited Condensed Consolidated Interim Financial Statements have been prepared in accordance with IAS 34 Interim Financial Reporting and do not include all the information required for full annual financial statements. Accordingly, certain information and disclosures normally included in the annual Financial Statements prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) have been omitted or condensed. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the financial position and performance of the Group since the last annual consolidated financial statements as at and for the year ended December 31, 2014.
(b) Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for the following item in the statement of financial position:
· equity-settled share-based payment arrangements are measured at fair value on grant date.
(c) Presentation currency
These consolidated financial statements are presented in Canadian dollars, which is the functional currency of the Company. All financial information presented in Canadian dollars has been rounded to the nearest thousand unless otherwise stated.
3          Use of estimates and judgements
Management makes estimates and assumptions about the future that affect the reported amounts of assets and liabilities. Estimates and assumptions are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual experience may differ from these estimates and assumptions. The effect of a change in an accounting estimate is recognized prospectively by including it in comprehensive income.
6
Caledonia Mining Corporation
Notes to the Condensed Consolidated Financial Statements
For the nine months ended September 30, 2015
(expressed in thousands of Canadian dollars)
____________________________________________________________________________________________
 
3            Use of estimates and judgements - (continued)
In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at December 31, 2014.
The condensed consolidated interim financial statements should be read in conjunction with the Group's annual financial statements for the year ended December 31, 2014.
4          Significant accounting policies
The same accounting policies and methods of computation have been applied consistently to all periods presented in these condensed consolidated interim financial statements as compared to the Group's annual financial statements for the year ended December 31, 2014. In addition, the accounting policies have been applied consistently by the Group entities.
5            Blanket Zimbabwe Indigenisation Transaction
During 2012 the Group, to comply with Zimbabwean law that requires that indigenous Zimbabweans own at least 51% of the Blanket Mine, consequently the Group entered into an agreement to sell a 41% ownership interest in Blanket Mine as follows:
· A 16% interest to the National Indigenisation and Economic Empowerment Fund ("NIEEF") for US$11.74 million.
· A 15% interest to Fremiro, which is owned by Indigenous Zimbabweans, for US$11.01 million.
· A 10% interest to Blanket Employee Trust Services (Private) Limited (BETS) for the benefit of present and future managers and employees for US$7.34 million. The shares in BETS are held by the Blanket Mine Employee Trust (Employee Trust) with Blanket Mine's employees holding participation units in the Employee Trust.

In addition a 10% ownership interest was donated to the Gwanda Community Share Ownership Trust (Community Trust).

The Group facilitated the vendor funding of these transactions which are repaid by way of dividends from Blanket Mine. 80% of dividends declared by Blanket Mine are used to repay such loans and the remaining 20% unconditionally accrues to the respective Indigenous Shareholders.

Outstanding balances on the facilitation loans attract interest at a rate of 10% over the 12-month LIBOR. The timing of the repayment of the loans depends on the future financial performance of Blanket Mine and the extent of future dividends declared by Blanket Mine.

The facilitation loans relating to the group were declared by Caledonia Holdings Zimbabwe (Blanket Mine's parent company) to a wholly-owned subsidiary of Caledonia Mining Corporation as a dividend in specie on February 14, 2013 and withholding tax amounting to US$1.504 million was paid and expensed on March 5, 2013.

7
Caledonia Mining Corporation
Notes to the Condensed Consolidated Financial Statements
For the nine months ended September 30, 2015
(expressed in thousands of Canadian dollars)
____________________________________________________________________________________________
 
5     Blanket Zimbabwe Indigenisation Transaction – (continued)
Accounting treatment
The directors of Caledonia Holdings Zimbabwe (Private) Limited ("CHZ"), a wholly owned subsidiary of the Company, performed an assessment, using the requirements of IFRS 10: Consolidated Financial Statements (IFRS 10), and concluded that CHZ should continue to consolidate Blanket Mine and accounted for the transaction as follows:
● Non-controlling interests (NCI) are recognised on the portion of shareholding upon which dividends declared by Blanket Mine accrue unconditionally to equity holders as follows:
 
(a) 20% of the 16%  shareholding of NIEEF;
 
(b) 20% of the 15% shareholding of Fremiro;
(c) 100% of the 10% shareholding of the Community Trust.
● This effectively means that NCI is recognised at Blanket Mine level at 16.2% of the net assets.
 
●
 The remaining 80% of the shareholding of NIEEF and Fremiro is recognised as non-controlling interests to the extent that their attributable share of the net asset value of Blanket Mine exceeds the balance on the facilitation loans including interest. At September 30, 2014 the attributable net asset value did not exceed the balance on the respective loan accounts and thus no additional NCI was recognised.
 
● The transaction with the BETS is accounted for in accordance with IAS 19 Employee Benefits (profit sharing arrangement) as the ownership of the shares does not ultimately pass to the employees. The employees are entitled to participate in 20% of the dividends accruing to the 10% shareholding in Blanket Mine if they are employed at the date of such distribution. To the extent that 80% of the attributable dividends exceed the balance on the BETS facilitation loan they will accrue to the employees at the date of such declaration.
 
● The Employee Trust and BETS are structured entities which are effectively controlled and consolidated by Blanket Mine. Accordingly the shares held by BETS are effectively treated as treasury shares in Blanket Mine and no NCI is recognised.
 
 
USD 000's
Shareholding
NCI Recognised
NCI subject to facilitation  loan
Balance of facilitation loan at 30 September 2015 #
Dec 31
2014
NIEEF
16%
3.2%
12.8%
11,909
11,909
Fremiro
15%
3.0%
12.0%
11,657
11,657
Community Trust
10%
10.0%
-
-
-
BETS ~
10%
-*
-*
7,772
7,772
 
51%
16.2%
24.8%
US$31,338
US$31,338
 
8
Caledonia Mining Corporation
Notes to the Condensed Consolidated Financial Statements
For the nine months ended September 30, 2015
(expressed in thousands of Canadian dollars)
____________________________________________________________________________________________
 
5   Blanket Zimbabwe Indigenisation Transaction – (continued)

The balance on the facilitation loans is reconciled as follows:

   
USD 000's
  
Subscription price funded on loan account – at December 31, 2014
    
31,338
  
Interest accrued &
    
-
  
Dividends used to repay loans &
    
-
  
Balance at September 30, 2015
    
31,338
  

& A moratorium has been placed on interest until dividends are resumed by Blanket Mine.
*The shares held by BETS are effectively treated as treasury shares (see above).
~ Accounted for under IAS19 Employee Benefits.
# Facilitation loans are accounted for as equity instruments and are accordingly not recognised as loans receivable (see above).
 
Advance dividends

In anticipation of completion of the underlying subscription agreements, Blanket Mine agreed to an advance dividend arrangement with the Community Trust against their right to receive dividends declared by Blanket Mine on their shareholding as follows:
· A US$2 million payment on or before September 30, 2012;
· A US$1 million payment on or before February 28, 2013; and
· A US$1 million payment on or before April 30, 2013.

These advance payments were debited to a loan account bearing interest at a rate of 10% over the 12-month LIBOR.  The loan is repayable by way of set off of future dividends on the Blanket Mine shares owed by the Community Trust.
The advance dividend payments were recognised as distributions to shareholders. The loans arising are not recognised as loans receivable, because repayment is by way of uncertain future dividends to be declared.

9
Caledonia Mining Corporation
Notes to the Condensed Consolidated Financial Statements
For the nine months ended September 30, 2015
(expressed in thousands of Canadian dollars)
 
5   Blanket Zimbabwe Indigenisation Transaction – (continued)

The movement in the advance dividend loan is reconciled as follows:

   
Community Trust
  
   
US$
  
Balance at December 31, 2014
    
3,237
  
Interest accrued &
    
-
  
Dividends used to repay advance dividends &
    
-
  
Balance at September 30, 2015
    
3,237
  

& A moratorium has been placed on interest until dividends are resumed by Blanket Mine.
6                Production costs
   
September 30
2015
    
September 30
2014
  
         
Salaries and wages
    
10,960
      
8,120
  
Consumable materials
    
14,650
      
12,668
  
Site restoration
    
28
      
28
  
Exploration
    
334
      
313
  
Safety
    
499
      
402
  
On mine administration
    
2,453
      
2,199
  
     
28,924
      
23,730
  

7                Administrative expenses
 
   
September 30
2015
    
September 30
2014
  
         
Investor  relations
    
513
      
360
  
Management contract fee
    
-
      
768
  
Professional consulting fees
    
425
      
452
  
Audit fee
    
256
      
141
  
Legal fee and disbursements
    
279
      
510
  
Accounting services fee
    
202
      
23
  
Listing fees
    
146
      
161
  
Travel
    
333
      
244
  
Donations
    
-
      
10
  
Directors fees
    
247
      
275
  
Salaries and wages
    
2,194
      
1,539
  
Tax penalties
    
209
      
-
  
Unrecoverable VAT expenses
    
334
      
-
  
Zambian costs
    
960
      
449
  
Other
    
420
      
429
  
     
6,518
      
5,361
  
 
10
Caledonia Mining Corporation
Notes to the Condensed Consolidated Financial Statements
For the nine months ended September 30, 2015
(expressed in thousands of Canadian dollars)
____________________________________________________________________________________________

8                Property, plant and equipment
 
Land and
buildings
Mineral properties being depreciated
Mineral properties
not depreciated
Plant and
equipment
Assets under construction
Fixtures and fittings
Motor
vehicles
Total
                 
Cost
                
                 
Balance at January 1, 2014
8,152
14,991
16,320
21,476
-
1,306
2,219
64,464
Additions
592
3,390
1,864
1,921
-
122
19
7,908
Reallocations between asset classes
(640)
1,834
-
(1,197)
-
3
-
-
Disposals
-
-
-
(304)
-
-
(9)
(313)
Foreign exchange movement
742
1,689
(2,763)
2,482
-
(44)
61
2,163
Balance at December 31, 2014
8,846
21,904
15,421
24,378
-
1,387
2,290
74,226
Additions
-
9,887
1,486
651
*1,696
120
302
14,142
Disposals
(25)
-
-
(46)
-
  
(80)
(151)
Reallocations between asset classes
(298)
1,447
  
(101)
(1,048)
-
-
-
De-recognition of  Zambian assets**
-
-
(12,294)
(283)
  
(75)
(77)
(12,729)
Foreign exchange movement
1,299
4,305
(709)
3,846
-
111
370
9,222
Balance at September 30, 2015
9,822
37,543
3,904
28,445
648
1,543
2,805
84,710
 
* Two winders were purchased by Caledonia Mining South Africa Proprietary Limited of which one has been transferred to the Blanket Mine and the other is currently in the process of refurbishment. The winders are earmarked for installation at the Blanket Mine as part of the Revised Investment Plan.

** The Group surrendered all exploration rights relating to the Zambian operations for a nominal value. The Zambian assets were fully impaired in previous periods.
11
Caledonia Mining Corporation
Notes to the Condensed Consolidated Financial Statements
For the nine months ended September 30, 2015
(expressed in thousands of Canadian dollars)
____________________________________________________________________________________________
 
8            Property, plant and equipment - (continued)
 
Land and
buildings
Mineral properties being depreciated
Mineral properties
not depreciated
Plant and equipment
Assets under construction
Fixtures and
fittings
Motor vehicles
Total
Depreciation and Impairment losses
                
                 
Balance at January 1, 2014
1,734
2,826
14,333
9,886
-
1,063
1,174
31,016
Depreciation for the year
576
810
-
2,088
-
86
357
3,908
Disposals
-
-
-
(236)
-
-
(9)
(245)
Impairment
         -
-
-
180
-
16
-
196
Foreign exchange movement
(252)
358
(930)
(140)
-
(65)
(8)
(1,037)
Balance at December 31, 2014
2,049
3,994
13,403
11,778
-
1,100
1,514
33,838
Depreciation for the period
527
421
-
1,895
-
83
314
3,240
Disposals
-
-
-
(42)
-
`-
(51)
(93)
De-recognition of  Zambian assets
-
-
(12,294)
(283)
-
(75)
(77)
(12,729)
Foreign exchange movement
349
654
(1,109)
1,984
-
44
234
2,156
Balance at September 30, 2015
2,925
5,069
-
15,332
-
1,152
1,934
26,412
 
Carrying amounts
                
At December 31, 2014
6,797
17,910
2,018
12,600
-
287
776
40,388
At September 30, 2015
6,897
32,474
3,904
13,113
648
391
871
58,298
12
Caledonia Mining Corporation
Notes to the Condensed Consolidated Financial Statements
For the nine months ended September 30, 2015
(expressed in thousands of Canadian dollars)
____________________________________________________________________________________________
 
9                Inventories
   
September 30
    
December 31
  
   
2015
    
2014
  
         
Consumable stores
    
8,542
      
6,932
  
Gold in progress
    
-
      
639
  
     
8,542
      
7,571
  
Inventory is comprised of gold in circuit at Blanket and consumable stores utilised by Blanket Mine.
10                Trade and other receivables
   
September 30
    
December 31
  
   
2015
    
2014
  
         
Bullion sales receivable
    
2,309
      
-
  
VAT receivables
    
2,316
      
1,169
  
Deposits for stores and equipment and other receivables
    
904
      
871
  
     
5,529
      
2,040
  
The bullion receivable was received shortly after the delivery of the gold.
11                Cash and cash equivalents
   
September 30
    
December 31
  
   
2015
    
2014
  
         
Bank balances
    
22,422
      
26,838
  
Cash and cash equivalents in the statement of financial position
    
22,422
      
26,838
  
Bank overdrafts used for cash management purposes
    
(2,769
)
    
-
  
Cash and cash equivalents in the statement of cash flows
    
19,653
      
26,838
  
13
Caledonia Mining Corporation
Notes to the Condensed Consolidated Financial Statements
For the nine months ended September 30, 2015
(expressed in thousands of Canadian dollars)
____________________________________________________________________________________________
 
12                  Cash flow information
Non-cash items and information presented separately on the cash flow statement:
 
   
September 30
    
September 30
  
   
2015
    
2014
  
         
Operating profit
    
8,454
      
11,251
  
Adjustments for:
                
Site restoration
    
28
      
28
  
Profit on sale of property, plant and equipment
    
(25
)
        
Depreciation
    
3,252
      
3,112
  
Cash generated by operations before working capital changes
    
11,709
      
13,874
  
Inventories
    
404
      
431
  
Prepayments
    
(3,551
)
    
(33
)
Trade and other receivables
    
(7,016
)
    
1,502
  
Trade and other payables
    
6,335
      
(321
)
Cash generated by operating activities
    
7,881
      
15,453
  
 
13                  Operating Segments
 
The Group's operating segments have been identified based on geographic areas. The Group has four reportable segments as described below, which are the Group's strategic business units. The strategic business units are managed separately because they require different technology and marketing strategies. For each of the strategic business units, the Group's CEO reviews internal management report on at least a quarterly basis. The following geographical areas describe the operations of the Group's reportable segments: Corporate, Zimbabwe, South Africa and Zambia. The accounting policies of the reportable segments are the same as described in note 4.

The Zimbabwe operating segments comprise an operating gold mine. The Zambia segments consist of the discontinued Nama copper project and cobalt project. The South Africa geographical segment comprises a gold mine under care and maintenance as well as sales made by Caledonia Mining South Africa Proprietary Limited to the Blanket Mine.

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before income tax, as included in the internal management reports that are reviewed by the Group's CFO. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.

14
Caledonia Mining Corporation
Notes to the Condensed Consolidated Financial Statements
For the nine months ended September 30, 2015
(expressed in thousands of Canadian dollars)
____________________________________________________________________________________________
 
13                          Operating Segments – (continued)
For the 9 months ended 30 September 2015
                      
2015
  
Corporate
    
Zimbabwe
    
South Africa
    
Zambia
    
Inter-group eliminations
adjustments
    
Total
  
                         
External Revenue
    
-
      
46,810
      
10,798
      
-
      
(10,798
)
    
46,810
  
Royalty
    
-
      
(2,344
)
    
-
      
-
      
-
      
(2,344
)
Production costs
    
-
      
(28,955
)
    
(10,277
)
    
-
      
10,308
      
(28,924
)
Management fee
    
-
      
(3,961
)
    
3,961
      
-
      
-
      
-
  
Administrative expenses
    
(268
)
    
(234
)
    
(5,057
)
    
(959
)
    
-
      
(6,518
)
Depreciation
    
-
      
(3,347
)
    
(38
)
    
-
      
133
      
(3,252
)
Other (expense)/income
    
-
      
54
      
5
      
12
      
-
      
71
  
Foreign exchange gain/(loss)
    
219
      
-
      
2,392
      
-
      
-
      
2,611
  
Finance income
    
-
      
-
      
1
      
-
      
-
      
1
  
Finance expense
    
-
      
(135
)
    
(404
)
    
-
      
-
      
(539
)
Segment profit before income tax
    
(49
)
    
7,888
      
1,381
      
(947
)
    
(357
)
    
7,916
  
Income tax expense
    
(359
)
    
(2,691
)
    
(291
)
    
-
      
-
      
(3,341
)
Segment profit after income tax
    
(408
)
    
5,197
      
1,090
      
(947
)
    
(357
)
    
4,575
  
                         
Geographic segment assets as at 30 September 2015
                          
Current assets
    
7,947
      
17,312
      
16,220
      
9
      
(3,169
)
    
38,319
  
Non-current (excluding intercompany assets)
    
56
      
59,020
      
1,092
      
-
      
(1,870
)
    
58,298
  
Intercompany assets
    
132,748
      
-
      
39,755
              
(172,503
)
    
-
  
Expenditure on property, plant and equipment
    
-
      
12,446
      
*1,696
      
-
      
-
      
14,142
  
Geographic segment liabilities :
                                                
Current liabilities
    
(1,203
)
    
(9,438
)
    
(2,011
)
    
-
      
-
      
(11,996
)
Non-current liabilities (excluding intercompany liabilities)
    
-
      
(16,967
)
    
(609
)
    
-
      
-
      
(17,576
)
Intercompany liabilities
    
(45,981
)
    
(2,555
)
    
(87,355
)
    
(34,734
)
    
170,625
      
-
  
 
* Two winders were purchased by Caledonia Mining South Africa Proprietary Limited of which one has been transferred to the Blanket Mine and the other is currently in the process of refurbishment. The winders are earmarked for installation at the Blanket Mine as part of the Revised Investment Plan.
 
15
Caledonia Mining Corporation
Notes to the Condensed Consolidated Financial Statements
For the nine months ended September 30, 2015
(expressed in thousands of Canadian dollars)
____________________________________________________________________________________________
 
13 Operating Segments – (continued)
 
For the 9 months ended 30 September 2014
      
2014
  
Corporate
    
Zimbabwe
    
South Africa
    
Zambia
    
Inter-group eliminations
adjustments
    
Total
  
                         
External Revenue
    
4,069
      
46,109
      
9,686
      
-
      
(13,754
)
    
46,110
  
Royalty
    
-
      
(3,230
)
    
-
      
-
      
-
      
(3,230
)
Production costs
    
-
      
(23,950
)
    
(5,584
)
    
(220
)
    
6,024
      
(23,730
)
Management fee
    
-
      
(3,389
)
    
-
      
-
      
3,389
      
-
  
Administrative expenses
    
(2,660
)
    
(218
)
    
(2,034
)
    
(449
)
    
-
      
(5,361
)
Depreciation
    
-
      
(3,069
)
    
(14
)
    
(100
)
    
71
      
(3,112
)
Other (expense)/income
    
-
      
(10
)
    
67
      
-
      
-
      
57
  
Foreign exchange gain/(loss)
    
45
      
-
      
1,138
      
-
      
(666
)
    
517
  
Finance income
    
11
      
-
      
-
      
-
      
-
      
11
  
Finance expense
    
-
      
(97
)
    
-
      
-
      
-
      
(97
)
Segment profit before income tax
    
1,465
      
12,146
      
3,259
      
(769
)
    
(4,936
)
    
11,165
  
Income tax expense
    
(651
)
    
(3,049
)
    
(584
)
    
-
      
-
      
(4,284
)
Segment profit after income tax
    
814
      
9,097
      
2,675
      
(769
)
    
(4,936
)
    
6,881
  
 
Geographic segment assets as at 31 December 2014
  
Current assets
    
12,520
      
12,148
      
13,700
      
51
      
(1,511
)
    
36,908
  
Non-current assets
    
56
      
41,646
      
356
      
-
      
(1,670
)
    
40,388
  
Expenditure on property, plant and equipment
    
-
      
7,905
      
52
      
107
      
(156
)
    
7,908
  
Intercompany balances
    
118,502
      
1,748
      
33,788
      
-
      
(154,038
)
    
-
  
                 
Geographic segment liabilities as at 31 December 2014
                  
Current liabilities
    
(1,146
)
    
(2,804
)
    
(1,831
)
    
-
      
-
      
(5,781
)
Non-current liabilities
    
-
      
(12,291
)
    
(689
)
    
-
      
-
      
(12,980
)
Intercompany balances
    
(39,479
)
    
(1,049
)
    
(84,187
)
    
(29,323
)
    
154,038
      
-
  

Major customer
Revenues from Fidelity Printers and Refiners in Zimbabwe amounted to $46,810 (2014: $46,110) for the period ended September 30, 2015.

16
Directors and Management at November 13, 2015
 
 
BOARD OF DIRECTORS
OFFICERS
L.A. Wilson (1)(2)(3)(4)(7) - Chairman
S. R. Curtis
Non- executive Director
Chief Executive Officer
New York, United States of America
Johannesburg, South Africa
   
S. R. Curtis (5)(7)
M. Learmonth (5)(7)
Chief Executive Officer
Chief Financial Officer and Vice-President Investor Relations and Corporate Development
 Johannesburg, South Africa
Johannesburg, South Africa
   
J. Johnstone (2)(4)(6)(7)
D. Roets (6)(7)
Non-executive Director
Chief Operating Officer
Gibsons, British Columbia, Canada
Johannesburg, South Africa
   
J. L. Kelly (1)(2)(3)(7)
Dr.  T. Pearton (5)(6)(7)
Non- executive Director
Vice-President Exploration
New York, United States of America
Johannesburg, South Africa
   
D. Henderson
  
Non- executive Director
 DSA Corporate Services Inc.
Toronto, Ontario, Canada
Company Secretary
 
36 Toronto Street – Suite1000
J. Holtzhausen (1)(2)(4)(5)(6)(7) - Chairman Audit Committee
Toronto, Ontario, M5C 2C5
Non- executive Director
  
Cape Town, South Africa
  
 
Board Committees
M. Learmonth (5)(7)
(1)    Audit Committee
Chief Financial Officer and Vice-President Investor Relations
(2)  Compensation Committee
and Corporate Development
(3)  Corporate Governance Committee
 Johannesburg, South Africa
(4)  Nominating Committee
 
(5)  Disclosure Committee
 
(6)  Technical Committee
 
(7)  Strategic Planning Committee

17

 
CORPORATE DIRECTORY as at November 13, 2015
CORPORATE OFFICES
Canada - Head Office
Caledonia Mining Corporation
SOLICITORS
Borden Ladner Gervais LLP
Suite 4100, Scotia Plaza
Suite 4009, 1 King West
Toronto, Ontario M5H 1A1
40 King Street West
Toronto, Ontario M5H 3Y4 Canada
Tel:(1)(416) 369-9835 Fax:(1)(416) 369-0449
info@caledoniamining.com
 
 
 
AUDITORS
South Africa – Africa Office
Caledonia Mining South Africa Proprietary Limited
KPMG Inc.
85 Empire Road
P.O. Box 4628
Weltevreden Park 1715
Parktown 2193
South Africa
South Africa
Tel: +27 83 445 1400, Fax: + 27 11 647 6018
Tel: (27)(11) 447-2499
 
REGISTRAR & TRANSFER AGENT
Zimbabwe
Caledonia Holdings Zimbabwe (Limited)
Computershare
100 University Ave, 8th Floor,
P.O. Box CY1277
Causeway, Harare
Zimbabwe
Tel: (263) (4) 701 152/4 Fax: (263)(4) 702 248
Toronto, Ontario, M5J 2Y1
Tel:+1 416 263 9483
 
 
CAPITALIZATION at Nov 10, 2015
Authorised: Unlimited
Shares, Warrants and Options Issued:
BANKERS
Canadian Imperial Bank of Commerce
6266 Dixie Road
 
Mississauga, Ontario L5T 1A7 Canada
Common Shares:
52,078,908
 
Warrants:          
Nil
 
Options:                       
2,150,920 (Oct 30, 2015)
 
 
SHARES LISTED
Toronto Stock Exchange Symbol "CAL"
NASDAQ OTCQX Symbol "CALVF"
London "AIM" Market Symbol "CMCL"
NOMAD AND BROKER (AIM)
WH Ireland Limited
11 St James's square
Manchester
 
M2 6WH
 
Tel: +44 161 832 2174

 
18