0000766011 Caledonia Mining Corp Plc false --12-31 FY 2021 3 3 6 6 1,023 736 3 1 3 634 3 8.90 0 60 28.00 7,840 4,147 4 1.6 0 0 2 On November 26, 2020 the Zimbabwean Government announced in the 2021 National Budget Statement that the income tax rate will be reduced from 25.75% to 24.72% and will take effect in the 2021 fiscal tax year. This resulted in a change in the estimated deferred tax liability. Included in the reallocation between asset classes is an amount of $18,509 for the Central Shaft. Caledonia has completed sufficient work to establish that the potential orebody at the Glen Hume property will not meet Caledonia’s requirements in terms of size, grade and width. Accordingly, Caledonia will not exercise the option to acquire this property. The Group voluntarily changed its disclosure policy for exploration and evaluation assets to be disclosed separately as Exploration and evaluation assets rather than as part of Property, plant and equipment (refer to note 4(h)). During the period from January 2021 to March 2021 it was unclear in what currency the monthly payments to the Zimbabwe Electricity Supply Authority (“ZESA”) had to be made. In April 2021 Blanket was advised that the payments had to be paid on a 60/40 basis USD/RTGS$. Interest was charged on the outstanding amounts to ZESA during the period January 2021 to March 2021 when payments were withheld. The effective tax rate of 39.10% (2020: 37.52%) exceeds the statutory tax rates of subsidiaries of the Company, as certain expenditures are incurred by the Company that is not tax-deductible against taxable income in Zimbabwe and South Africa, where the enacted tax rates are 24.72% (2020: 25.75%) and 28.00% respectively. Further, Zimbabwean legislation requires the Blanket income taxation calculation to be performed in RTGS$ whereas the functional currency in which the profit before tax is calculated in these consolidated financial statements is in US Dollar; the requirement is further described in point 3 below. Management determined the fair value of Eagle Vulture, Mascot and Penzance as the future sale price as agreed by independent parties in the sale contract that amounted to $500. The carrying amount of Eagle Vulture, Mascot and Penzance before the impairment was $3,430 and the write down resulted in an impairment expense of $2,930. The $500 carrying value was reallocated to Assets held for sale in December, 2020. The sale was completed on July 27, 2021. In 2019 ZIMRA issued PN26 that was affected retrospectively from February 22, 2019. The public notice provided clarity on Section 4 (a) of the Finance Act [Chapter 23.04] of Zimbabwe, which requires a company earning taxable income to pay tax in the same or other specified currency in which taxable income and revenue is earned. PN 26 clarifies that the calculation of taxable income be performed in RTGS$ and that the payment of the tax be in the ratio of the currency that the taxable income and revenue is earned. The reconciling item reconciles the profit before tax calculated using US Dollars as the functional currency of the Zimbabwean entities to taxable income calculated in RTGS$. Included in additions is an amount of $19,413 (2020: $6,476) relating to capital work in progress (“CWIP”) and contains $17 ( December 31, 2020: $53) of borrowing costs capitalised from the term loan. As at year end $42,145 of CWIP was included in the cost closing balance (2020: $85,479). Refer to Note 6, for the effective shareholding. NCI has a 13.2% (2019: 16.2%, 2018: 16.2%) interest in cash flows of Blanket only. On August 1, 2019 the Zimbabwean Government announced in the mid-term budget speech that mining royalties will be deductible for income tax purposes. The change came into effect on January 1, 2020. Accounted for under IAS19 Employee Benefits. Included in impairments are Gensets at a cost of $1,001 and Guide ropes at a total cost of $310. These assets were impaired as they are no longer in a working conditions as intended for the use in production or day to day operations. The Company raised equity for the construction of the solar plant by way of an At The Market (“ATM”) equity offer on the NYSE American. Gross proceeds of $13,000 were raised pursuant to the ATM sales agreement with Cantor Fitzgerald & Co. at a transaction cost of $462. Amount inclusive of $295 (2019: $107, 2018: $43) classified as production costs. The shares held by BETS are effectively treated as treasury shares (see above). Capitalised from July 6, 2020, refer to note 18. The net deferred tax liability consists of a deferred tax asset of $194 (2020: $87, January 1, 2020: $63) from the South African operation and a net deferred tax liability of $8,034 (2020: $4,234, January 1, 2020: $3,129) due to the Zimbabwean operation. The amounts are in different tax jurisdictions and cannot be offset. The amounts are presented as part of Non-current assets and Non-current liabilities in the Statements of financial position. The deferred tax asset recognised is supported by evidence of probable future taxable income. Facilitation loans are accounted for as equity instruments and are accordingly not recognised as loans receivable. Gross proceeds of $7,834 with a transaction cost of $28 were raised by issuing depository receipts on the VFEX in December 2021. The tax rate in Jersey, Channel Islands is 0% (2020: 0%, 2019: 0%). BETS and the Community Trust are consolidated as structured entities. On July 6, 2020 the Board appointed Voltalia as the contractor for the engineering, procuring and constructing of a solar plant to be owned by a subsidiary of the Company and supply Blanket Mine with power. All solar costs that were incurred before July 6, 2020 were accounted for as other expenses and accounted through profit or loss. Solar costs incurred after approval by the Board are accounted for as Property, plant and equipment as it became clear and probable that future economic benefits will flow to the project. The 40-hectare site for the project has been cleared and fenced and is ready for civil work to commence. Construction of the 12MWac solar plant is expected to be completed in the second quarter of 2022. Included in Prepayments is an advance payment to Voltalia to the amount of $1,821 in terms of the EPC agreement and $704 for equipment. These items were delivered at the date of approval of these consolidated financial statements. Also included in Prepayments is an amount of $426 to entities in Zimbabwe for civil and construction work related to the solar plant. 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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
| OR
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| For the fiscal year ended December 31, 2021
| OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| OR
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 193
| Date of event requiring this shell company report ……………………………………………
| For the transition period from ……………………………… to ………………………………

Commission file number 001-38164

Caledonia Mining Corporation Plc

(Exact name of Registrant as specified in its charter)

Jersey, Channel Islands

(Jurisdiction of incorporation or organization)

Caledonia Mining Corporation Plc

B006 Millais House, Castle Quay, St Helier, Jersey, JE2 3EF

(Address of principal executive offices)

Mark Learmonth, +44 1534 679 800, mlearmonth@caledoniamining.com, B006 Millais House, Castle Quay, St Helier, Jersey Channel Islands, JE2 3EF.

(Name, telephone, email and/or facsimile number and address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Class | Trading Symbol(s) | Name of Each Exchange on Which Registered
Common Shares, no par value | CMCL | NYSE American LLC

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

1

Indicate the number of outstanding shares of each of the issuer’s classes of capital or stock as of the closing of the period covered by the annual report:

12,756,606 (“Common shares” or “shares”)

Indicate by check mark if the registration is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐ Yes ☒ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

☐ Yes ☒ No

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, and/or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐ | Accelerated filer ☒ | Non-accelerated filer ☐
|  | Emerging growth company ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

2

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP | ☐
International Financial Reporting Standards as issued by the International Accounting Standards | ☒
Other | ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

3

TABLE OF CONTENTS

PART I | 9
ITEM 1 - IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS | 9
ITEM 2 - OFFER STATISTICS AND EXPECTED TIMETABLE | 9
ITEM 3 - KEY INFORMATION | 9
A. | [Reserved] | 9
B. | Capitalization and Indebtedness | 9
C. | Reasons for the Offer and Use of Proceeds | 9
D. | Risk Factors | 9
ITEM 4 - INFORMATION ON THE COMPANY | 24
A. | History and Development of the Company | 24
B. | Business Overview | 27
C. | Organizational Structure | 31
D. | Property, Plant and Equipment and Exploration and evaluation assets | 32
ITEM 4A - UNRESOLVED STAFF COMMENTS | 53
ITEM 5 - OPERATING AND FINANCIAL REVIEW AND PROSPECTS | 53
A. | Operating Results | 53
B. | Liquidity and Capital Resources | 61
C. | Research and development, patents and licenses, etc. | 62
D. | Trend Information | 62
E. | Critical Accounting Estimates | 62
ITEM 6 - DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES | 62
A. | Directors and Senior Management | 62
B. | Compensation | 67
C. | Board Practices | 68
D. | Employees | 69
E. | Share Ownership | 70
ITEM 7 - MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS | 70
A. | Major Shareholders | 70
B. | Related Party Transactions | 71
C. | Interests of Experts and Counsel | 71
ITEM 8 - FINANCIAL INFORMATION | 71
A. | Consolidated Statements and Other Financial Information | 71
B. | Significant Changes | 72
ITEM 9 - THE OFFERING AND LISTING | 72
A. | Offering and Listing Details | 72
B. | Plan of Distribution | 72
C. | Markets | 72
D. | Selling Shareholders | 72
E. | Dilution | 72
F. | Expenses of the Issue | 72
ITEM 10 - ADDITIONAL INFORMATION | 73
A. | Share Capital | 73
B. | Memorandum and Articles of Association | 73
C. | Material Contracts | 80
D. | Exchange Controls | 80
E. | Taxation | 81
F. | Dividends and Paying Agents | 84
G. | Statement by Experts | 84
H. | Documents on Display | 85
I. | Subsidiary Information | 85

4

ITEM 11 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 85
A. | Currency Risk | 85
B. | Sensitivity Analysis | 85
C. | Interest Rate Risk | 86
D. | Concentration of Credit Risk | 87
E. | Liquidity Risk | 87
F. | Market Risk – Gold Price | 87
ITEM 12 - DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES | 88
PART II | 89
ITEM 13 - DEFAULTS, DIVIDEND ARREARS AND DELINQUENCIES | 89
ITEM 14 - MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 89
A. to D. | 89
E. | Use of Proceeds | 89
ITEM 15 - CONTROLS AND PROCEDURES | 89
A. | Disclosure Controls and Procedures | 89
B. | Management’s annual report on internal control over financial reporting | 89
C. | Attestation report of registered public accounting firm | 89
D. | Changes in internal controls over financial reporting | 90
ITEM 16 - [RESERVED] | 90
ITEM 16A - AUDIT COMMITTEE FINANCIAL EXPERT | 90
ITEM 16B - CODE OF ETHICS | 90
ITEM 16C - PRINCIPAL ACCOUNTANT FEES AND SERVICES | 90
ITEM 16D - EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES | 91
ITEM 16E - PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS | 91
ITEM 16F - CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT | 91
ITEM 16G - CORPORATE GOVERNANCE | 91
ITEM 16H - MINE SAFETY DISCLOSURE | 92
ITEM 16I - DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS | 92
PART III | 93
ITEM 17 - FINANCIAL STATEMENTS | 93
ITEM 18 - FINANCIAL STATEMENTS | 93
ITEM 19 - EXHIBITS | 93

5

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 20-F ("Annual Report") and the exhibits attached hereto contain "forward-looking information" and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation that involve risks and uncertainties relating, but not limited to, the Company’s current expectations, intentions, plans, and beliefs. Forward-looking information can often be identified by forward-looking words such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “target”, “intend”, “estimate”, “could”, “should”, “may” and “will” or the negative of these terms or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Examples of forward-looking information in this Annual Report include: our reserve calculations with underlying assumptions, production guidance, estimates of future/targeted production rates, planned mill capacity increases, estimates of future metallurgical recovery rates and the ability to maintain high metallurgical recovery rates, Caledonia Mining Corporation Plc and subsidiaries (“Caledonia” or “Company” or “Group”) plans and timing regarding further exploration, drilling and development, the prospective nature of exploration and development targets, the ability to upgrade and convert mineral reserves, capital costs, our intentions with respect to financial position and third party financing and future dividend payments. This forward-looking information is based, in part, on assumptions and factors that may change or prove to be incorrect, thus causing actual results, performance or achievements to be materially different from those expressed or implied by forward-looking information. Such factors and assumptions include, but are not limited to: failure to establish estimated reserves, the grade and recovery of ore which is mined varying from estimates, success of future exploration and drilling programs, reliability of drilling, sampling and assay data, assumptions regarding the representativeness of mineralization being inaccurate, success of planned metallurgical test-work, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, changes in government regulations, legislation and rates of taxation, inflation, changes in exchange rates and the availability of foreign exchange, fluctuations in commodity prices, delays in the development of projects and other factors.

Shareholders, potential shareholders and other prospective investors should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. Such factors include, but are not limited to: risks relating to estimates of mineral reserves proving to be inaccurate, fluctuations in gold price, risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected geological or structural formations, pressures, power outages, explosions, landslides, cave-ins and flooding), risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom the Company does business; inadequate insurance, or inability to obtain insurance, to cover these risks and hazards, employee relations; relationships with and claims by local communities and indigenous populations; political risk; risks related to natural disasters, terrorism, civil unrest, public health concerns (including health epidemics or outbreaks of communicable diseases such as the coronavirus); availability and increasing costs associated with mining inputs and labor; the speculative nature of mineral exploration and development, including the risks of obtaining or maintaining necessary licenses and permits, diminishing quantities or grades of mineral reserves as mining occurs; global financial condition, the actual results of current exploration activities, changes to conclusions of economic evaluations, and changes in project parameters to deal with un-anticipated economic or other factors, risks of increased capital and operating costs, environmental, safety or regulatory risks, expropriation, the Company’s title to properties including ownership thereof, increased competition in the mining industry for properties, equipment, qualified personnel and their costs, risks relating to the uncertainty of timing of events including targeted production rate increase and currency fluctuations. Shareholders, potential shareholders and other prospective investors are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Caledonia reviews forward-looking information for the purposes of preparing each annual report, however Caledonia undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

6

STATUS AS AN EMERGING GROWTH COMPANY

We are an “emerging growth company” as defined in Section 3(a) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”) by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. We will continue to qualify as an "emerging growth company" until the earliest to occur of: (a) the last day of the fiscal year during which we had total annual gross revenues of US$1,070,000,000 (as such amount is indexed for inflation every 5 years by the United States Securities and Exchange Commission (“SEC”)) or more; (b) the last day of our fiscal year following the fifth anniversary of the date of the first sale of equity securities pursuant to an effective registration statement under the United States Securities Act of 1933, as amended (the “Securities Act”); (c) the date on which we have, during the previous 3-year period, issued more than US$1,000,000,000 in non-convertible debt; or (d) the date on which we are deemed to be a "large accelerated filer", as defined in Exchange Act Rule 12b-2. We expect to continue to be an emerging growth company for the immediate future. During 2020 Caledonia completed the first sale of equity securities under the Securities Act and may no longer qualify as an emerging growth company in 2026. Refer to note 25 in the Consolidated Financial Statements for detail on the sale of this equity and subsequent sales of equity securities.

Generally, a registrant that registers any class of its securities under Section 12 of the Exchange Act is required to include in the second and all subsequent annual reports filed by it under the Exchange Act a management report on internal control over financial reporting and, subject to an exemption available to registrants that are neither an "accelerated filer" or a "larger accelerated filer" (as those terms are defined in Exchange Act Rule 12b-2), an auditor attestation report on management's assessment of internal control over financial reporting. However, for so long as we continue to qualify as an emerging growth company, we will be exempt from the requirement to include an auditor attestation report on management’s assessment of internal controls over financial reporting in its annual reports filed under the Exchange Act, even if we were to qualify as an "accelerated filer" or a "larger accelerated filer". In addition, Section 103(a)(3) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) has been amended by the JOBS Act to provide that, among other things, auditors of an emerging growth company are exempt from any rules of the Public Company Accounting Oversight Board requiring a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the company.

SPECIAL NOTE REGARDING LINKS TO EXTERNAL WEBSITES

Links to external, or third-party websites, are provided solely for convenience. We take no responsibility whatsoever for any third-party information contained in such third-party websites, and we specifically disclaim adoption or incorporation by reference of such information into this report.

NON-IFRS FINANCIAL INFORMATION

This Annual Report contains financial statements of the Company prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). In addition, this Annual Report also contains non-IFRS financial measures (“Non-IFRS Measures”) including “on-mine cost per ounce”, “all-in sustaining cost per ounce”, “all-in cost per ounce”, “average realized gold price” and “adjusted earnings per share” as we believe these are useful metrics for measuring our performance. However, these Non-IFRS Measures do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other publicly traded entities. These measures should be considered as supplemental in nature and not as a substitute for related financial information prepared in accordance with IFRS.

CURRENCY

Unless otherwise indicated, all references to “$”, “US dollars”. “USD”, or "US$" are to United States of America dollars.

FOREIGN PRIVATE ISSUER FILINGS

We are considered a “foreign private issuer” pursuant to Rule 405 promulgated under the Securities Act. In our capacity as a foreign private issuer, we are exempt from certain rules under the Exchange Act that impose certain disclosure obligations and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of our shares. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as United States companies whose securities are registered under the Exchange Act. In addition, we are not required to comply with Regulation FD, which restricts the selective disclosure of material information.

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For as long as we are a “foreign private issuer” we intend to file our annual financial statements on Form 20-F and furnish our quarterly financial statements on Form 6-K to the SEC for so long as we are subject to the reporting requirements of Section 13(g) or 15(d) of the Exchange Act. However, the information we file or furnish may not be the same as the information that is required in annual and quarterly reports on Form 10-K or Form 10-Q for U.S. domestic issuers. Accordingly, there may be less information publicly available concerning us than there is for a company that files as a domestic issuer.

We may take advantage of these exemptions until such time as we are no longer a foreign private issuer. We are required to determine our status as a foreign private issuer on an annual basis at the end of our second fiscal quarter. We would cease to be a foreign private issuer at such time as more than 50% of our outstanding voting securities are held by United States residents and any of the following three circumstances applies: (1) the majority of our executive officers or directors are United States citizens or residents; (2) more than 50% of our assets are located in the United States; or (3) our business is administered principally in the United States. If we lose our “foreign private issuer status” we would be required to comply with Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirement for “foreign private issuers”.

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PART I

ITEM 1 - IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2 - OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3 - KEY INFORMATION
A. [Reserved]
B. Capitalization and Indebtedness
Not applicable.
C. Reasons for the Offer and Use of Proceeds
D. Risk Factors

An investment in our shares involves a high degree of risk and should be considered speculative. You should carefully consider the following risks set out below and other information before investing in our shares. If any event arising from these risks occurs, our business, prospects, financial condition, results of operations or cash flows could be adversely affected, the trading price of our shares could decline and all or part of any investment may be lost.

Our operations are highly speculative due to the high-risk nature of our business, which include the acquisition, financing, exploration, development of mineral infrastructure and operation of mines. The risks and uncertainties set out below are not the only ones we face. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also impair our operations. If any of the risks actually occur, our business, financial condition and operating results could be adversely affected. As a result, the trading price of our shares could decline and investors could lose part or all of their investment. Our business is subject to significant risks and past performance is no guarantee of future performance.

Our shares may not continue to be listed on the NYSE American LLC (“NYSE American”)

Failure to meet the applicable maintenance requirements of the NYSE American could result in our shares being delisted from the NYSE American. If we are delisted from the NYSE American, our shares may be eligible for trading on an over-the-counter market in the United States. In the event that we are not able to obtain a listing on another U.S. stock exchange or quotation service for our shares, it may be extremely difficult or impossible for shareholders to sell their shares in the United States. Moreover, if we are delisted from the NYSE American, but obtain a substitute listing for our shares in the United States, it may be on a market with less liquidity, and therefore potentially more price volatility, than the NYSE American. Shareholders may not be able to sell their shares on any such substitute U.S. market in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market. As a result of these factors, if our shares are delisted from the NYSE American, the price of our shares is likely to decline. In addition, a decline in the price of our shares will impair our ability to obtain financing in the future.

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Future sales of our shares into the public market by holders of our options may lower the market price, which may result in losses to our shareholders.

As of May 17, 2022, we had 12,833,126 shares issued and outstanding. In addition, as of May 17, 2022, 10,000 shares were issuable upon exercise of outstanding stock options, all of which may be exercised in the future resulting in dilution to our shareholders. Awards under the incentive plan made to executives and certain other senior members of management on January 24, 2022, consisting of a target of 130,380 performance units (“PUs”), are only to be settled in shares. The PUs that vest will be subject to a performance multiplier and a maximum amount of 150% of target PUs could vest. Accordingly, providing for such a maximum amount, Caledonia could grant options on a further 1,077,742 shares as at the date of this annual report on the assumption that all other outstanding awards (other than the options mentioned above) are settled in cash at the request of the holders. As of May 17, 2022, our senior officers and directors beneficially owned, as a group, 543,420 shares (4.2% of our issued share capital). Sales of substantial amounts of our shares into the public market, by our officers or directors or pursuant to the exercise of options, or even the perception by the market that such sales may occur, may lower the market price of our shares.

The price of gold is subject to volatility and may have a significant effect on our future activities and profitability.

The economic viability of our revenues, operations and exploration and development projects is, and is expected to be, heavily dependent on the price of gold, which is particularly subject to fluctuation and has fluctuated significantly in recent years. The price of gold is affected by numerous factors beyond our control including, but not limited to: international economic and political conditions; expectations of inflation; international currency exchange rates; interest rates; global or regional consumption patterns; speculative activities; levels of supply and demand; increased production due to new mine developments and improved mining and production methods; availability and costs of metal substitutes; and inventory carrying costs. The effect of these factors on the price of gold, and therefore the economic viability of our operations, cannot be accurately predicted. Blanket Mine (1983) (Private) Limited ( “Blanket”), the company which owns the Blanket mine (“Blanket Mine”), continues to sell all of its gold production from the Blanket Mine to Fidelity Printers and Refiners Limited (“Fidelity”), as required by Zimbabwean legislation, and received the spot price of gold less an early settlement discount of 1.25% (2.5% from October 1, 2018 to January 11, 2019).

On February 17, 2022, the Company entered into a zero cost contract by way of call options to hedge approximately 25% of 2022 target gold production at Blanket through a cap and collar hedge for 20,000 ounces of gold over a period of 5 months from March 2022 to July 2022. The hedging contract has a cap of $1,940 and a collar of $1,825 over 4,000 ounces of gold per month, expiring at the end of each month over the 5-month period.

On March 9, 2022, in response to a very volatile gold price the Company purchased a matching quantity of call options at: a strike price above the cap at a total cost of $796,000 over 4,000 ounces of gold per month at strike prices of $2,100 per ounce from March 2022 to May 2022 and $2,200 per ounce from June 2022 to July 2022 in order to limit margin exposure and reinstate gold price upside above the strike price. The future impact of the hedges are undeterminable at the date of issue of this report and will be quantified in the Condensed Consolidated Interim Financial Statements as at March 31, 2022. Refer to note 14 and 41.1 of the Consolidated Financial Statements for more detail on the hedging agreements.

Our Business Operations and/or Activities could be impacted by the spread of contagious diseases, such as the Coronavirus.

Our business could be significantly adversely affected by the effects of a widespread global outbreak of contagious diseases, including the recent outbreak of respiratory illness caused by a novel coronavirus (“COVID-19”). We cannot accurately predict the impact that contagious diseases, such as COVID-19, will have on third parties’, including our employees’ ability to fulfil their obligations to the Company, including due to uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, and the length of travel and quarantine restrictions imposed by governments of affected countries. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries (including those countries we rely on to conduct our business operations), resulting in an economic downturn that could negatively impact our operating results.

Our supply chain has continued to function at a level that is adequate to augment our inventories, sufficient to maintain normal production without interruption during times when regular lockdowns were implemented by the Government of Zimbabwe and the Government of South Africa in 2020 and 2021. The supply chain situation bears no impact on management’s going concern assumption.

Further, management had to incur additional costs to ensure the wellbeing of its employees and made donations to stakeholders in Zimbabwe to assist in curbing the effects of COVID-19. Refer to notes 8 and 10 of the Consolidated Financial Statements for the cost related to these expenditures.

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In response to these COVID-19 risks, management has maximised the inventory of consumable stock; engaged closely with its customer, Fidelity, regarding access to refiners and the eventual route to market for Blanket’s production; and management regularly reviews its financial status and projections.

Work on the Central Shaft project from April 2020 was delayed by restrictions on the movement of specialised personnel and the transport of equipment due to the COVID-19 pandemic. The Central Shaft was commissioned in the first quarter of 2021 instead of the fourth quarter of 2020. The delay in commissioning reduced targeted production for 2021 from 75,000 ounces to between 65,000 to 67,000. The target production for 2022 is between 73,000 to 80,000 ounces, and 80,000 ounces from 2023 onwards.

Currently there are no concerns over the valuation of our assets as disclosed in the Consolidated Financial Statements and the Company does not foresee any changes in the cost of capital, cash requirements or any covenant defaults in our credit agreements. At the date of the authorisation of this document management is of the opinion that the effects of COVID-19 have been considered in making significant judgements and estimates, valuations and evaluating our going concern principle. However, it must be recognised that the duration and effects of the COVID-19 pandemic are uncertain and can affect our forecasting accuracy. As of the date of this Annual Report, the severity of the effects of COVID-19 appear to be diminishing in the jurisdictions where the Company operates.

We cannot guarantee that there will not be an increase in input costs affecting our results of operations and financial performance.

Mining companies could experience higher costs of steel, reagents, labor, electricity, government levies, fees, royalties and other direct and indirect taxes. Our planned growth at Blanket Mine should allow the fixed cost component to be absorbed over increased production, thereby helping to alleviate to some extent the net cash effect of any further cost increases and increase revenue cash flows. However, there can be no assurance that we will be able to control such input costs and any increase in input costs above our expectations may have a negative result on our results of operations and financial performance.

Our operations may be subject to increased costs or even suspended or terminated as a result of any loss of required infrastructure in our operations.

Infrastructure, including water and electricity supplies, that is currently available and used by us may, as a result of adverse climatic conditions, natural disaster, incorrect or inadequate maintenance, sabotage or for other reasons, be destroyed or made unavailable or available in a reduced capacity. Were this to occur, operations at our properties may become more costly or have to be curtailed or even terminated, potentially having serious adverse consequences to our financial condition and viability that could, in turn, have a material adverse effect on our business, results of operations or financial performance.

Our operations may be subject to inadequate water supply.

Blanket uses water in the metallurgical process, some of which is pumped from the deeper levels of the mine but most of which is obtained from the “Blanket dam” (which, despite its name, is neither owned nor managed by Blanket Mine) which also supplies water to the nearby town of Gwanda. Blanket is situated in a semi-arid region and rainfall typically only occurs in the period November to February. Management believes that there is enough water in the Blanket dam to maintain normal operations until the next rainy season. During dry periods as a precautionary measure, Blanket intends to resuscitate existing boreholes and determine their yield; conduct hydrological surveys to identify potential new boreholes; recycle water from the lower levels of unused workings and construct a pond to store water that is pumped from current workings. If, however, there is inadequate water supply, operations at Blanket Mine may become more costly or have to be curtailed, suspended or even terminated which may have serious adverse consequences to the viability of gold production from Blanket Mine that could, in turn, have a material adverse effect on our business, results of operations or financial performance.

Our operations may be subject to inadequate electricity supply.

Zimbabwe’s electricity generation is mainly from the Kariba hydro station on the Zambezi river, the Hwange coal-fired station and several other much smaller coal-fired power stations. Even if Zimbabwe’s installed generating capacity is fully operational, it cannot generate enough electricity to meet its requirements and therefore Zimbabwe imports electricity from Mozambique and South Africa. Blanket Mine has a supply agreement with the Zimbabwe Electricity Supply Authority (“ZESA”) in terms of which it pays a premium rate in return for uninterrupted power.

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The generating capacity at the Kariba hydro generating station fluctuates at times when the water levels are low. In addition, the export of electricity from South Africa to Zimbabwe is also interrupted due to a lack of generating capacity in South Africa and therefore interruptions to the Blanket supply do occur. The combined effect of these are severe electricity shortages that lead to “load-shedding” or low voltage occurrences. As a result of load-shedding and low voltage occurrences, Blanket’s use of diesel for generating electricity increased from approximately 1,903,000 liters for the year in 2020 to 3,311,000 liters in 2021.

Power surges as experienced at Blanket, if not controlled, can cause severe damage to Blanket’s electrical equipment. Blanket has installed its own equipment to regulate the incoming power; however, this equipment was itself damaged by the incoming supply. Power surges are regulated by Autotap transformers that are installed to normalise fluctuations up to 10MVA; current fluctuations vary to 12MVA. In December 2021 Blanket finalised the commissioning of an additional 10 MVA Autotap transformed to the existing 10 MVA Autotap transformer at Shaft No. 4. Blanket suffered failure of two generators during the fourth quarter of 2021. New replacement generators were commissioned during the first quarter of 2022.

Blanket has addressed the issue of interrupted power supply by installing stand-by generators. These generators can supply the whole mine with electricity but is a costly and environmentally unfriendly electricity source that is reliant on fuel imports that may from time to time be in shortage in Zimbabwe.

To mitigate against the current electricity situation, Caledonia has entered into a contract for the construction of a 12MWac solar plant at a cost of approximately $12 million. Total costs to design, construct, evaluate, licence and structure the project are expected to be approximately $14.1 million. Refer to Item 4.B – “Business Overview”, for more detail regarding the proposed solar plant and its financing.

If an electricity shortage or outage persists, operations at Blanket Mine may become more costly or have to be curtailed, suspended or even terminated which may have serious adverse consequences to the viability of production from Blanket Mine that could, in turn, have a material adverse effect on our business, results of operations or financial performance.

We do business in countries and jurisdictions outside of the United States where different economic, cultural, regulatory, monetary and political environments could adversely impact our business, results of operations and financial condition.

The jurisdictions in which we operate are unpredictable. Assets and investments in these foreign jurisdictions are subject to risks that are usually associated with operating in a foreign country and any of these could result in a material adverse effect on our business, results of operations or financial performance. These risks include, but are not limited to, access to assets, labor disputes and unrest; arbitrary revocation of government orders, approvals, licenses and permits; corruption; uncertain political and economic environments; bribery; war; civil disturbances and terrorist actions; sudden and arbitrary changes to laws and regulations; delays in obtaining government permits; limitations on foreign ownership; more onerous foreign exchange controls; currency devaluations; import and export regulations; inadequate, damaged or poorly maintained infrastructure; and endemic illnesses. There can be no guarantee that governments in these jurisdictions will not unilaterally expropriate the property of companies that are involved in mining.

Caledonia’s mining operations are conducted in Zimbabwe and, as such, these operations are exposed to various levels of political, economic and other risks and uncertainties in addition to those set out above. These risks and uncertainties include, but are not limited to, expropriation and nationalization, or mandatory levels of Zimbabwean ownership beyond currently mandated levels; renegotiation, nullification or partisan terms of existing concessions, licenses, permits and contracts; illegal mining; changes in monetary and taxation policies; restrictions on foreign exchange and repatriation; and changing political conditions, currency controls and governmental regulations that favor or require the awarding of contracts to local contractors or require foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction.

The current monetary situation in Zimbabwe can be summarized as follows:

● | There was a shortage of foreign currency in Zimbabwe in 2021 and as of the date of this Annual Report, although Blanket has had satisfactory access to foreign exchange.
● | The local currency (known as “RTGS” or “RTGS$”) rate of annual inflation increased from 5% in September 2018 to approximately 500% by December 2019. The rate of inflation appears to have moderated to an annual rate of 52% for the twelve months ending December 2021. A high rate of RTGS inflation has little effect on Blanket’s operations as employee remuneration is now in US Dollars.
● | Since October 2018, bank accounts in Zimbabwe have been bifurcated between Foreign Currency Accounts (“FCA”), which can be used to make international payments, and RTGS accounts which can only be used for domestic transactions.
● | On February 20, 2019 the Reserve Bank of Zimbabwe (“RBZ”) allowed inter-bank trading between currency held in the RTGS$ system and the FCA system. Prior to this, the RBZ had stipulated that a Dollar in the RTGS system was worth 1 US Dollar in the FCA system. The interbank exchange rate at each quarter-end since the introduction of the interbank rate in February 2019 is set out below.

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Interbank Exchange Rates

(RTGS$: US$1) |
February 20, 2019 | 2.500 |
March 31, 2019 | 3.003 |
June 30, 2019 | 6.543 |
September 30, 2019 | 15.090 |
December 31, 2019 | 16.773 |
March 31, 2020 | 25.000 |
June 30, 2020 | 57.358 |
September 30, 2020 | 81.444 |
December 31, 2020 | 81.787 |
March 31, 2021 | 84.400 |
June 30, 2021 | 85.423 |
September 31, 2021 | 87.665 |
December 31, 2021 | 108.666 |
March 31, 2022 | 142.42 |
May 5, 2022 | 165.994 |

● | The interbank trading mechanism addressed the most pressing difficulty that emerged after the October 2018 policy implementation, being the erosion of the purchasing power of Blanket’s employees due to rapidly increasing retail prices, which had an adverse effect on employee morale. Management increased RTGS$-denominated remuneration so that it remained more closely aligned to the US Dollar value using the interbank rate. This alleviated some of the financial distress experienced by Blanket employees. Blanket employees are now paid in US Dollars.
● | In February 2020, the RBZ announced its intention to further liberalise the interbank market with the objective of increasing liquidity and transparency. However, in response to the COVID-19 pandemic, the Minister of Finance reversed this policy and re-established a fixed exchange rate of ZWL$25:US$1 with effect from March 26, 2020. Despite the fixed exchange rate, the local currency continued to devalue on the informal exchange markets. On June 23, 2020, the RBZ introduced an “auction system” whereby, on a weekly basis, buyers and sellers of local currency and foreign exchange submit tenders which the RBZ uses to determine a revised interbank rate.
● | Zimbabwean gold producers, including Blanket, are required to sell their gold to Fidelity. Prior to May 26, 2020, 55% of the sale proceeds were received in FCA and the balance was received in RTGS$. From May 26, 2020 to January 6, 2021 gold producers received 70% of their sale proceeds in FCA and the balance in RTGS$. With effect from January 7, 2021, gold producers receive 60% of their revenues in FCA and the balance in RTGS$. Blanket uses the FCA component to pay for imported goods, services, electricity, dividends and a portion of the wages and salaries at Blanket; the RTGS$ component is used to pay for goods and services procured in Zimbabwe, payroll taxes, and a proportion of Blanket’s income tax. At prevailing gold prices and the current rate of production the 60% FCA allocation is sufficient for Blanket to continue mining operations, to fully implement the investment plan as scheduled and allow Caledonia to remit dividends from Zimbabwe. However, the revised 60% FCA allocation meant that Blanket could potentially build up a balance of RTGS$ for which there would be no commercial use. To avoid this eventuality, Blanket participated in the weekly auction until June 15, 2021 to sell RTGS$ for FCA which provided an adequate mechanism to manage Blanket’s treasury. With effect from April 1, 2021, payments to ZESA are to be made in the ratio of 60% in USD Dollars and 40% in RTGS$. From February 4, 2022 mining royalties are payable in RTGS$ up to a limit of 50% of royalties due.
● | In June 2021 the RBZ announced that companies that are listed on the Victoria Falls Stock Exchange (“VFEX”) will receive 100% of the revenue arising from incremental production in US Dollars. Blanket has subsequently received confirmation that the “baseline” level of production for the purposes of calculating incremental production is 148.38 Kg per month (approximately 57,000 ounces per annum). The payment of the increased US Dollars proceeds for incremental production was applied from July 1, 2021 and Blanket has received all amounts due in terms of this revised policy up to the date of approval of these financial statements. As Blanket intends to increase its production from approximately 58,000 ounces of gold in 2020 to between 73,000 to 80,000 ounces of gold in 2022, and to 80,000 ounces of gold thereafter. The Company’s listing on the VFEX in December 2021 should mean that Blanket will receive approximately 71.5% of its total revenues in US Dollars and the balance in RTGS$.
● | Throughout the above and to the date of the issue of the Consolidated Financial Statements the US Dollar has remained the primary currency in which the Group’s Zimbabwean entities operate and the functional currency of these entities

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Investors should recognize that Blanket’s ability to implement its investment plan and Caledonia’s ability to sustain its operations outside Zimbabwe and pay future dividends depends, inter alia, on the ability to continue to externalize cash from Zimbabwe.

Our operations are subject to various government approvals, permits, licenses and legal regulation for which no assurance can be provided that such approvals, permits or licenses will be obtained or if obtained will not be revoked or suspended.

Government approvals, permits and licenses are required in connection with a number of our activities and additional approvals, permits and licenses may be required in the future. The duration and success of our efforts to obtain approvals, permits and licenses are contingent upon many variables outside of our control. Obtaining governmental approvals, permits and licenses can increase costs and cause delays depending on the nature of the activity and the interpretation of applicable requirements implemented by the relevant authority. While we and our affiliates currently hold the necessary licenses to conduct operations there can be no assurance that all necessary approvals, permits and licenses will be maintained or obtained or that the costs involved will not exceed our estimates or that we will be able to maintain such permits or licenses. To the extent such approvals, permits and licenses are not obtained or maintained, we may be prohibited from proceeding with planned drilling, exploration, development or operation of properties which could have a material adverse effect on our business, results of operations and financial performance.

In addition, failure to comply with applicable laws, regulations and requirements in the countries in which we operate may result in enforcement action, including orders calling for the curtailment or termination of operations on our property, or calling for corrective or remedial measures requiring considerable capital investment. Although we believe that our activities are currently carried out in all material respects in accordance with applicable rules and regulations, no assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner that could limit or curtail production or development of our properties or otherwise have a material adverse effect on our business, results of operations and financial performance.

We face risks related to mining, exploration and mine construction on potential properties.

Our level of profitability, if any, in future years will depend on whether the Blanket Mine produces at forecasted rates and whether any exploration stage properties can be brought into production. The mining, exploration and development of mineral deposits involves significant risks. It is impossible to ensure that any current and future exploration programs will establish reserves. Whether a mineral ore body will be commercially viable depends on several factors, and the exact effect of these factors cannot be accurately predicted. The exploration, development and production activities are subject to political, economic and other risks, including:

- | cancellation or renegotiation of contracts;
- | changes in local and foreign laws and regulations;
- | changes in tax laws;
- | delays or refusal in granting prospecting permissions, mining authorizations and work permits for foreign management staff;
- | environmental controls and permitting;
- | expropriation or nationalization of property or assets;
- | foreign exchange controls and the availability of foreign exchange;
- | government mandated social expenditures;
- | import and export regulation, including restrictions on the sale of production in foreign currencies;
- | industrial relations and the associated stability thereof;
- | inflation of costs that is not compensated for by a currency devaluation;
- | requirement that a foreign subsidiary or operating unit has a domestic joint venture partner, which, possibly, the foreign company must subsidize;
- | restrictions on the ability of local operating companies to hold foreign currencies in offshore and/or local bank accounts;
- | restrictions on the ability of a foreign company to have management control of exploration and/or development and/or mining operations;
- | restrictions on the remittance of dividend and interest payments offshore;
- | retroactive tax or royalty claims;
- | risks of loss due to civil strife, acts of war, guerrilla activities, insurrection and terrorism;
- | royalties and tax increases or claims by governmental entities;
- | unreliable local infrastructure and services such as power, water, communications and transport links;
- | demands or actions by native or indigenous groups;
- | other risks arising out of foreign sovereignty over the areas in which operations are conducted; and
- | lack of investment funding.

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Such risks could potentially arise in any country in which we operate.

As a result of the foregoing, our exploration, development and production activities in Zimbabwe may be substantially affected by factors beyond our control, any of which could materially adversely affect our financial position or results from operations. Furthermore, in the event of a dispute arising from such activities, we may be subject to exclusive jurisdiction of courts outside North America or may not be successful in subjecting persons to the jurisdiction of the courts in North America, which could adversely affect the outcome of a dispute.

We will need to identify new reserves to replace mineral reserves that have been depleted by mining activities and to commence new projects. No assurance can be given that exploration activities by us will be successful in identifying sufficient mineral reserves of an adequate grade and suitable metallurgical characteristics suitable for further development or production.

Blanket Mine is our principal mining asset. In addition, Blanket Mine has title to numerous but smaller satellite properties in the surrounding Gwanda greenstone terrain. These satellite properties are in the exploration stage and are without any known bodies of commercial ore.

On September 23, 2021, Caledonia announced that it had entered into an agreement to purchase the mining claims over the Maligreen project ("Maligreen"), a property situated in the Gweru mining district in the Zimbabwe Midlands, from Pan African Mining (Private) Limited, a privately-owned Zimbabwean company, for a total cash consideration of US$4 million. On November 3, 2021 the transfer of the claims to Caledonia and the payment of the purchase price was completed.

Maligreen is a substantial brownfield exploration opportunity with significant historical exploration and evaluation work having been conducted on the property over the last 30 years including:

● | An estimated 60,000 meters of diamond core and percussion drilling
● | 3.5 tonnes of bulk metallurgical test work
● | Aeromagnetic and ground geophysical surveys

As at August 31, 2021 the property is estimated to contain a NI 43-101 compliant inferred mineral resource of approximately 940,000 ounces of gold in 15.6 million tonnes at a grade of 1.88g/t. Of the inferred mineral resource 76% (approximately 712,000 ounces) is shallower than 220m indicating the potential for an open pit mining operation. The inferred mineral resource has been estimated using a cut-off grade of 0.4g/t for a potential open pit and 1.5g/t for a potential underground mine (further information on the assumptions used is set out in the news release dated September 23, 2021 and in the technical report dated November 5, 2021 filed on SEDAR (www.sedar.com)).

Initial assessments of the inferred mineral resource indicate by grade tonnage curve that by applying a higher cut-off grade of 1.0g/t, the total estimated inferred mineral resource reduces by 12% to approximately 827,000 ounces at a grade of 2.79g/t, a 48% higher grade. These favourable grade-tonnage dynamics offer a high level of flexibility in the evaluation of a future mining operation.

The total land area of Maligreen is approximately 550 hectares comprising two historic open pit mining operations which produced approximately 20,000 oz of gold mined from oxides between 2000 and 2002 after which the operation was closed. Caledonia expects to drill an initial 4,800 meters at an estimated cost of US$1.6 million over a period of 18 to 24 months to improve its understanding of the existing resource and assess the potential for a mining operation. Further exploration opportunities exist within the claims area and a subsequent exploration programme is under consideration to explore for continuations of the existing inferred mineral resource at depth to the north-west and the strike extension in the northern part of the property.

The Eagle Vulture, Mascot and Penzance satellite properties were sold in 2021. During the fourth quarter of 2020 the Company entered into option agreements that gave the Company the exclusive right to explore the Glen Hume and Connemara North properties. On conclusion of the drilling programme it was decided not to exercise the option over the Glen Hume property, resulting in an impairment of $3.8 million. After further evaluations, in March 2022 Caledonia decided that the Connemara North property does not meet the Company’s criteria for further investment and accordingly the option to acquire the mining clams will not be exercised. The accumulated expenditure on the Connemara North property of $163,000 will be impaired in the first quarter of 2022.

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Refer to notes 19 and 23 of the Consolidated Financial Statements and Item 4.A – “History and Development of the Company” for more detail on the sale of the satellite properties and the newly acquired options and mining claims over exploration properties. There is no assurance that our mineral exploration activities will result in any discoveries of commercial bodies of mineral reserves. The long-term profitability of our operations will, in part, be directly related to the costs and success of our exploration programs, which may be affected by several factors.

There can be no assurance, even when an economic deposit of minerals is located, that any of our property interests can be commercially mined. The exploration and development of mineral deposits involve a high degree of financial risk over a significant period which a combination of careful evaluation, experience and knowledge of management may not eliminate. While the discovery of additional ore-bearing structures may result in substantial rewards, few properties which are explored are ultimately developed into producing mines. Major expenses may be required to establish reserves by drilling and to construct mining and processing facilities at a particular site. It is impossible to ensure that our current exploration programs will result in profitable commercial mining operations. The profitability of our operations will be, in part, directly related to the cost and success of its exploration and development programs which may be affected by several factors. Additional expenditures are required to establish reserves that are sufficient to commercially mine and to construct, complete and install mining and processing facilities in those properties that are actually mined and developed.

Further development and commercial production at Blanket Mine, satellite properties and newly acquired explorations options cannot be assured.

We are engaged in further development activities at Blanket Mine and its satellite properties and have started our exploration program at Maligreen during November 2021. Estimates for future production, at Blanket Mine, are based on mining plans and are subject to change. Production estimates are subject to risk and no assurance can be given that future production estimates will be achieved. Actual production may vary from estimated production for a variety of reasons including un-anticipated variations in grades, mined tonnages and geological conditions, accident and equipment breakdown, changes in metal prices and the cost and supply of inputs and changes to government regulations. Construction and development of projects are subject to numerous risks including, but not limited to: obtaining equipment, permits and services; changes in regulations; currency rate changes; labor shortages; fluctuations in metal prices; and the loss of community support.

Substantial expenditures are required to establish reserves through drilling, to develop metallurgical processes to extract gold from ore and to develop the mining, processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be capable of economic extraction by metallurgical process, or discovered in sufficient quantities or grades, or the estimated operating costs of the mining venture are sufficient, to justify development of the deposit, or that the funds required for development can be obtained on a timely and economically acceptable basis.

The marketability of any minerals acquired or discovered may be affected by numerous factors which are beyond our control and which cannot be predicted, such as metal price and market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection. Depending on the price of minerals produced, the Company may determine that it is not commercially feasible to commence or continue commercial production.

Refer to capital investments under Item 4.A – “History and Development of the Company”, for detail on development activities at Blanket and surrounding areas.

We face credit risk exposure from counterparties to certain contractual obligations and there is no assurance that any such counterparty may not default in such obligation causing us to incur a financial loss.

Credit risk is the risk that a party with a contractual obligation with us will default causing a loss. New regulations introduced by the Zimbabwean Ministry of Finance in January 2014 require that all gold produced in Zimbabwe must be sold to Fidelity, a company which is controlled by the Zimbabwean authorities. Accordingly, all of our production from Blanket Mine is sold to Fidelity. At the date of approval of this document, Blanket has received all payments due from Fidelity in full and on time. This arrangement introduces a credit risk, beyond our control, that receivables and contractual performance due from Fidelity will not be paid or performed in a timely manner, or at all. If Fidelity or the Zimbabwean government were unable or unwilling to conduct business with us, or satisfy obligations to us, we could experience a material adverse effect upon our operations and financial performance.

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The mining industry is highly competitive and there is no guarantee we will always be able to compete effectively.

The mining industry is a highly diverse and competitive international business. The selection of geographic areas of interest are only limited by the degree of risk a company is willing to accept by the acquisition of properties in emerging or developed markets and/or prospecting in explored or virgin territory. Mining, by its nature, is a competitive business with the search for fresh ground with good exploration potential and the raising of the requisite capital to move projects forward to production. There is aggressive competition within the mining industry for the discovery and acquisition of properties considered to have commercial potential. We will compete with other interests, many of which have greater financial resources than we will have, for the opportunity to participate in promising projects. Such competition may have better access to potential resources, more developed infrastructure, more available capital, have better access to necessary financing, and more knowledgeable and available employees than us. We may encounter competition in acquiring mineral properties, hiring mining professionals, obtaining mining resources, such as manpower, drill rigs, and other mining equipment. Such competitors could outbid us for potential projects or produce gold at lower costs. Increased competition could also affect our ability to attract necessary capital funding or acquire suitable properties or prospects for gold exploration or production in the future. Significant capital investment is required to achieve commercial production from successful exploration and development efforts. Globally, the mining industry is prone to cyclical variations in the price of the commodities produced by it, as dictated by supply and demand factors, speculative factors and industry-controlled marketing cartels. Nature provides the ultimate uncertainty with geological and occasionally climatic surprises. Commensurate with the acceptance of this risk profile is the potential for high rewards. If we are unable to successfully compete for properties, capital, customers or employees it could have a materially adverse effect on our results of operations.

We were required to facilitate the economic participation of certain indigenous groups in our business and there can be no assurance that such required participation was at fair market value or that the terms of the agreements can be amended.

The government of Zimbabwe introduced legislation in 2012 requiring companies to facilitate participation in their shareholdings and business enterprises by the indigenous population (typically referred to as indigenization). It is not assured that such interests were paid for at full fair value. As reported, Blanket Mine complied with the requirements of the Indigenization and Economic Empowerment Act in Zimbabwe whereby indigenous shareholders legally owned 51% of Blanket Mine since September 2012 (until 2020 – see below).

Pronouncements from the Zimbabwe Government following the appointment of the new President in late 2017 announced a relaxation in the indigenization policy which, amongst other things, included the removal of an indigenization requirement for gold mining companies. These pronouncements were passed into law in March 2018.

On November 6, 2018, the Company announced that it had entered into a sale agreement with Fremiro Investments (Private) Limited (“Fremiro”) to purchase Femiro’s 15% shareholding in Blanket for a gross consideration of $16.7 million to be settled through a combination of the cancellation of the loan between the two entities which stood at $11.5 million as at June 30, 2018 and the issue of 727,266 new shares in Caledonia at an issue price of $7.15 per share. On completion of the transaction on January 20, 2020, Caledonia owned 64% in Blanket and Fremiro held approximately 6.3% of Caledonia’s shares.

We currently do not depend on our ability to successfully access the capital and financial markets. However, should our financial position change any inability to access the capital or financial markets may limit our ability to execute our business plan or pursue investments that we may rely on for future growth.

Depending on our ability to generate income from our operations, we may require further financing for current and future exploration and development. Should our projections for fiscal years 2022 through to 2024 prove incorrect, to finance our working capital needs, we may have to raise funds through the issuance of additional equity or debt securities. Depending on the type and the terms of any financing we pursue, shareholders’ rights and the value of their investment in our shares could be reduced. Any additional equity financing will dilute shareholdings, and new or additional debt financing, if available, may involve restrictions on financing and operating activities. In addition, if we issue secured debt securities, the holders of the debt would have a claim to our assets that would be prior to the rights of shareholders until the debt is paid. Interest on these debt securities would increase costs and negatively impact operating results.

If we are unable to obtain additional financing, as needed, at competitive rates, our ability to implement our business plan and strategy may be affected, and we may be required to reduce the scope of our operations and scale back our exploration and development programs as the case may be. There is, however, no guarantee that we will be able to secure any additional funding or be able to secure funding which will provide us with sufficient funds to meet our objectives, which may adversely affect our business and financial position.

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Our share price has been and is likely to continue to be volatile and an investment in our shares could suffer a decline in value.

Market prices for mining company securities, by their nature, are volatile. Factors, such as rapidly changing commodity prices, political unrest globally and in countries where we operate, speculative interest in mining stocks etc. are but a few factors affecting the volatility of the share price. Our shares are listed in the U.S. on the NYSE American, depositary interests representing our shares are admitted to trading on AIM of the London Stock Exchange (“AIM”), and depositary receipts representing our shares were listed on the VFEX in December 2021 raising gross proceeds of approximately $7.8m (the use of the term “share” in this Annual Report also, where the context requires, extends to a depositary interest or depositary receipt representing a share). The Company voluntarily delisted its shares from the Toronto Stock Exchange (“TSX”) on June 19, 2020. After the delisting the Company remains a Canadian reporting issuer and has to comply with Canadian securities laws unless and until it can demonstrate that less than 2% of its beneficial shareholders are Canadian residents.

The market price of our shares may be highly volatile and subject to wide fluctuations. In addition, the trading volume of our shares may fluctuate and cause significant price variations to occur. If the market price of our shares declines significantly, you may be unable to resell your shares at or above the purchase price, if at all. We cannot assure you that the market price of our shares will not fluctuate or significantly decline in the future. Factors affecting our share price include but are not limited to:

| ● | actual or expected fluctuations in our operating results;
| ● | actual or expected changes in our growth rates or our competitors’ growth rates;
| ● | changes in the market price of gold;
| ● | changes in the demand for gold;
| ● | high extraction costs;
| ● | accidents;
| ● | changes in market valuations of similar companies;
| ● | additions to or departures of our key personnel;
| ● | actual or anticipated fluctuations in our quarterly operating results or those of our competitors;
| ● | publication of research reports by securities analysts about us or our competitors in the industry;
| ● | our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market;
| ● | fluctuations of exchange rates between the USD, GBP, CAD, RTGS$ and ZAR;
| ● | changes or proposed changes in laws and regulations affecting the gold mining industry;
| ● | changes in trading volume of our shares on the NYSE American, AIM or VFEX;
| ● | sales or perceived potential sales of our shares by us, our directors, senior management or our shareholders in the future;
| ● | short selling or other market manipulation activities;
| ● | announcement or expectation of additional financing efforts;
| ● | terrorist acts, acts of war or periods of widespread civil unrest;
| ● | natural disasters and other calamities;
| ● | litigation involving us, including: shareholder litigation, investigations or audits by regulators into our operations; or proceedings initiated by our competitors or clients;
| ● | strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy;
| ● | the passage of legislation or other regulatory developments affecting us or our industry;
| ● | fluctuations in the valuation of companies perceived by investors to be comparable to us; and
| ● | conditions in the U.S., United Kingdom and Zimbabwe financial markets or changes in general economic conditions.

We are dependent on key management employees.

Our success depends (i) on the continued contributions of our directors, executive officers, management and consultants; and (ii) on our ability to attract new personnel whenever we seek to implement our business strategy. The loss of the services of any of these persons could have a materially adverse effect on our business, prospects, results of operations and financial performance. The limited availability of mining and other technical skills and experience in Zimbabwe and the difficulty of attracting appropriately skilled employees to Zimbabwe creates a risk that appropriate skills may not be available if, for whatever reason, the current skills base at the Blanket Mine is depleted. There is no assurance that we will always be able to locate and hire all the personnel that we may require. Where appropriate, we engage with consulting and service companies to undertake some of the work functions.

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Our mineral rights may be subject to defects in title.

We are not currently aware of any significant competing ownership claims or encumbrances respecting title to our properties. However, the ownership and validity or title of unpatented mining claims and concessions are often uncertain and may be contested. We also may not have, or may not be able to obtain, all necessary surface rights to develop a property. Although we have taken reasonable measures to ensure proper title to our properties, there is no guarantee of title to our properties or that competing ownership claims or encumbrances respecting our properties will not be made in the future. Title insurance is generally not available for mineral properties and our ability to ensure that we have obtained secure claims to individual mineral properties or mining concessions may be severely constrained. Our mineral properties may be subject to prior unregistered agreements, transfers or claims, and title may be affected by, among other things, undetected defects. We may incur significant costs related to defending the title to our properties. A successful claim contesting our title to a property may cause us to compensate other persons or perhaps reduce our interest in the affected property or lose our rights to explore and, if warranted, develop that property. This could result in us not being compensated for our prior expenditures relating to the property. Also, in any such case, the investigation and resolution of title issues would divert our management’s time from ongoing exploration and, if warranted, development programs. Any impairment or defect in title could have a negative impact on us.

We are subject to operational hazards and risks that could have a material adverse effect on our business, results of operations and financial performance.

We are subject to risks typical in the mining business. These include, but are not limited to, operational issues such as unexpected geological conditions or earthquakes causing unanticipated increases in the costs of extraction or leading to falls of ground and rock bursts, particularly as mining moves into deeper levels. Major cave-ins, flooding or fires could also occur under extreme conditions. Although equipment is monitored and maintained and all staff receive safety training, accidents caused by equipment failure or human error could occur. Such occurrences could result in damage to, or destruction of, mineral properties or production facilities, personal injury or death, environmental damage, delays in mining, monetary losses and possible legal liability. As a result, we may incur significant liabilities and costs that could have a material adverse effect upon our business, results of operations and financial performance.

Lawsuits may be filed against us and an adverse ruling in any such lawsuit could have a material adverse effect on our business, results of operations and financial performance.

We may become party to legal claims arising in the ordinary course of business. There can be no assurance that unforeseen circumstances resulting in legal claims will not result in significant costs or losses. The outcome of outstanding, pending or future proceedings cannot be predicted with certainty and may be determined adversely to us and as a result, could have a material adverse effect on our assets, liabilities, business, financial condition and results of operations. Even if we prevail in any such legal proceedings, the proceedings could be costly and time-consuming and may divert the attention of management and key personnel from our business operations, which could adversely affect our financial condition. In the event of a dispute arising in respect of our foreign operations, we may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdiction of courts in the United States of America, South Africa, Zimbabwe, Canada, the United Kingdom, Jersey Channel Islands or international arbitration. The legal and political environments in which we operate may make it more likely that laws will not be enforced and that judgments will not be upheld. If we are unsuccessful in enforcing our rights under the agreements to which we are party to or judgments that have been granted, or if laws are not appropriately enforced, it could have a material adverse effect on our business, results of operations and financial performance.

We face risks related to illegal mining at Blanket Mine and no assurance can be provided that such illegal mining will not have an adverse effect on our business, results of operations and financial performance.

Illegal mining activities on properties controlled by Blanket have been identified. This gives rise to increased security costs and an increased risk of theft and damage to equipment. Blanket has received adequate support and assistance from the Zimbabwean police in investigating such cases but there can be no guarantee that the support from the Zimbabwean police will continue and whether their support will stop illegal mining activities.

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Most of our employees are members of the Associated Mine Workers Union of Zimbabwe and any work stoppage or industrial action implemented by the union may affect our business, results of operations and financial performance.

Most of the employees are members of the Associated Mine Workers Union of Zimbabwe. Pay rates for all wage-earning staff are negotiated on a Zimbabwe industry-wide basis between the union and representatives of the mine owners. Any industrial action called by the union may affect our operations even though our operations may not be at the root cause of the action. Strikes, lockouts or other work stoppages could have a material adverse effect on our business, results of operations and financial performance. In addition, any work stoppage or labor disruption at key customers or service providers could impede our ability to supply products, to receive critical equipment and supplies for our operations or to collect payment from customers encountering labor disruptions. Work stoppages or other labor disruptions could increase our costs or impede our ability to operate.

There can be no assurance that changes to any environmental, health and safety laws to which we are currently subject would not adversely affect our exploration and development programs.

Our exploration, development and operations are subject to environment, health and safety (“EH&S”) laws and regulations in the countries in which the relevant activity is being conducted.

In 2018, a training facility (called the Nyanzvi initiative) was established at Blanket using dedicated facilities and specially trained facilitators. The entire Blanket workforce participated in the programme which resulted in the general improvement in safety in the first two quarters of 2020. The Nyanzvi programme was suspended from late March 2020 due to the need to observe social distancing because of COVID-19 which contributed to the increase in reportable events. The Nyanzvi safety training initiative was resumed in the last quarter of 2021 as COVID-19 restrictions were relaxed; management believes this will help to increase general safety awareness.

Safety training is an ongoing exercise and it will remain an area of focus for the Company. There is no assurance, however, that future changes in EH&S, if any, will not adversely affect our exploration and development programs or our operations. There are no assurances that regulatory and environmental approvals required under EH&S will be obtained on a timely basis or if at all. A breach of EH&S may result in the temporary suspension of operations, the imposition of fines, other penalties (including administrative penalties and regulatory prosecution), and government orders, which could potentially have a material adverse effect on operations.

Due to the nature of our business, our operations face extensive EH&S risks.

Gold mining is exposed to numerous risks and events, the occurrence of which may result in the death of, or personal injury, to employees. EH&S legislation applicable to us could suspend part or all of our operations. EH&S incidents could therefore lead to increased unit production costs or lower production which could negatively affect our business, operating and/or financial results.

In response to the COVID-19 pandemic, measures were introduced to safeguard our employees; e.g. protective equipment and guidelines - clothing, sanitizers, stricter safety protocols, etc. One case of COVID-19 was recorded at Blanket during 2020; 232 cases of COVID-19 were detected in 2021 of which there was, regrettably, two deaths of an employee and a dependent. Further cases have been detected at the Company’s offices in Harare, Johannesburg and St Helier. Blanket procured sufficient doses of an approved vaccine for all adult employees and their spouses; as at December 31, 2021, 1,077 of Blanket’s employees and 620 of the Blanket employee dependents living on the Blanket site have been vaccinated on site.

Unfortunately, on February 21, 2022, there was a fatal accident in a development haulage involving a LHD loader. The board of directors of Caledonia (“Board”) and management of Caledonia extended their condolences to the family and colleagues of the deceased.

We may enter into acquisitions or other material transactions at any time.

We continually seek to replace and expand our reserves through the exploration of our existing properties and may expand through acquisitions of interests in new properties or of interests in companies that own such properties. Acquisitions involve a number of risks, including: the possibility that we, as a successor owner, may be legally and financially responsible for liabilities of prior owners; the possibility that we may pay more than the acquired company or assets are worth; the additional expenses associated with completing an acquisition and amortizing any acquired intangible assets; the difficulty of integrating the operations and personnel of an acquired business; the challenge of implementing uniform standards, controls, procedures and policies throughout an acquired business; the inability to integrate, train, retain and motivate key personnel of an acquired business; and the potential disruption of our ongoing business and the distraction of management from its day-to-day operations. These risks and difficulties, if they materialize, could disrupt our ongoing business, distract management, result in the loss of key personnel, increase expenses and may have a material adverse effect on our business, results of operations and financial performance.

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On November 3, 2021 the mining claims over Maligreen were transferred to one of the Company’s Zimbabwe subsidiaries. Refer to note 19 of the Consolidated Financial Statements and Item 4.A - “History and Development of the Company” for more detail on this acquisition.

As a foreign private issuer, we are permitted to file less information with the SEC than a company that is not a foreign private issuer or that files as a domestic issuer.

As a foreign private issuer, we are exempt from certain rules under the Exchange Act that impose disclosure requirements as well as procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as a company that files as a domestic issuer whose securities are registered under the Exchange Act, nor are we generally required to comply with the SEC’s Regulation FD, which restricts the selective disclosure of material non-public information. For as long as we are a “foreign private issuer” we intend to file our annual financial statements on Form 20-F and furnish our quarterly financial statements on Form 6-K to the SEC for so long as we are subject to the reporting requirements of Section 13(g) or 15(d) of the Exchange Act. However, the information we file or furnish is not the same as the information that is required in annual and quarterly reports on Form 10-K or Form 10-Q for U.S. domestic issuers. Accordingly, there may be less information publicly available concerning us than there is for a company that files as a domestic issuer.

We may lose our foreign private issuer status, which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur additional legal, accounting and other expenses.

We are required to determine our status as a foreign private issuer on an annual basis at the end of our second fiscal quarter. In order to maintain our current status as a foreign private issuer, either (1) a majority of our shares must be either directly or indirectly owned of record by non-residents of the United States or (2) (a) a majority of our executive officers or directors must not be U.S. citizens or residents, (b) more than 50 percent of our assets cannot be located in the United States and (c) our business must be administered principally outside the United States. If we lost this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We would also be subject to additional restrictions on offers and sales of securities outside the United States and would have to comply with the generally more restrictive Regulation S requirements under the Securities Act that apply to U.S. domestic issuers, which could limit our ability to access capital markets in the future. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be higher than the cost we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs.

We are an emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies may make our shares less attractive to investors and, as a result, adversely affect the price of our shares and result in a less active trading market for our shares.

We are an “emerging growth company” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that apply to other public companies that are not emerging growth companies. For example, we have qualified for an exemption from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act relating to internal control over financial reporting, and we will not require such an attestation from our auditors.

We may avail ourselves of these disclosure exemptions until we are no longer an emerging growth company. We cannot predict whether investors will find our shares less attractive because of our reliance on some or all these exemptions. If investors find our shares less attractive, it may adversely impact the price of our shares and there may be a less active trading market for our shares.

We will cease to be an emerging growth company upon the earliest of:

● | the last day of the fiscal year during which we have total annual gross revenues of $1,070,000,000 (as such amount is indexed for inflation every five years by the SEC or more);
● | the last day of our fiscal year following the fifth anniversary of the completion of our first sale of equity securities pursuant to an effective registration statement under the Securities Act;

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● | the date on which we have, during the previous three-year period, issued more than $1,000,000,000 in non- convertible debt; or
● | the date on which we are deemed to be a “large accelerated filer”, as defined in Rule 12b–2 of the Exchange Act, which would occur if the market value of our shares that are held by non-affiliates exceeds $700,000,000 as of the last day of our most recently-completed second fiscal quarter.

During 2020, the Company sold its first equity securities under the Securities Act. This means that the Company may no longer qualify as an emerging growth company following the fifth anniversary of the completion of the equity raise. The Company may instead thereafter have to comply with Section 404(b) of the Sarbanes-Oxley Act where our registered public accountant will be required to attest to management’s assessment of its internal controls over financial reporting as presented under Item 15B of Form 20-F.

If we fail to establish and maintain proper internal controls, our ability to produce accurate financial statements or comply with applicable regulations could be impaired.

Section 404(a) of the Sarbanes-Oxley Act requires that our management assess and report annually on the effectiveness of our internal controls over financial reporting and identify any material weaknesses in our internal controls over financial reporting. Although Section 404(b) of the Sarbanes-Oxley Act requires our independent registered public accounting firm to issue an annual report that addresses the effectiveness of our internal controls over financial reporting, we have opted to rely on the exemptions provided to us by virtue of being a foreign private issuer and an emerging growth company, and consequently will not be required to comply with SEC rules that implement Section 404(b) of the Sarbanes-Oxley Act until we lose our emerging growth company status.

If either we are unable to conclude that we have effective internal controls over financial reporting or, at the appropriate time, our independent auditors are unwilling or unable to provide us with an unqualified report on the effectiveness of our internal controls over financial reporting as required by Section 404(b) of the Sarbanes-Oxley Act, investors may lose confidence in our operating results, the price of our shares could decline and we may be subject to litigation or regulatory enforcement actions.

There is uncertainty with our Mineral Reserve and Mineral Resource estimates.

Our mineral reserve and mineral resource estimates described in this document are management’s best estimates and are a maiden report in accordance with the requirements of Subpart 1300 of Regulation S-K (“Subpart 1300”) and align with Canada’s National Instrument 43-101 (“NI 43-101”) for which original estimates were prepared. These estimates may not reflect actual mineral reserves and mineral resources, or future production. Should we encounter mineralization or formations different from those predicted by past drilling, sampling and similar examinations, mineral reserve and mineral resource estimates may have to be adjusted and mining plans may have to be altered in a way that might ultimately cause our mineral reserve and mineral resource estimates to decline. Our mineral resource estimates may never be upgraded to mineral reserves. Moreover, if the gold price declines, or if our labor, consumable, electricity and other production costs increase or recovery rates decrease, it may become uneconomical to recover our mineral reserves. Under these circumstances, we would be required to re-evaluate our mineral reserves and mineral resources. Mineral reserve and mineral resource estimates are based on drilling results and because unforeseen conditions may occur, the actual results may vary from the initial estimates. These factors could result in reductions in our mineral reserve and mineral resource estimates, which could in turn adversely impact the total value of our business.

U.S. investors may not be able to enforce their civil liabilities against us or our directors and officers.

It may be difficult to bring and enforce suits against us, because we were amalgamated and exist under the laws of Jersey, Channel Islands and are situated in Jersey, Channel Islands and do not have assets located in the United States.

All our assets are located outside the United States and most of our directors and all of our officers are residents of countries other than the United States. As a result, it may be difficult for investors to effect service of process on us or these non-United States resident persons within the United States or to rely in the United States upon judgments obtained in the United States based on the civil liability provisions of the U.S. federal securities laws against us or our officers and non-United States resident directors. In addition, our U.S. shareholders should not assume that the courts of Jersey, Channel Islands (i) would enforce judgments of U.S. courts obtained in actions against us, our officers or directors predicated upon the civil liability provisions of the U.S. federal securities laws or other laws of the United States, or (ii) would enforce, in original actions, liabilities against us, our officers or directors predicated upon the U.S. federal securities laws or other laws of the United States.

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We are incorporated under the laws of Jersey, Channel Islands and our principal offices are located outside of the United States which could have negative tax consequences for U.S. investors.

We are incorporated under the laws of Jersey, Channel Islands and are located outside of the United States. Accordingly, U.S. investors could be subject to negative tax consequences. If we choose to make an offering of securities in the United States, the applicable prospectus is expected to include a discussion of the material United States tax consequences relating to the purchase, ownership and disposition of any securities offered thereby, to the extent not set out in this Annual Report; however, investors should consult their own tax advisors as to the consequences of investing in Caledonia.

There is uncertainty as a result of the conflict in Ukraine

The recent outbreak of hostilities in Ukraine, and the accompanying international response including economic sanctions, has been extremely disruptive to the world economy, with increased volatility in commodity markets, including higher oil and gasoline prices, international trade and financial markets, all of which have a trickle-down effect on supply chains, equipment and construction. There is substantial uncertainty about the extent to which this conflict will continue to impact economic and financial affairs, as the numerous issues arising from the conflict are in flux and there is the potential for escalation of the conflict both within Europe and globally. There is a risk of substantial market and financial turmoil arising from the conflict which could have a material adverse effect on the economics of the Company’s projects, and the Company’s ability to operate its business and advance project development.

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ITEM 4 - INFORMATION ON THE COMPANY

A. History and Development of the Company

Caledonia Mining Corporation Plc (previously Caledonia Mining Corporation) was incorporated, effective February 5, 1992, by the amalgamation of three predecessor companies and was registered at the time under the Canada Business Corporations Act.

Following the creation of Caledonia its shares were listed on the TSX and quoted on the NASDAQ small caps market. On October 16, 1998, Caledonia announced that NASDAQ would no longer quote its securities for trading. Caledonia’s stock commenced trading on the OTCQX in June 2005.

Effective April 1, 2006 the Company purchased 100% of the issued shares of the Zimbabwean company, Caledonia Holdings Zimbabwe (Private) Ltd (“CHZ”) that held 100% of the shares of Blanket Mine. The purchase consideration was $1,000,000 and 20,000,000 shares of Caledonia. The Company acquired all the assets and assumed all the liabilities of CHZ.

The Company re-domiciled from Canada to Jersey using a legal process called “Continuance” on March 19, 2016. The Company operates under the Companies (Jersey) Law 1991, as amended, (the “Companies Law”). The Continuance had no effect on the Company’s listing on the TSX or on the trading facilities on AIM in London or on the OTCQX in the United States of America.

On July 24, 2017, the Company announced that its shares would be listed on the NYSE American and trading began on July 27, 2017. The trading of the Company’s shares on the OTCQX ceased upon the commencement of trading on the NYSE American.

Caledonia voluntary delisted its shares from the TSX on June 19, 2020. After the delisting, the Company remains a Canadian reporting issuer and has to comply with Canadian securities laws unless and until it can demonstrate that less than 2% of its beneficial shareholders are Canadian residents. On December 2, 2021, Caledonia issued and listed 619,783 depositary receipts representing an equivalent number of shares on the VFEX raising gross proceeds of $7.8 million.

As at the date of this report Caledonia’s securities trade on the NYSE American, AIM and VFEX under the ticker “CMCL”.

The addresses and telephone numbers of Caledonia’s principal offices are:

Registered and Head Office | African Office - South African Subsidiaries

Caledonia Mining Corporation Plc | Caledonia Mining South Africa Proprietary Limited
B006 Millais House, Castle Quay, St Helier | 4th Floor, 1 Quadrum office park
Jersey, Channel Islands | Johannesburg, Gauteng, 2198
JE2 3EF | South Africa
(44) 1534 679 800 | (27) 11 447 2499

Indigenization of Blanket Mine

On February 20, 2012 certain companies within Caledonia’s group of companies (the “Group”) announced that they had signed a Memorandum of Understanding (“MoU”) with the Minister of Youth, Development, Indigenization and Empowerment of the Government of Zimbabwe pursuant to which the Group agreed that indigenous Zimbabweans would acquire an effective 51% ownership interest in the Blanket Mine for a transactional value of $30.09 million. Pursuant to the above, the Group entered into agreements with each indigenous shareholder to transfer 51% of the Group’s ownership interest in Blanket Mine whereby it:

● | sold a 16% interest to the National Indigenisation and Economic Empowerment Fund (“NIEEF”) for $11.74 million;
● | sold a 15% interest to Fremiro, which is owned by indigenous Zimbabweans, for $11.01 million;
● | sold a 10% interest to Blanket Employee Trust Services (Private) Limited (“BETS”) for the benefit of present and future managers and employees for $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; and
● | donated a 10% ownership interest to the Gwanda Community Share Ownership Trust (“Community Trust”). In addition, Blanket Mine paid a non-refundable donation of $1 million to the Community Trust.

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Following completion of the underlying subscription agreements, advances were made to NIEEF and the Community Trust against their rights to receive dividends declared by Blanket Mine on their shareholdings as follows:

● | a $1.8 million payment to NIEEF on or about June 21, 2012;
● | a $2 million payment to the Community Trust on or before September 30, 2012;
● | a $1 million payment to the Community Trust on or before February 28, 2013; and
● | a $1 million payment to the Community Trust on or before April 30, 2013.

Advances made to NIEEF as an advanced dividend loan were settled through dividend repayments in 2014. Refer to note 5 of the Consolidated Financial Statements for the outstanding balance of the advanced dividend loan with the Community Trust. The final payment to settle the advance dividend loan to the Community Trust was made on September 22, 2021. Future dividends to the Community Trust will be unencumbered.

The Group facilitated the vendor funding of these transactions and the advanced dividend loans which were repaid by way of dividends from Blanket Mine. 100% of dividends declared by Blanket Mine as payable to the Community Trust were used to repay its advanced dividend loan until the beginning of 2020 when Blanket agreed that 80% of dividends declared by Blanket Mine would be used to repay such loan and the remaining 20% would unconditionally accrue to the Community Trust, which was the same arrangement that applied to the other indigenous shareholders (see below). 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. Subsequent to the indigenization transactions the facilitation loans relating to the Group were transferred as a dividend in specie to the Company.

On June 23, 2017, the Group, Blanket Mine and the indigenous shareholders of Blanket Mine reached agreement to change the interest terms of the facilitation and advanced dividend loan agreements. The agreements changed the interest rate from the previously agreed 12-month LIBOR + 10% to the lower of a fixed 7.25% per annum, payable quarterly or 80% of the Blanket Mine dividend in the quarter. The modification was considered beneficial to the indigenous shareholders and gave rise to an equity-settled share-based expense of $806,000 on June 23, 2017 when all parties reached agreement to modify the interest charged. It was agreed that the interest change was to be applied to the facilitation and advanced dividend loan balances from January 1, 2017.

Pronouncements from the Zimbabwe Government following the appointment of the new President in late 2017 declared a relaxation in the indigenization policy which, amongst other things, included the removal of an indigenization requirement for gold mining companies. These pronouncements were passed into law in March 2018. In light of the changed legislation, on November 6, 2018, the Company announced that it had entered into a sale agreement with Fremiro to purchase Femiro’s 15% shareholding in Blanket for a gross consideration of $16.667 million to be settled through a combination of the cancellation of the loan between the two entities (which stood at $11.467 million as at June 30, 2018) and the issue of 727,266 new shares in Caledonia at an issue price of $7.15 per share. On completion of the transaction on January 20, 2020, Caledonia owned 64% in Blanket and Fremiro held approximately 6.3% of Caledonia’s shares.

On February 27, 2020, the Company, Blanket Mine and the indigenous shareholders of Blanket Mine reached an agreement to change the repayment terms of the advance dividend loan to the Community Trust. The amendment allowed that 20% of the Community Trust’s share of the Blanket dividend would accrue to it on declaration of the dividend and that the remaining 80% be applied to the advance dividend loan from February 27, 2020. The modification was not considered beneficial to the other indigenous shareholders.

Blanket Mine - Capital Investment

The main capital development project is the central shaft at the Blanket Mine (“Central Shaft”) which will allow for three new production levels below the current operations; a fourth level is intended to be added in due course through a decline construction. Shaft sinking commenced in early 2015 and the shaft reached its target depth of 1,204 metres (approx. 4,000 feet) in July 2019. Work on equipping the shaft commenced in early January 2020, it was commissioned at the end of March 2021 and commercial operations commenced in April 2021. Central Shaft is currently being used to hoist development waste, men and material – thereby freeing up capacity at No. 4 Shaft to hoist ore.

Central Shaft was commissioned in March 2021, approximately 6 months later than planned due to delays arising from COVID-19 and poor electricity supply. The combined effect of these factors was that the horizontal infrastructure development around Central Shaft on 30 and 34 levels was delayed by 7 months.

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To minimise the effects of the delays to Central Shaft, approximately 2,000 meters of development on 26 level was completed before Central Shaft was commissioned using mid-shaft loading, a decline at AR South and the No. 6 Winze. The AR South decline and two further declines from 22 Level provide access to production areas that were scheduled to be accessed via Central Shaft. These declines allow production to achieve planned levels and the build-up in production to 80,000 ounces to continue, despite the delay to Central Shaft. However, the longer than expected use of the declines (which were extended to one production level more than had initially been planned) has added approximately 3,000 meters of additional development across the three declines which has increased planned capital expenditure for 2022 by approximately $3.5m. In addition, the cost of the capital development in 2022 (before taking into account the delays to Central Shaft) is approximately $0.8 million higher than originally planned, mainly due to the higher cost of operating the trackless equipment.

Development from Central Shaft has commenced northwards and southwards on 30 and 34 levels towards AR South and Eroica and is proceeding better than planned. The development southwards towards AR South has been completed, which is important to ensure that Blanket can achieve its production target of 80,000 ounces per annum from 2022 onwards. This development will also provide platforms for further deep-level exploration which is critical for upgrading the mineral resources.

In addition to the Central Shaft, work continued on the following developments:

| ● | Eroica Decline 3: this decline will continue down to the 30 and 34 levels (990m and 1,110m below collar, respectively) and will connect to the haulages from Central Shaft. Progress in the last quarter of 2021 has been good: sinking paused to allow development to open the orebody strike at 825m. Sinking has since resumed and the decline has advanced a further 133 meters to 840m;
| ● | Decline 4: this decline has reached 930m where an intermediate haulage has been cut to facilitate early production in 2022. This haulage will cover the high-grade areas of the Blanket No.3 orebody and the Blanket Quartz Reef and will continue south to open the extensive strike of Blanket No.2 orebody; and
| ● | Decline 5: the decline branches from Decline 4 at 885m and heads towards the high-grade AR South east-west limb. This decline reached 915m in the previous quarter; and has reached its destination at 930m.

In total, 810m of capital development were achieved in the last quarter of 2021 compared to a plan of 907m; 3,224m were achieved in 2021 against a plan of 2,864m.

In late 2019, Caledonia initiated a tender process to identify parties to make proposals for a solar project that would reduce Blanket’s reliance on grid and generator power. After careful consideration, Caledonia’s board approved the construction of a 12MWac solar plant at a construction cost of approximately $12 million although the projected cost is now $14.1 million. The plant is expected to provide all of Blanket’s minimum electricity demand during daylight hours; Blanket will continue to rely on the grid and generators to provide additional power during daylight hours and at night. It is estimated that the solar plant will provide approximately 27% of Blanket’s total daily electricity requirement. Battery power is currently too expensive to justify their use to augment the solar project, but the Company will continue to monitor this situation as battery technology develops. The Company will also evaluate a further phase for the solar project to provide Blanket’s peak demand during daylight hours, but this will require an agreement between the Company and the Zimbabwe authorities regarding the treatment of power that will be generated by a second phase that is surplus to Blanket’s requirements.

In 2020, the Company raised $13 million (before commission and expenses) through the sale of 597,963 shares at an average price of $21.74 per share.

The status of the project is as follows:

● | the 40-hectare site for the project has been cleared and fenced;
● | Caledonia has obtained the necessary licences and permits for the project;
● | Voltalia Portugal S.A. an international renewable energy provider, has been appointed as contractor for the project under an engineering, procurement and construction contract;
● | Caledonia provided Voltalia with a notice to proceed in March 2021 and has made an advance payment of $1.8 million for long lead time items that are required to construct the plant;
● | orders have been placed for approximately 80% of the solar equipment required to build the plant;
● | civil works on the internal roads, drainage, foundations for equipment and the operations and maintenance building have commenced; and
● | the majority of the equipment to construct the project is now en route to the site.

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On October 15 and October 21, 2021, the Company received notices from Voltalia advising that due to the rationing of power supply imposed against the Chinese manufacturers of certain components, implementation of the solar project may now be subject to an indeterminate delay. It is now expected that the plant will be commissioned in June 2022.

The Company has commenced the evaluation of a further phase for the solar project to provide Blanket’s peak demand during daylight hours. This will require an agreement between the Company and the Zimbabwe authorities regarding the treatment of power that will be generated by a second phase that is surplus to Blanket’s requirements and/or the installation of storage capacity.

Total cash capital expenditure in 2021 increased to $37,829,000 (2020: $27,840,000; 2019: $20,240,000). Significant projects on which capital expenditures were incurred in 2021 included:

| ● | Central shaft – $13.0 million
| ● | Capital development - $8.2 million
| ● | Sustainable mechanical engineering capex - $4.2 million
| ● | Autotap transformer (10 MVA) - $0.9 million
| ● | Solar plant - $1.6 million
| ● | Maligreen claims acquisition - $4 million
| ● | Exploration and evaluation assets - $1.7 million

Capital projects and expenditures are further analyzed in notes 18 and 19 of the Consolidated Financial Statements and under Item 4.B – “Business Overview”.

Available Information

The SEC maintains an internet site (http://www.sec.gov) that contains report, proxy and information statements and other information regarding issuers that file electronically with the SEC. Such information can also be found on the Company’s website (http://www.caledoniamining.com).

B. Business Overview

Description of Our Business

Blanket Mine

Caledonia’s primary focus is the operation of a gold mine and the exploration and development of mineral properties for precious metals. Caledonia’s activities are focused on Zimbabwe. The Company’s business during the last three completed fiscal years has been focused primarily on increasing production to 80,000 oz. of gold from 2022 through its investment plan at Blanket Mine.

Total gold production at Blanket Mine for 2021 was 67,476 oz. (2020: 57,899 oz.; 2019: 55,182 oz.). In terms of regulations introduced by the Zimbabwean Ministry of Finance in January 2014, all gold produced in Zimbabwe must be sold to Fidelity, a company which is controlled by the Zimbabwean authorities. Gold producers compete globally based on their operating and capital costs. Certain gold producers benefit from their ability to produce other minerals in commercial quantities as by-products. Caledonia derives approximately 0.1% of its revenues from silver, which is insignificant. 100% of Blanket’s revenues over the last three years was derived from its operations in Zimbabwe.

Maligreen

On September 23, 2021, Caledonia announced that it had entered into an agreement to purchase the mining claims over Maligreen, a property situated in the Gweru mining district in the Zimbabwe Midlands, from Pan African Mining (Private) Limited, a privately-owned Zimbabwean company, for a total cash consideration of US$4 million. The transfer of the claims to Caledonia and the payment of the purchase price was completed during the fourth quarter of 2021.

Maligreen is a brownfield gold exploration project situated on the Nkayi-Silobela Greenstone Belt that has historically been exploited via open pit mining. The total land area of Maligreen is approximately 550 hectares comprising two historic open pit mining operations that produced approximately 20,000 ounces of gold mined from oxides between 2000 and 2002 after which the operation was closed.

Significant historical exploration and evaluation work has been conducted on the property over the last 30 years including regional geochemical and geophysical (aeromagnetic and ground) surveys and 5 tonnes of bulk metallurgical test work. A total of 755 holes, of which 113 were diamond holes, have been drilled at the property over a combined 63,463 metres. These were completed in the period 1995 to 2001.

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No new exploration activities are currently active at the project, but the Company is planning to undertake additional exploration to fully understand the strike and depth extension potential as well as improve the confidence in the mineral resource and assess the potential for a mining operation. Initial focus is to re-log and where possible re-sample previously drilled core to satisfy the QAQC requirements to upgrade the current inferred mineral resource to at least an indicated status.

A Tribute Agreement is in place with Silobela Youth in Mining Syndicate for the Maligreen claims from 1 October 2020 to 30 September 2023, in terms of which Silobela Youth in Mining Syndicate may undertake mining activities over the claims. Silobela Youth in Mining Syndicate must pay to CHZ 5% of the value of minerals mined or a rental amount. The Silobela Youth in Mining Syndicate is actively mining as per the Tribute Agreement with royalty payments made as per the agreement.

Connemara North

In December 2020 Caledonia announced it had entered into an option agreement which gives the Company the exclusive right to explore the Connemara North property. Refer to note 19 of the Consolidated Financial Statements for more detail on the agreement.

Connemara North is the northern section of the currently closed Connemara mine which was previously owned by First Quantum Minerals (“First Quantum”); it was placed on care and maintenance in 2001 and subsequently disposed of in 2003. It has not been commercially mined since this time but before being placed on care and maintenance the Connemara mine produced approximately 20,000 ounces of gold per annum from an open pit heap leach operation. Previous public disclosures made by First Quantum in 2001 indicated that they had plans to expand the existing open pit operations at Connemara mine, when gold prices were approximately $300/oz.

On conclusion of management’s assessments it was decided not to exercise the option over the Connemara North claims as the results of the work indicated that the property does not meet Caledonia’s strategic objectives. The decision to not exercise the option will not have an impact on the Consolidated Financial Statements as the information required to make the decision was not available as at December 31, 2021. The decision will impair the Exploration and evaluation assets and increase the impairment expense by $463,000 in the Condensed Consolidated Interim Financial Statements as at March 31, 2022.

Glen Hume

On November 19, 2020 the Company concluded an option agreement (“Glen Hume option”) with the representatives of Glen Hume, whereby they granted the Company an option for the right to carry out legal due diligence and conduct drilling and/or other exploratory work over a period of 15 months from the conclusion date to understand the orebody of the Glen Hume property, situated in Gweru, Zimbabwe.

After concluding drilling and exploration to the value of $1.3 million the Company decided not to exercise the option over the Glen Hume property as the results of the exploration work indicated that the property does not meet Caledonia’s strategic objectives. This gave rise to an impairment of $3.8 million. No further costs or impairments in respect of Glen Hume are anticipated.

Eagle Vulture, Mascot and Penzance held for sale

Farvic Consolidated Mines (Pvt) Ltd (“Farvic”) requested permission from the Company to perform drilling on the Eagle Vulture, Mascot and Penzance orebodies to obtain an understanding of the technical feasibility and commercial viability of Eagle Vulture, Mascot and Penzance in 2019. Farvic later expressed their interest in buying the claims over Eagle Vulture, Mascot and Penzance in late 2020. Management evaluated the proposition and a price was determined in November of 2020. On February 24, 2021 Farvic and the Group concluded the sale contract at $500,000 and Blanket relinquished all rights to the properties. Accordingly, in the third quarter of 2021 Blanket completed the sale of Mascot, Eagle Vulture and Penzance properties for a cash consideration of $500,000. Refer to note 23.1 of the Consolidated Financial Statements for more detail on the sale of the exploration properties.

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Eersteling Gold Mining Company Limited

On May 31, 2018 the Group entered into an amended share sale agreement with SH Mineral Investments Proprietary Limited (“SH Minerals”) to sell the shares and claims of Eersteling Gold Mining Company Limited (“Eersteling”), a South African subsidiary previously consolidated as part of the Group, that has been on care and maintenance since 1997. The amended share sale agreement allowed for a purchase price of $3 million which would be settled by three payments of $1 million payable on the completion date, 12 and 18 months after the completion date. On January 31, 2019 all conditions for the sale were met and the Group transferred the registered and beneficial ownership of Eersteling to SH Minerals.

During 2021, the ZAR equivalent of approximately $0.34 million (2020: $0.9 million) was received. SH minerals was unable to make the final payment outstanding due to the closure of the operation during the South African lock-down period and the death of two of the purchaser’s principals. Operations at Eersteling appear to have been suspended again in late 2021. As it was no longer clear that the receivable of $761,000 can be recovered, it has been impaired. Refer to note 23.2 and 24 of the Consolidated Financial Statements.

Blanket Mine and Maligreen’s available mineral resources and reserves are disclosed under Item 4.D – “Property, Plant and Equipment” under the subheading of “Mineral Resource and Mineral Reserve Estimates”.

Mining Operations

Blanket Mine

On November 3, 2014 Caledonia announced the investment plan and production projections for the Blanket Mine. The objectives of the investment plan are to improve the underground infrastructure and logistics to allow efficient and sustainable production build-up.

Caledonia’s exploration activities are focused on the growth and development of Blanket Mine and on the Maligreen exploration property in respect of which Caledonia acquired mining claims during the last quarter of 2021.

There was no deep exploration drilling in the year 2021 as all the available drilling sites had been exhausted during \Central Shaft establishment and commissioning. Deep level exploration drilling will re-commence after the Central Shaft and related development has been completed and drilling platforms have been established to allow for drilling at depth.

Exploration at Blanket’s portfolio of satellite properties has been suspended since 2016 so that resources could be re-deployed at Blanket. Since then, the Company has evaluated other investment opportunities in Zimbabwe and has concluded that the satellite properties in the Gwanda area, other than GG, are unattractive due to their relatively small size, low grade, limited exploration potential, operating complexity and metallurgical incompatibility with the existing Blanket plant. Accordingly, Blanket has entered into an agreement with Farvic to sell the claims over Mascot, Eagle Vulture and Penzance properties for a cash consideration of $500,000. This transaction entails an impairment of the carrying value of these assets of $2,930,000 which is classified as “Other expense” in the Statement of Profit of Loss and Other Comprehensive Income and is a non-cash item. Accordingly, in the third quarter of 2021, Blanket completed the sale of Mascot, Eagle Vulture and Penzance properties for a cash consideration of $500,000.

The GG satellite property remains on care and maintenance. Limited surface drilling was undertaken during 2021 to test for parallel zones to the south of the existing mineralised zone. Preliminary results are being considered along with additional metallurgical studies. The Lima pilot plant, which could be used to process any material from GG, is being upgraded to accommodate 200 tonnes per day.

Metallurgical Process

Metallurgical plant – Blanket Mine

The Blanket Gold Plant established on the Blanket Mine site consists of crushing, milling, carbon-in-leach and batch elution electro-winning circuits. The processing rate could be increased once planned milling upgrade has been completed. Average plant recovery was 93.9% for 2021, compared to 93.8% in 2020 (2019: 93.4%). The improved recovery was due to the improved grade and the increased proportion of free gold in the ore.

Also, contributing to the improved recoveries are the commissioning of the new oxygen plant in October 2019 and the commissioning of an upgraded oxygen sparging system in the first quarter of 2020. The new oxygen plant has also reduced cyanide consumption by approximately 15%. In the last quarter of 2020 work commenced on installing an additional mill which should increase milling capacity from 75 to 100 tonnes per hour which will be required to achieve target production of 80,000 ounces per annum.

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An additional re-grind mill will be installed before the end of the second quarter of 2022 to achieve the required daily throughput at a consistently fine grind.

Planning of a new tailings storage facility is underway and is expected to be completed in 2022 to enable uninterrupted production.

Safety, Health and Environment

The following safety statistics have been recorded for the year 2021 and the preceding two years.

Classification | 2019 | 2020 | 2021
Fatal | - | - | -
Lost time injury | 3 | 6 | 3
Restricted work activity | 17 | 9 | 6
First aid | - | 1 | 1
Medical aid | 11 | 12 | 21
Occupational illness | - | - | -
Total | 31 | 28 | 31
Incidents | 54 | 59 | 62
Near misses | 22 | 24 | 22
Disability Injury Frequency Rate | 0.12 | 0.52 | 0.26
Total Injury Frequency Rate | 1.2 | 0.97 | 1.05
Man-hours worked (thousands) | 5,174 | 5,789 | 6,199

In 2018 a training facility (called the Nyanzvi initiative) was established at Blanket using dedicated facilities and specially trained facilitators. The Nyanzvi programme was suspended from late March 2020 due to the need to observe social distancing because of COVID-19 which contributed to the increase in reportable events in the second half of 2020. The Nyanzvi safety training initiative was resumed in the fourth quarter of 2021 as COVID-19 restrictions were relaxed; management believes this will help to increase general safety awareness. Safety training is an ongoing exercise and it will remain an area of focus for management. Blanket’s headcount increased in 2021 and, despite intensive training for new employees, they appear to have lower safety awareness.

Unfortunately, on February 21, 2022 there was a fatal accident in a development haulage involving an LHD vehicle. The board and management of Caledonia extended their condolences to the family and colleagues of the deceased.

The Group takes the safety of its employees very seriously and, accordingly, measures have been taken to instill adherence to prescribed safety procedures.

Exchange Controls, Social Investment and Contribution to the Zimbabwean Economy

Exchange control approvals from the RBZ and the Reserve Bank of South Africa are required on the flow of funds in and out of Zimbabwe and South Africa. The Company obtained necessary approvals from both the RBZ and the Reserve Bank of South Africa to transfer foreign currency during the fiscal year ended December 31, 2021.

Additionally, Blanket Mine’s investment in community and social projects which are not directly related to the operation of the mine or the welfare of Blanket Mine’s employees, the payments made to the Community Trust in terms of Blanket Mine’s indigenization, and payments of royalties, taxation and other non-taxation charges to the Zimbabwe government and its agencies are set out in the table below.

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Payments to the Community and the Zimbabwe Government ($’000’s)
|  | Community and Social Investment | Payments to GCSOT | Payments to Zimbabwe Government | Total
Year 2019 |  | 47 | - | 10,357 | 10,404
Year 2020 |  | 1,689 | 184 | 12,526 | 14,399
Year 2021 |  | 1,163 | 948 | 16,426 | 18,537

General Comments

Caledonia’s activities are centered on Zimbabwe and occur year-round. Caledonia is not dependent, to any material extent, on patents, licenses, contracts, specialized equipment or new manufacturing processes at this time. However, there may be occasions that Caledonia may wish to adopt such patents, licenses, specialized equipment, etc. if these are economically beneficial to its operations. All mining and exploration activities are conducted under the various economic, mining and environmental regulations of the country where the operations are being carried out. It is always Caledonia’s standard that these regulations are complied with by Blanket Mine. Caledonia has not experienced a shortage of availability of raw materials or significant price volatility.

Refer to note 4(b)(ii) of the Consolidated Financial Statements and Item 3.D – “Risk Factors”, under the subheading “We do business in countries and jurisdictions outside of the United States where different economic, cultural, regulatory, monetary and political environments could adversely impact our business, results of operations and financial condition” where the material effects of government regulations of the Company’s business are disclosed.

Investors should recognize that Blanket’s ability to implement its investment programme and Caledonia’s ability to sustain its operations outside Zimbabwe and pay future dividends depends, inter alia, on the ability to externalise cash from Zimbabwe.

The sale of precious metals is recognized as revenue when the metal is accepted at the refinery by Fidelity (“Lodgement date”). Control is transferred and the receipt of proceeds is substantially assured at point of delivery. Revenue for each delivery is measured at the London Base Metal Association Tuesday PM price post-delivery less 1.25%, being the fair value receivable at the date of the transaction. On average settlement occurs within 14 days of delivery.

C. Organizational Structure

The Company has the following organizational structure as at May 17, 2022:

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D. Property, Plant and Equipment and Exploration and evaluation assets

Overview

The Company is engaged in the exploration, development and production of gold and other precious metals from its mineral properties. The Company’s two material mineral properties, both located in Zimbabwe, are:

| ● | the production-stage Blanket gold mine (64% interest); and

| ● | the exploration-stage Maligreen project (100% interest).

The Blanket Mine operation is located in the Matabeleland South Province, while the Maligreen project is located in the Midlands Province as illustrated below.

The Company does not have interests in any other mineral properties, following the disposition of the Company’s interests in Connemara North, Glen Hume, Eagle Vulture, Mascot and Penzance, and Eersteling.

Certain of the information set forth in this annual report is derived from the following:

| ● | For the Blanket Mine, the Subpart 1300 technical report summary entitled “S-K 1300 Technical Report Summary on the Blanket Gold Mine, Zimbabwe”, with an effective date of December 31, 2021, prepared by Qualified Persons Uwe Engelmann and Daniel (Daan) van Heerden, each of which is employed by Minxcon (Pty) Ltd, and the NI 43-101 technical report entitled “NI 43-101 Technical Report on the Blanket Gold Mine, Zimbabwe”, with an effective date of January 1, 2020, also prepared by Messrs. Engelmann and van Heerden; and

| ● | For the Maligreen project, the Subpart 1300 technical report summary entitled “S-K 1300 Technical Report Summary on the Maligreen Gold Project, Zimbabwe”, with an effective date of December 31, 2021, prepared by Mr. Engelmann, and the NI 43-101 technical report entitled “NI 43-101 Mineral Resource Report on the Maligreen Gold Project, Zimbabwe”, with an effective date of August 31, 2021, also prepared by Mr. Engelmann.

Neither Mr. Engelmann or Mr. van Heerden is an employee of the Company and both are Qualified Persons as defined in accordance with both Subpart 1300 and NI 43-101. Each is an employee of Minxcon (Pty) Ltd. None of Messrs. Engelmann or van Heerden or Minxcon (Pty) Ltd is an affiliate of the Company or any other company that has, nor do any of them have, any ownership, royalty or other interest in the Blanket Mine or the Maligreen project.

The Blanket Mine is the Company’s only production stage property. Annual production information for the previous three years is provided below, under “Material Properties – Blanket Mine”.

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Mineral Resources

Mineral resources are stated as exclusive of mineral reserves and as attributed values. Ordinary kriging was employed for all estimates and confined to the property boundaries to which we have legal rights to explore and mine.

The Blanket Mine mineral resources occur as underground resources and estimates have been depleted for mining. Measured, indicated and inferred mineral resources are declared due to the continuity of the geology and grade as well as a history of proven historical mining. The inferred mineral resources show geological continuity, while grade continuity requires improvement through additional drilling. A cut-off of 1.5 g/t was utilised for Blanket Mine based on a gold price of USD1,600/oz. No geological losses were applied to the Blanket Mine measured mineral resources, while 5% discount was applied to the indicated and inferred categories.

The mineral resources for Maligreen are reported at surface (all resources <220 m from surface) and underground (>220 m from surface). Owing to the lack of confidence in the data, only an inferred mineral resource was defined. A cut-off of 0.4 g/t was applied to the surface resources, while a cut-off of 1.5 g/t was applied to the underground portion based on a gold price of USD1,800/oz. A 15% geological loss discount was applied to the inferred mineral resources to account for geological, data and estimation uncertainty.

Mineral Resources Exclusive of Mineral Reserves |
| Tonnes (Mt) | Grade (g/t) | Gold (koz)
Zimbabwe | Blanket | Measured | 0.6 | 2.80 | 48
| Underground | Indicated | 1.6 | 2.78 | 142
| (64% | Measured + Indicated | 2.1 | 2.77 | 190
| attributable) | Inferred | 5.4 | 3.17 | 552
| Maligreen | Measured | - | - | -
| Surface | Indicated | - | - | -
| (100% | Measured + Indicated | - | - | -
| attributable) | Inferred | 13.6 | 1.63 | 712
| Maligreen | Measured | - | - | -
| Underground | Indicated | - | - | -
| (100% | Measured + Indicated | - | - | -
| attributable) | Inferred | 2.0 | 3.60 | 228
Total Measured + Indicated | 2.1 | 1.80 | 190
Grand total | 23.1 | 2.26 | 1,683

Mineral Reserves

Zimbabwe | Blanket | Proven | 0.7 | 3.11 | 66
| Underground | Probable | 1.8 | 3.30 | 186
| (64% attributable) | Total | 2.4 | 3.25 | 251

Notes for mineral reserves:

| 1. | Mineral reserve cut-off of 2.1 g/t applied.

| 2. | The gold price that has been utilised in the economic analysis to convert diluted measured and indicated mineral resources in Blanket’s life-of-mine plan (“LoMP”) to mineral reserves is an average real term price of USD1,622/oz over the LoMP, using the forecast prices as per economic analysis.

| 3. | The mineral reserve estimation utilises the depleted 2022 mineral resource estimation and the 2020 mine design and LoMP.

| 4. | Mineral reserves are reported as 64% attributable to Caledonia Mining Corporation Plc.

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Regional Geological Setting

Zimbabwe’s known gold mineralisation occurs in host rocks of the Zimbabwe Craton, which is made up of Archaean rocks. The geology of the Craton is characterised by deformed and metamorphosed rocks which include high-grade metamorphic rocks, gneisses, older granitoids, greenstone belts, intrusive complexes, younger granites and the Great Dyke. The Chingezi gneiss, Mashaba tonalite and Shabani gneiss form part of a variety of tonalities and gneisses of varying ages. Three major sequences of slightly younger gold-bearing greenstone belt supracrustal rocks exist:

| ● | Older greenstones called the Sebakwian Group, which are mostly metamorphosed to amphibolite facies. They comprise komatiitic and basaltic volcanic rocks, some banded iron formation (“BIF”), as well as clastic sediments.

| ● | The Lower Bulawayan Group, which comprises basalts, high-Mg basalts, felsic volcanic rocks and mixed chemical and clastic sediments. The Lower Bulawayan Group forms the Belingwe (Mberengwa) greenstones.

| ● | The Upper Bulawayan (upper greenstones) and Shamvaian groups, which comprise a succession of sedimentary and komatiitic to tholeiitic to calc-alkaline rocks.

Three metamorphic belts surround the Zimbabwe Craton:

| ● | Archaean Limpopo Mobile Belt to the south;

| ● | Magondi Mobile Belt on the north-western margin of the Craton; and

| ● | Zambezi Mobile Belt to the north and northeast of the Zimbabwe Craton.

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Material Properties

Blanket Mine

Property Description and Ownership

The Blanket Mine is an operating underground gold mine situated on the Gwanda Greenstone Belt (“GGB”) targeting shear zone hosted gold mineralisation. The Mine complex comprises a cluster of mines extending from Lima in the north, through Eroica, Sheet, AR Main, AR South, the currently defunct Feudal, Blanket Section (Blanket 1 to Blanket 6) and Jethro over a total strike length of some 3 km. Gold has been commercially mined at the Project Area from several closely-spaced orebodies defining a mineralised trend via several shafts since the early 1900s. The Mine covers the operating claims of Jethro, Blanket, Feudal, Harvard, Mbudzane Rock, Oqueil, Sabiwa, Sheet, Eroica and Lima, largely encompassed in a 2,120ha Mining Lease. Ore is processed at an on-site plant.

The Company indirectly owns 64% of the shares of Blanket Mine, the operator of which is Blanket Mine (1983) (Private) Limited, after the purchase of Fremiro’s 15% shareholding became effective in January of 2020. The Blanket Mine is fully equipped with all the necessary plant and equipment to conduct mining operations and the production of gold from the ore mined from the mine.

As illustrated below, the Mine is located in the southwest of Zimbabwe, approximately 15 km northwest of Gwanda, the provincial capital of Matabeleland South. Gwanda is located 120 km southeast of Bulawayo, 200 km northwest of the Beitbridge Border post with South Africa, and 560 km from Harare, Zimbabwe's capital city. The Mine is centred on the coordinates (WGS84 system) 20°52' S, 28°54' E.

The table below indicates the aggregate annual production from Blanket in the last three fiscal years:

Blanket Mine Production Statistics
Year | Tonnes Milled (t) | Gold Head (Feed) Grade (g/t Au) | Gold Recovery (%) | Gold Produced (oz)
2019 | 556,331 | 3.31 | 93.4 | 55,182
2020 | 597,962 | 3.21 | 93.8 | 57,899
2021 | 665,628 | 3.36 | 93.9 | 67,476

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Blanket Mine employs two mining methods, namely long-hole stoping and underhand stoping, determined mainly by the width of the mineral deposit. Infrastructure as well as power and water supply are well-established infrastructure to support and sustain mining and processing operations. To date in excess of 1 million ounces of gold have been produced from the property.

The Blanket Gold Plant established on the Blanket Mine site consists of crushing, milling, carbon-in-leach and batch elution electro-winning circuits. The plant treats an average of 55,000 tonnes per month at a recovery of approximately 94%. The recovery performance is expected to continue, while the processing rate could be increased once planned milling upgrade has been completed. Construction of a new tailings storage facility is under investigation. Initially planned for late 2022, the design is under review to ensure international best practice is met whilst enabling uninterrupted production.

For a detailed breakdown of the property, plant and equipment and encumbrances thereon refer to note 18 of the Consolidated Financial Statements. The property, plant and equipment of the Group is predominantly held in Zimbabwe and the continued implementation of the investment plan is expected to increase the property, plant and equipment of the Group. Refer to note 19 of the Consolidated Financial Statements for a detailed breakdown on the exploration and evaluation properties of the Company and encumbrances thereon, as well as Item 4.A - “History and Development of the Company”.

The issuing and control of mineral rights in Zimbabwe is regulated by the Mines and Minerals Act (Chapter 21:05) of 1961 (MMA), administered by the Mining Commissioner of the regional mining district. The mineral resources are vested in the State through the President of Zimbabwe.

The Government of Zimbabwe does not participate in managing the projects of local or foreign firms in the private sector. Presently, government participation in mining is through Zimbabwe Mining Development Corporation (ZMDC) and through the Minerals Marketing Corporation of Zimbabwe (MMCZ). The ZMDC was formed in 1982 for government to participate in the mining sector and to save companies that were being threatened to close. It is active in exploration, mining and giving assistance to cooperatives and small-scale miners. The MMCZ was formed in 1992 and is responsible for marketing all the country's minerals and metal products except gold and silver which are sold through the Reserve Bank. It finances its operations by a commission charge of 0.875% on sales conducted for its clients.

In Zimbabwe, mining and mine development may be conducted with a mining claim, mining lease, special mining lease and special grant. A mining claim covers a small area, thus usually several claims are grouped to form a block of claims. The claim confers on the holder the exclusive right to mine the mineral resource for which the claim was registered. Mining claims are dependent on the claim holder applying to the Mining Commissioner for and obtaining an inspection certificate on an annual basis; failure to do so may result in the forfeiture of the relevant claim. A block of claims may be transformed into a mining lease for simplicity of administration.

The Blanket Mine's interests in Zimbabwe include a mining lease, operating claims (i.e., on-mine), non-operating claims and a portfolio of brownfields exploration projects (satellite projects). Blanket Mine operates under a mining lease issued by the Mining Affairs Board of Zimbabwe with registered number 40 (ML40) which was issued under the MMA to Blanket Mine (1983) (Private) Ltd, a 64% held indirect subsidiary of the Company, on May 24, 2019 and is annually renewed. The mine’s claims under the lease cover an area of 2,120 ha.

A copy of ML40 is attached hereto as Exhibit 4.9.

Blanket Mine also has several registered claims, not incorporated under the lease. The 59 claims contiguous to the mining lease comprise a total area of approximately 994 ha. Blanket Mine provided a separate list of non-operating claims located away from ML40 and the adjoining claims described above, that form a portion of their Gwanda portfolio. These non-producing claims (“satellite projects”) consist of 217 blocks of registered base metal (Ni, Cu and As) and precious metal claims covering a total area of 2,672 ha. A number of claims are subject to active tribute agreements between the mine and local small scale miners.

History

The Blanket Mine is part of the Sabiwa group of mines within the Gwanda Greenstone Belt from which gold was first extracted in the 19th century. The Blanket Mine is a cluster of mines extending some 3 km from Jethro in the south through Blanket itself, Feudal, AR South, AR Main, Sheet, and Eroica, to Lima in the north. Blanket Mine has produced over a million ounces of gold during its lifetime.

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Following sporadic artisanal working, the Blanket Mine was acquired in 1904 by the Matabele Reefs and Estate Company. Mining and metallurgical operations commenced in 1906 and between then and 1911, 128,000 t were mined. From 1912 to 1916 mining was conducted by the Forbes Rhodesia Syndicate who achieved 23,000 t. There are no reliable records of mining for the period between 1917 and 1941 and it is possible that operations were adversely affected by political instability during World Wars I and II. In 1941 F.D.A. Payne produced some 214,000 t before selling the property to Falconbridge in 1964 (Blanket Mine, 2009). Under Falconbridge, production increased to 45 kg per month and the property yielded some 4 Mt of ore up until September 1993. Kinross Gold Corporation (“Kinross”) then took over the property and constructed a larger Carbon-in-Leach plant with a capacity of 3,800 tpd. This was designed to treat both run of mine (“RoM”) ore and an old tailings dump.

The Blanket Mine is currently 64% indirectly owned and operated by Caledonia, which initially completed the purchase of the mine from Kinross on 1 April 2006. The Blanket Mine re-started production in April 2009 after a temporary shut-down due to the economic difficulties in Zimbabwe.

Present Condition and Infrastructure

The Blanket Mine consists of a series of small shafts providing access to the underground workings of the various orebodies that are being mined. The main access and draw points are accessed by the shafts indicated in the table below.

Name | Description
Jethro Shaft | The shaft has dimensions of 3 m x 2 m and is mainly utilised for the transport of men and material from surface to 7 and 9 Level. The shaft is equipped with a single drum winder with a 19 mm rope and capacity of 10 men.
5 Winze (Sub-Shaft) | 5 Winze has dimensions of 3 m x 2 m and is a sub-shaft and is mainly used to transport men and materials between 9 Level and 22 Level. This shaft is similarly to Jethro shaft equipped with a single drum winder with a 19 mm rope and a capacity of 10 men.
6 Winze (Sub-Shaft) | 6 Winze has dimensions of 3 m x 2 m and is a sub-shaft used mainly for the hoisting of ore from 26 Level to 22 Level from where ore is transported to No. 4 Shaft for hoisting to surface. This shaft is equipped with a 112 kW single drum winder with a 22 mm rope and a capacity of 3 t per skip or 500 tpd. At the bottom of 6 Winze shaft is a 12 kW spillage winder equipped with a 13 mm diameter winding rope.
Blanket Shaft (No. 4 Shaft) | No. 4 Shaft was historically the main production shaft of Blanket Mine. No. 4 Shaft has dimensions of 4 m x 2 m with two compartments. This shaft is mainly used for the hoisting of ore and waste rock from 22 Level to surface. The shaft is equipped with a 560 kW thyristor driven double drum winder with a 34 mm rope and capacity of 6 t per skip or 3,000 tpd.

The Blanket Mine is an underground mine in the production stage, and a number of expansion projects have either been completed or are planned for the Blanket mining operations in order to increase production. The majority of the expansion projects will consist of the below 750 m Level (22 Level) expansion projects. The first project includes the sinking and construction of the new Central Shaft (CMS) in-between the AR Main and AR South / Blanket orebodies from surface to 1,204 m (just above 38 Level) and its associated infrastructure. Sinking and equipping of the shaft has been completed with the development of the associated orepass system and loading station development is currently in progress.

Further projects include the development of various decline shaft infrastructure targeting specific mining areas in order to increase production.

Surface infrastructure comprises mine offices, change houses, mine headgears, workshops, storerooms, a processing plant, hospital, tailings facility and an assay laboratory. Production shafts on surface consist of the No. 4 Shaft and the Jethro Shaft. Sub-shaft infrastructure in the form of the No 5 Winze connects Jethro to the underground workings. Other shafts and raise bore holes on surface, primarily used for ventilation purposes, include Lima, Eroica and Sheet. A total of 11 hoists are installed at the mine, three of which are used for ore handling (No. 2 incline shaft, the sub-vertical shaft and 6 Winze shaft).

The existing infrastructure at Blanket will be utilised in parallel with new infrastructure which is specifically aimed at targeting the below 22 Level mining areas. The extensions entail the sinking of the new CMS (currently completed with the exception of the loading station and orepass system) from surface down to 1,204 m (just above 38 Level). 6 Winze sub-shaft located close to 5 Winze sub-shaft is used to access the Blanket complex below 22 Level and will provide secondary access to the new CMS.

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The new CMS is not lined and has a four-compartment, 6 m diameter layout, equipped with a 2 x 3,642 kW double-drum winders, one for rock and the other for men and material. Once fully equipped and commissioned, this shaft will be used as the main route for the transport of men, material and rock.

On surface, a 900 mm wide, 50 m long overland waste conveyor will transport waste rock to a rock dump. Additional supporting surface infrastructure will include shaft offices, change rooms, lamp rooms, etc. New housing for both senior and junior staff is also planned in anticipation of the increased production profile.

A tailing storage facility is also located in close proximity to the mining area. The labour force and their families reside within a kilometre of the mine in accommodation provided by the mine.

Underground drilling is conducted with Seco 23, Seco 25, Seco 215 rock drills and Seco 36 (Konkola) drifters. The rock drills are used mainly for development and the drifters for production, i.e. long-hole drilling.

Similar to the underground rail-bound fleet, the same mining equipment utilised at the operational sections of Blanket Mine will be utilised once the expansion projects of the CMS have been completed with some additional quantities to allow for the planned increase in production.

ZESA supplies power to Blanket Mine from their main substation in Gwanda. The main supplies are the 33 kV and the 11 kV overhead lines. The 33 kV supply feeds Lima, Reclamation and the main substation at No. 4 Shaft, adjacent to the processing plant. The 11 kV supply feeds Jethro shaft, slimes dam, Smiler shaft and the village.

The Company has approved a 12 MW ac solar power plant to supplement existing power supply to the Blanket Mine. A further phase to the solar plant is being considered. The solar plant, the ZESA supply and the 18MVA generators work in combination to supply Blanket Mine with an economical hybrid power solution.

Caledonia’s approach to its electricity requirements is threefold:

| i. | continue to engage constructively with ZESA with the objective of securing cheap, reliable and stable power from the grid. This includes agreeing a realistic electricity pricing formula in the context of the current monetary conditions; assisting ZESA to repair and maintain its equipment and participating in an industry-wide scheme to import power. On August 9, 2019 Blanket signed a new power supply agreement in terms of which Blanket will receive uninterrupted power in return for a US Dollar-denominated tariff which, although cheaper than the tariff which prevailed until December 31, 2018, is still sufficient to allow ZESA to import power so that (subject to the availability of power in neighboring countries) it can keep its supply commitment to the participants in the scheme. This arrangement has worked reasonably well, although Blanket continues to experience less severe outages during periods when South Africa’s electricity system has come under pressure;

| ii. | utilize Blanket’s standby diesel generating capacity. Diesel generators are not a long-term solution to the electricity problem: diesel power is expensive and requires large quantities of diesel which is environmentally damaging and is not always easily available; and

| iii. | install a 12MWac solar power plant to supply some of Blanket’s requirements.
| The status of the project is as follows:

| ● | the 40-hectare site for the project has been cleared and fenced;

| ● | Caledonia has obtained the necessary licences and permits for the project;

| ● | Voltalia has been appointed as contractor for the project under an engineering, procurement and construction contract;

| ● | Caledonia provided Voltalia with a notice to proceed in March 2021 and has made an advance payment of $1.8 million for long lead time items that are required to construct the plant;

| ● | orders have been placed for approximately 95% of the solar equipment required to build the plant;

| ● | civil works on the internal roads, drainage, foundations for equipment and the operations and maintenance building have commenced and nears completion;

| ● | the majority of the equipment to construct the project has either been delivered or is en route to the site and final assembly has commenced;Approximately 4,300 holes have been drilled and filled for the ground mounting structure to be constructed; and

| ● | the mounting structure has been constructed for one of the four main blocks and 7,728 panels have been installed of the 25,760. 15,770 meters of LV cabling has been installed of the total 15,932 metres.

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The district is serviced by telecommunication services, and Blanket Mine provides its own Wi-Fi and communication systems.

The A6 highway, forming part of the Trans-African Highway network, is orientated roughly northwest-southeast and links Bulawayo with the Beitbridge border post and Musina in South Africa. The highway runs through the town of Gwanda. A major sealed road, the Old Gwanda Road, branches off from the A6 in Gwanda and runs directly through the ML 40 area to Bulawayo. Blanket’s mining claims are all located along these major roads and are thus easily accessible. The roads are sealed and although potholing is frequent, the surfaces are navigable by all vehicles. The Beitbridge Bulawayo Railway runs roughly parallel to the A6 through Gwanda Town.

An airstrip and informal airport building are located in Gwanda along the A6. The Joshua Mqabuko Nkomo International Airport is located in Bulawayo. The mine can be accessed either via the Beitbridge-Bulawayo road, or by flying into Bulawayo and driving two hours via the Old Gwanda Road or the A6 to the site.

Permitting, Licenses and Encumbrances

The mine is compliant in terms of authorisations and adheres to all government protocols and regulations as required.

Water for the operations is sourced from the Blanket Dam that is situated on the Mtshabezi River and owned by the Zimbabwe National Water Authority (“ZINWA”). The use of this water is authorised through a contract agreement between Blanket and ZINWA in terms of the Zimbabwe National Water Authority Act (Chapter 20:251). In terms of this agreement, Blanket is allowed to extract 1,200,000 m3 of water for the period 1 April 2020 to 31 March 2021. The agreement is valid for one-year periods and is renewed annually. ZINWA annually send to Blanket the renewable agreement for signing. Blanket continues to extract water in the interim at a rate of ZWL18.00/m3.

In accordance with paragraph 178(2)(a)(b)(c) of the MMA, the owners of claims possess the right to use of any surface within the boundaries for all necessary mining purposes; the right to use, free of charge, soil, waste rock or indigenous grass situated within the claims boundaries for all necessary mining purposes; and the right to sell or dispose of recovered waste rock. The MMA Amendment Bill makes instruction for landowner compensation in case of land loss due to mining activities in the form of land reallocation or outright purchase. The activities of the Company have not triggered this compensation.

The Indigenisation and Economic Empowerment Act, which was enacted in 2007, required that 51% of the equity of all commercial enterprises in Zimbabwe must be owned by indigenous Zimbabweans. Following the implementation of indigenisation, Caledonia received the Certificate of Compliance from the Government of Zimbabwe which confirmed that Blanket Mine 1983 (Pvt) Ltd was fully compliant with the Indigenisation and Economic Empowerment Act. The requirement for gold mining companies to be indigenised was removed by a change in legislation with effect from March 2018. A 36% share of Blanket Mine 1983 (Pvt) Ltd is currently held by indigenous parties.

In Zimbabwean mining legislation, an Environmental Impact Assessment (“EIA”) is not required in order to issue a mining claims and in terms of the Environmental Management Act and its First Schedule is only required prior to commencement of mining and forms part of the planning process. Blanket Mine was established in the early 1900s, long prior to the implementation of governing mining and environmental laws. As such, it appears that an EIA is not required for the Blanket Mine. However, the mine is in constant communication with the Environmental Management Agency (“EMA”) regarding environmental permitting requirements and an EIA was completed for the mine in 1995. Should the EMA communicate that an EIA certificate for the mine be obtained, the mine will submit all relevant and associated applications to obtain such and remain fully compliant.

In order for operations to continue, the EMA has issued a number of additional environmental licences to Blanket as listed in the table below. The certificates are valid for 1 year and renewed annually. Applications for hazardous waste generation (oils, chemicals, etc.) licences have been submitted and are pending EMA review. New environmental disturbances will require additional permits further to those listed below, and currently no further disturbances have been identified.

Environmental Permits

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Licence Type | Licence Number | Activity | Validity
Air Emissions | 8000103302 | Diesel generator emission | 22 April 2022 – 31 Dec 2022
Air Emissions | 8000103303 | Clinic incinerator | 29 Mar 2022 -31 Dec 2022
Air Emissions | 8000102171 | Blacksmith | 29 Mar 2022 -31 Dec 2022
Air Emissions | 8000102170 | Assay laboratory | 29 Mar 2022 -31 Dec 2022
Air Emissions | 8000102172 | Smelter | 29 Mar 2022 -31 Dec 2022
Effluent Disposal | 8000102176 | Car wash | 29 Mar 2022 -31 Dec 2022
Effluent Disposal | 8000102175 | Ablution facilities (sewage, 15 kLpm, disposal : irrigation) | 29 Mar 2022 -31 Dec 2022
Hazardous Substance Importation | 8000098441 | Sodium cyanide, sodium hydroxide, acids | 18 May 2021 – 17 May 2022
Hazardous Substance Storage and Use | 8000102234 | Sodium cyanide, diesel, acids, caustic soda | 29 Mar 2022 -31 Dec 2022
Hazardous Substance Transportation | 8000103299 | Sodium cyanide, caustic soda, acids, diesel | 15 May 2022 – 17 May 2023
Hazardous Waste Generation | 8000102243 | Used oils, clinical waste (0.5 t, salvage yard) | 29 Mar 2022 -31 Dec 2022
Solid Waste Disposal | 8000102241 | Domestic waste (land filling, 1,500 t) | 29 Mar 2022 -31 Dec 2022
Solid Waste Disposal | 8000102173 | Tailings storage facility (24,453 kL) | 29 Mar 2022 -31 Dec 2022
Waste Management- Sanitary Landfill | 8000092448 | Blanket Mine Sanitary Landfill | 07 Aug 2020 -06 Aug 2022
Energy-Solar | 8000101044 | Blanket Mine Solar PV Plant | 08 Sept 2021 – 07 Sept 2022

Geological Setting, Mineralization and Deposit

The Blanket Mine is situated on the north-western limb of the Archaean Gwanda Greenstone Belt. Several other gold deposits are situated along the same general strike as the mine. Approximately 268 mines operated in this greenstone belt at one stage; however, the Blanket Mine is one of the few remaining operational mines. At Blanket Mine, the rock units strike north−south, and generally dip steeply to the west.

The local geology consists of the Felsic Unit made up of, largely, quartz and quartz-sericite schists overlain by the Mafic Unit. The lower zone of the Mafic Unit comprises ultramafics and banded iron formations which host the orebodies of the Vubachikwe mine, that is located south of Blanket. The upper zone of the Mafic Unit is made up of massive to pillowed basaltic lavas with intercalations of interflow sediments now showing as cherty argillites (locally commonly referred to as Black Markers) and this hosts the Blanket complex orebodies. The Blanket orebodies are in an orogenic setting with hydrothermal mineralization hosted in selected shears of country basaltic metavolcanics. This package is intruded by a younger and seemingly barren olivine-gabbro sheet. The sequence is capped by an Intermediate Unit comprising andesitic lavas with amphibole feldspar schists.

The generalised stratigraphic column for the area is shown below.

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The Blanket complex orebodies together with those of the Vubachikwe complex comprise the north-western Mining Camp, also called the Sabiwa group of mines. Blanket Mine complex is a cluster of deposits that extend from Jethro in the south, through Blanket, Feudal, AR South, AR Main, Sheet, Eroica and Lima to the north.

The local geology at Blanket Mine is depicted below including the infrastructure locations.

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The depiction of a cross section W-E through the orebody and No 4 Shaft infrastructure is shown below.

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The Longitudinal Section of Blanket Mine depicting Orebodies and Infrastructure is shown below.

Two main types of mineralisation are recognised at Blanket, namely DSR and quartz-filled reefs and shears. A third type of mineralisation may be evidenced in the form of auriferous sulphide minerals as a replacement of the iron-rich minerals along the hinges of the folds in BIF, as is present at the neighbouring Vubachikwe Mine.

Disseminated Sulphide Replacement Reefs

DSRs host the best grades and comprise the majority of the ore shoots. The zones have a silicified core with finely-disseminated arsenopyrite. Relatively high grades are found in a package of silicified biotite chlorite schist with irregular quartz stringers and disseminated and stringer arsenopyrite in the fabric planes. Due to lesser silicification, abundant biotite characterises the margins of these mineralised zones and as a result they have a lower gold content. Disseminated sulphide-replacement orebodies range up to 50 m in width with a strike of 60 m to 90 m. Free-milling gold constitutes up to 50% of the total metal content with the remainder locked in the arsenopyrite. The ore is not refractory despite its association with arsenopyrite. Generally, plant recoveries of 85% to 90% are achieved.

Quartz-Filled Reefs and Shears

Two quartz shears are mined at the Blanket Mine, namely the BQR and the Eroica Reef. These reefs have long strikes; however, they are not uniformly mineralised. Continuous pay shoots of over 100 m on strike are present. The Quartz Reef has a surface strike of approximately 500 m, but economic mineralisation is restricted to three 90 m long shoots.

Quartz-filled reefs display a much wider grade range compared to the DSR deposits. On average, these shears are of a higher grade and are used in blending the ore to the mill. Dominant ore minerals are native gold and galena although arsenopyrite becomes more prevalent below 470 m. Increasing levels of arsenopyrite association with depth confirm that the quartz shears represent higher level offshoots and splays with brittle deformation relative to the more ductile DSR-type core zone mineralised bodies.

Mineral Resource and Mineral Reserve Estimates

Mineral resource estimates were not included in the Company’s prior Form 20-F annual ,report as the SEC’s Industry Guide 7 (“IG7”) did not allow for the inclusion of mineral resources. The mineral resources reported here are updated from Blanket’s 2020 estimation of mineral resources as presented in other disclosures, taking depletion into account for the period 1 January 2020 until 31 December 2021. They do not account for any internal conversions in the same period as an internal update and conversion to digital methodology for the 2022 fiscal year is underway. Refer to Exhibit 15.4 or the technical report summary titled “S-K 1300 Technical Report Summary on the Blanket Gold Mine, Zimbabwe”, with an effective date of December 31, 2021, for key assumptions, parameters, and methods used to estimate the mineral resources and risks that could materially affect the mineral resource. Because this is the first year in which the Annual Report was permitted to present mineral resources, the Company has not included a tabular comparison of prior year versus current year mineral resources.

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The measured and indicated mineral resource estimates for 2021 are reported in compliance with Subpart 1300, in situ as at 31 December 2021 and exclusive of mineral reserves.

Mineral Resource | Orebody | Tonnes | Au | Content
Classification |  | t | g/t | Oz
| ARM | 85 823 | 2.31 | 6 383
| ARS | 219 056 | 3.10 | 20 392
| BF | 6 455 | 2.46 | 511
| BLK1 | 1 922 | 5.76 | 356
| BLK2 | 16 209 | 2.73 | 1 421
| BLK3 | 44 794 | 2.17 | 3 120
Measured | BLK4 | 1 502 | 4.75 | 230
| BLK6 | 1 751 | 2.92 | 165
| BQR | 108 753 | 2.57 | 8 988
| ERC | 7 104 | 3.93 | 898
| Jethro | 5 198 | 3.99 | 666
| Lima | 49 394 | 2.94 | 4 664
| Sheet | 5 989 | 3.40 | 654
Measured Total |  | 553 949 | 2.80 | 48 447
| ARM | 286 136 | 2.12 | 19 515
| ARS | 262 126 | 2.63 | 22 173
| BF | 14 119 | 1.74 | 790
| BLK1 | 106 991 | 2.52 | 8 668
| BLK2 | 95 915 | 2.95 | 9 102
| BLK3 | 109 187 | 2.55 | 8 948
Indicated | BLK4 | 12 507 | 2.63 | 1 057
| BLK6 | 20 748 | 2.85 | 1 903
| BQR | 327 854 | 2.98 | 31 439
| ERC | 224 200 | 3.35 | 24 159
| Jethro | 16 428 | 3.90 | 2 060
| Lima | 24 479 | 3.29 | 1 465
| Sheet | 84 310 | 3.87 | 10 477
Indicated Total |  | 1 585 001 | 2.78 | 141 757
M&I Total |  | 2 138 950 | 2.77 | 190 203

Notes:

| 1. | * Manual mineral resource estimate from block plans only

| 2. | Cut-off applied 1.5 g/t.

| 3. | No geological loss applied for measured, 5% for indicated and inferred.

| 4. | Commodity price utilised: USD1,600/oz.

| 5. | Mineral resources are stated exclusive of mineral reserves.

| 6. | Mineral resources are reported as 64% attributable to Caledonia.

| 7. | All orebodies are depleted for mining.

In Situ Inferred Mineral Resource Tabulation for Blanket Mine as at 31 December 2021 (exclusive of mineral reserves)

Mineral Resource | Orebody | Tonnes | Au | Content
Classifiaction |  | t | g/t | Oz
| ARM | 331 425 | 1.89 | 20 120
| ARS | 278 380 | 2.68 | 23 975
| BF | 297 519 | 2.60 | 24 836
| BLK1 | 879 307 | 2.64 | 74 747
| BLK2 | 974 983 | 4.05 | 126 908
Inferred | BLK3 | 412 612 | 3.36 | 44 637
| BLK6 | 252 085 | 2.95 | 23 899
| BQR | 1 500 405 | 3.20 | 154 499
| ERC | 313 242 | 3.71 | 37 351
| Lima | 178 869 | 3.73 | 21 478
Inferred Total | 5 418 826 | 3.17 | 552 450

Notes:

| 1. | Cut-off applied 1.5 g/t.

| 2. | No geological loss applied for measured, 5% for indicated and inferred.

| 3. | Commodity price utilised: USD1,600/oz.

| 4. | Mineral resources are stated exclusive of mineral reserves.

| 5. | Mineral resources are reported as 64% attributable to Caledonia.

| 6. | All orebodies are depleted for mining.

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Mineral reserves as reported in the Company’s prior Form 20-F annual report vary substantially to the mineral reserves reported herein as at 31 December 2021. The reasons for this are as follows:

| ● | 2020 reserves were reported in line with IG7 guidelines and were not Subpart 1300 compliant

| ● | 2020 reserves were given with an effective date of 1 January 2020

| ● | 2021 reserves are Subpart 1300 compliant and are thus reported at 64% attributable and as at 31 December 2021

Due to the lack of comparability, the Company has not included a tabular comparison of current year versus prior year mineral reserves.

Mineral reserve estimates in this Annual Report are reported in accordance with the requirements of Subpart 1300. Accordingly mineral resources in the measured and indicated categories have been converted to proven and probable mineral reserves respectively, by applying applicable modifying factors and are planned to be mined out under the life of mine plan within the period of our existing rights to mine, or within the time period of assured renewal periods of our rights to mine.

In addition, as of the date of this Annual Report, all mineral reserves are covered by required permits and governmental approvals.

Mineral Reserve Classification | Tonnes | Grade | Au Content
| kt | g/t | kg | oz
Proven | 656 | 3.11 | 2,042 | 65,651
Probable | 1,751 | 3.30 | 5,774 | 185,652
Total | 2,408 | 3.25 | 7,816 | 251,304

Notes:

| 1. | Mineral reserve cut-off of 2.1 g/t applied.

| 2. | The gold price that has been utilised in the economic analysis to convert diluted measured and indicated mineral resources in the LoMP to mineral reserves is an average real term price of USD1,622/oz over the LOMP, using the forecast prices as per economic analysis.

| 3. | The mineral reserve estimation utilises the depleted 2022 mineral resource estimation and the 2020 mine design and LoMP.

| 4. | Mineral reserves are reported as 64% attributable to Caledonia Mining Corporation Plc.

An uneconomical tail containing 25.90 koz of gold has been excluded from the mineral reserve, since it is not economical on its own.

The mineral reserves information is from Blanket’s current life-of-mine plan, using depletion for the period 1 January 2020 until 31 December 2021. They do not account for any internal conversions in the same period as an internal update and conversion to digital methodology for the 2022 fiscal year is underway. Refer to Exhibit 15.4 or the technical report summary titled “S-K 1300 Technical Report Summary on the Blanket Gold Mine, Zimbabwe”, with an effective date of December 31, 2021 for key assumptions, parameters, and methods used to estimate the mineral reserves and risks that could materially affect the potential development of the mineral reserves.

Our mineral reserve figures are estimates, which may not reflect actual reserves or future production. These figures are prepared in accordance with industry practice, converting mineral deposits to reserves through the preparation of a mining plan. The mineral reserve estimates contained herein inherently include a degree of uncertainty and depend to some extent on statistical inferences. Reserve estimates require revisions based on actual production experience or new information. Should we encounter mineralization or formations different from those predicted by past drilling, sampling and similar examinations, mineral reserve estimates may have to be adjusted and mining plans may have to be altered in a way that might adversely affect our operations. Moreover, if the price of gold declines, stabilizes at a price that is lower than break-even level, if our production costs increase or recovery rates decrease, it may become uneconomical to recover mineral reserves with lower grades of mineralization.

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Exploration and Planned Work

The Blanket Mine is a producing operation. Ordinarily, exploration activities are carried out both on and off the mine. Mine exploration takes place mostly underground on the producing claims and is aimed at expanding the lateral and depth extension of the known ore bodies which are being mined, as well as searching for potential additional orebodies. Available exploration platforms have been exhausted underground at Blanket Mine. Equipping the Central Shaft is expected to enable the establishment of new exploration platforms to be restored.

This drilling may confirm and improve the down-dip inferred mineral resource. An electromagnetic survey may be considered; potentially delineating additional surface structural features and targets, which can be used in conjunction with and refinement of the geological concept being proposed.

The combination of the exploration drilling, geophysical survey and conceptual geological model (based on the sampling database) may increase the exploration targets and ultimately assist in increasing the mineral resource.

No underground exploration drilling was budgeted for the year 2021 and 2020 on Blanket Mine due to the unavailability of drilling platforms, unlike in the year, 2019, when 9,824 metres were drilled. A total of 1,910 metres were drilled from surface at GG and Valentine satellite prospects.

Future exploration work will be focused primarily on the depth extensions of Blanket orebodies as per below. For the 2022 fiscal year this amounts to the establishment of drilling platforms and approximately 13,000 metres of core drilling amounting to $1.3million.

The appropriate QAQC procedures were applied to satisfy best practice guidelines including the use of blanks, standards and duplicates. These procedures with respect to sample preparation, analyses, security and data validation and verification are detailed in exhibit 15.4 titled “S-K 1300 Technical Report Summary on the Blanket Gold Mine, Zimbabwe”, with an effective date of December 31, 2021.

Maligreen Project

Property Description and Ownership

On September 23, 2021, Caledonia announced that it had entered into an agreement to purchase 100% ownership of mining claims over Maligreen, a property situated in the Gweru mining district in the Zimbabwe Midlands, for a total cash consideration of US$4 million. The claims were purchased to further explore and the exploration and evaluation asset is disclosed in note 14 of the Consolidated Financial Statements. No production activities have taken place while under the control of the Company. The Maligreen Project is a brownfield gold exploration project situated on the Nkayi-Silobela Greenstone Belt that has historically been exploited via open pit mining. The Maligreen property is envisioned as a combination open pit and underground operation. Appropriate work has to be completed to determine the extent and economic viability of an underground operation. This will be informed by future exploration drilling.

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The Project is located in central Zimbabwe, approximately 73 km due west-southwest of Kwekwe, Midlands Province. Zimbabwe's capital city, Harare, lies 235 km northeast of Maligreen. The town of Nkayi lies 25 km west of the Project along the Kwekwe-Lupane Highway. The location of the project is indicated below.

The Project is centred on the following coordinates:

| ● | Latitude 19°1'51"S

| ● | Longitude 29°6'5"E

The Maligreen project is held under a portfolio of 41 adjacent mining claims in the Midlands Mining District. Of these, 40 encompass an area of 10 ha each and are issued for gold. Claim AMT 97 (claim number 11219BM) encompasses 150 ha and is issued for copper. This latter claim has not been the focus of exploration to date. Should future exploration reveal substantial gold mineralisation, application will be made to include gold ore in the claim. The claims are all up to date, with next inspections due in 2022. The claims were all held in the name of Maligreen Mining Company (Pvt) Ltd, which entered into an Agreement of Sale with |CHZ on September 22, 2021 to acquire the claims.

The total land area of Maligreen is approximately 550 hectares comprising two historic open pit mining operations that produced approximately 20,000 ounces of gold mined from oxides between 2000 and 2002 after which the operation was closed. No exploration activities are currently active at the project, but the Company is planning to undertake additional exploration to fully understand the strike extension and depth extension potential.

History

The Maligreen deposit was discovered by Reunion Mining (Zimbabwe) Limited (“Reunion”) in October 1995 over a number of Exclusive Prospecting Orders. The property was purchased by Cluff Mineral Resources Limited (“Cluff”) in April 1998. In December 1999, Pan African (Pvt) Ltd (“Pan African”) entered into an agreement with Cluff to acquire a 50% interest in the Project. The acquisition was completed in April 2000 and a new joint-venture company MMC was registered (Trashliev, 2007).

As described by Trashliev (2007), four years of integrated regional geochemical and geophysical exploration led to the discovery of the Maligreen mineralisation by Reunion in 1995. A north-south, 3.3 km long geochemical signature along structural targets was identified. For the next two and a half years, Reunion drilled 107 diamond drillholes over 28,272 m and 526 percussion drillholes over 29,110 m, the results of which were utilised to define a gold mineral resource. Only the southern 1 km of the geochemical anomaly has been drilled. Limited geochemical data is however available. The area has been mapped and geological data relogged. No further exploration work was undertaken under Cluff ownership, but the company did revise the mineral resources to quantify the potential and guide mine planning.

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Work commenced in January 2000 under MMC ownership to develop two open pits (North Pit and South Pit; Figure 5 and Figure 6) to exploit the orebody. A crushing, sizing and floatation plant was also constructed. Pan African completed 35 reverse circulation (“RC”) drillholes over 1,038 m to guide mine planning at North Pit. The first bullion was poured in July 2000. All available data for the project area was consolidated in 2003 and all 107 diamond drillholes were relogged. Mining ceased in September 2002, but the reason for this is uncertain. It is however assumed that they were targeting the oxides only.

Present Condition and Infrastructure

Infrastructure on site is minimal. There are two open pits, namely North Pit and South Pit, that were historically mined, as well as the heap leach pad and possible elution room that serviced the operations. An office block is occupied and maintains the care and maintenance of the historic operation. A basic process plant is erected and utilised by the Syndicate for their mining activities. All required infrastructure for exploration activities is in place.

The Maligreen project is in the exploration phase and the area is accessible by car via the Kwekwe-Lupane Road, approximately 80 km west of Kwekwe. From this road, the Mahlathini Road can be taken southwards for some 3.8 km, from which point a westwards gravel road provides direct access to the project area after 1.8 km. The journey from Kwekwe takes approximately 2 hours by car.

Permitting, Licensing, and Encumbrances

The Maligreen mineral resource occurs within a claims area covering a total of 550 ha. The Project is held under a portfolio of 41 adjacent mining claims in the Midlands Mining District. Of these, 40 encompass an area of 10 ha each and are issued for gold. Claim AMT 97 (claim number 11219BM) encompasses 150 ha and is issued for copper. This latter claim has not been the focus of exploration to date. Should future exploration reveal substantial gold mineralisation, application will be made to include gold ore in the claim. The claims are all up to date, with next inspections due in 2022.

In 2022, an EIA and EMP will be devised as well as application made to convert the existing claims to a mining license.

Location of the existing claims are shown below.

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Geological Setting, Mineralization and Deposit

The Maligreen gold deposit occurs in a northeast trending section of greenstone near the convergence (triple junction) of the Midlands, Bubi and Silobela greenstone belts. The Maligreen deposit is hosted in rocks assigned to the Maliyami Formation of the Upper Bulawayan Group. The regional structural trend around Maligreen is northeast, parallel to the contact between the greenstone pile and the Shangani granite-gneiss terrain to the southeast.

The country rocks at Maligreen consists of metamorphosed andesitic pyroclastics (grading from lapilli tuff to agglomerate), intermediate lavas (dacite/andesite) and mafic lavas (basalt/gabbro). The pyroclastics are interbedded with quartz-eye-porphyry (or QEP) and intruded by feldspar porphyry (or FP) dykes. Andesitic volcanics are porphyritic and amygdaloidal in places. A mafic (or marker) dyke has intruded along the contact between pyroclastics and dacitic volcanics, within a broad shear zone. The strongly altered and sheared zone known as the quartz-sericite-zone (or QSZ), forms the core of deformation and alteration at Maligreen.

Gold mineralisation at Maligreen is generally associated with pyrite. Both stockwork and breccia pipe-type mineralisation have been recognized. The breccia type is very limited and consists of rock fragments cemented with silicates and ore minerals. Geological, petrological and structural studies suggest that the Maligreen gold deposit is a partially reworked porphyry style gold deposit. There is evidence of an early exhalative mineralisation within the Pyroclastic Unit. The possible mechanism for the Maligreen gold deposition is likely a fluid flow, aided and abetted by high level rhyolitic intrusions, and redistributed through permeable secondary shear zones due to late dextral duplex-like segmentation.

A generic stratigraphic column is depicted below.

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Based on previous work done on the deposit, as well as a detailed analysis of all the data available, a dominant north-south orientation is observed hosting mineralisation. These north-south mineralised trends are what has been mined in the existing surface pits. Additional mineralisation is seen trending northeast from these pits, in what has been termed the splays. Mineralisation at Maligreen is hosted by multiple lithologies, with specific lithologies dominant in different structural domains. An Indicator Interpolant function within Leapfrog was utilised to generate a grade halo showing all grades ≥0.2 g/t. This is believed to best represent the available data as well as enable an accurate representation of what is available for consideration in the mine plan.

The possible mechanism for the Maligreen gold deposition is likely a fluid flow, aided and abetted by high level rhyolitic intrusions, and redistributed through permeable secondary shear zones due to late dextral duplex-like segmentation.

A depiction of the mineralisation associated with a predominant North-South structure and associated splays is shown in plan and section for the North (A-A’) and South (B-B’) pits below.

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Mineral Resources Estimate

An ordinary kriged estimation was performed on the Maligreen deposit. Maligreen having been acquired in 2021 is a new including in this annual report.

Owing to the lack of confidence in the data due to not complying with latest QAQC best practice, only an inferred mineral resource was defined. The mineral resources reported at surface, which are all resources <220 m from surface and underground (>220 m from surface) are shown below. No mineral reserves are stated.

Surface inferred mineral resource for Maligreen project in situ as at December 31, 2021

Mineral Resource Category | Domain | Tonnes (Less Geological Loss) | Gold Grade | Gold Content
|  | Mt | g/t | koz
| North | 4.42 | 1.27 | 181.3
Inferred | South | 2.71 | 3.70 | 323.0
| SplayN | 4.31 | 0.84 | 116.8
| SplayS | 2.18 | 1.29 | 90.8
Total Inferred | 13.62 | 1.63 | 711.9

Notes:

| 1. | Mineral resource cut-off of 0.4 g/t Au applied.

| 2. | A gold price of USD1,800/oz was used for the cut-offs.

| 3. | Columns may not add up due to rounding.

| 4. | Mineral resources are reported as total mineral resources and 100% attributable to Caledonia.

Underground inferred mineral resource for Maligreen project in situ as at December 31, 2021

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Mineral Resource Category | Domain | Tonnes (Less Geological Loss) | Gold Grade | Gold Content
|  | Mt | g/t | koz
| North | 1.32 | 2.45 | 104.2
Inferred | South | 0.40 | 8.21 | 106.3
| SplayN | 0.21 | 2.30 | 15.3
| SplayS | 0.04 | 1.91 | 2.3
Total Inferred | 1.97 | 3.60 | 228.1

Notes:

| 1. | Mineral resource cut-off of 1.5 g/t Au applied.

| 2. | A gold price of USD1,800/oz was used for the cut-offs.

| 3. | Columns may not add up due to rounding.

| 4. | Mineral resources are reported as total mineral resources and 100% attributable to Caledonia.

Total inferred mineral resource for Maligreen project in situ as at December 31, 2021

Mineral Resource Category | Domain | Tonnes (Less Geological Loss) | Gold Grade | Gold Content
|  | Mt | g/t | koz
| North | 5.75 | 1.55 | 285.5
Inferred | South | 3.12 | 4.29 | 429.3
| SplayN | 4.51 | 0.91 | 132.1
| SplayS | 2.22 | 1.31 | 93.1
Total Inferred | 15.59 | 1.88 | 940.0

Notes:

| 1. | Mineral resource cut-off of 0.4 g/t Au for surface and 1.5 g/t Au for underground applied.

| 2. | A gold price of USD1,800/oz was used for the cut-offs.

| 3. | Columns may not add up due to rounding.

| 4. | Mineral resources are reported as total mineral resources and 100% attributable to Caledonia.

Sufficient data is available to define a weathering profile, lithological model, as well as estimate a mineral resource for the Maligreen deposit. Lack of QAQC during sampling and low confidence in the data due to the historical nature means that only an inferred mineral resource can be defined.

The model utilises grade trends determined in Seequent Leapfrog Geo software as well as structural geological interpretations and mapping. This has resulted in a fairly robust geological model on which to base a revised mineral resource estimation. Based on this new revised model and the quantity of historical drillhole data available, a conversion from inferred to measured and indicated mineral resource should be fairly cost effective. It is estimated that the budget required for this conversion is between USD1.5 million and USD2 million. This translates into a low USD/oz “discovery” or conversion rate, to measured and indicated mineral resources, estimated to be in the region of USD3/oz to USD5/oz.

The Maligreen project lends itself to open pit mining with low grade stockpiling with the possibility of underground mining beneath the open pit.

Limited historical metallurgical testwork suggests that the ore is not that refractory with metal recovery rates above 80%.

To take the Maligreen project closer to operational status the inferred mineral resource will be upgraded by applying QAQC best practice to available core and database followed by updating the resource estimation and then re-assessing in particular the exploration drilling for infill and confirmatory drilling along with a programme to determine strike and depth extents of the orebody.

Further, independent metallurgical test work will be undertaken.

Exploration and Planned Work

Exploration activities at Maligreen are focused on establishing a camp at the Maligreen site, as well as applying appropriate QAQC best practice by re-logging and sampling of borehole core which has been stored at a local coreyard. The aim of this project is to satisfy QP requirements to allow for conversion of the existing inferred resource to indicated and even measured categories where data allows and estimation conditions are met.

On completion of this work, a project revision will determine next steps and budget requirements for infill drilling as well as determining the depth and strike extension by further phased drilling.

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There are limitations to the QAQC performed during the drilling campaigns and concerns with respect to the results of the QAQC. QAQC procedures generally are a combination of blanks, CRMs and duplicates to verify the precision and accuracy of the sampling procedures and laboratory processes. In the case of the Maligreen Project not all these QAQC sample types were included and the ones that were did not show good correlation or the information was not available. This is one of the reasons that the data was deemed of sufficient quality for an inferred mineral resource classification only.

The QP completed data verification in terms of overlaps, gaps and location as much as possible. Any errors observed were rectified.

The data supplied is sufficient to generate a geological model. The percussion and diamond drillholes are of a sufficient quality and quantity to run a resource estimate over the project area. However due to the lack of QAQC and the use of the percussion drillholes, a maximum of inferred mineral resource will be defined over the project area.

Future work will be conducted in line with QAQC protocols as described in the Technical Report Summary for Blanket Mine, Exhibit 15.4.

ITEM 4A - UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 5 - OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following Operating and Financial Review and Prospects section is intended to help the reader understand the factors that have affected the Company's financial condition and results of operations for the historical period covered by the financial statements and management's assessment of factors and trends which are anticipated to have a material effect on the Company's financial condition and results in future periods. This section is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the other financial information contained elsewhere in this document. Our Consolidated Financial Statements have been prepared in accordance with IFRS. Our discussion contains forward-looking information based on current expectations that involve risks and uncertainties, such as our plans, objectives and intentions. Our actual results may differ from those indicated in such forward-looking statements.

A. Operating Results

The key drivers of our operating results and principal activities are:

| ● | revenue, which is influenced by:

| o | the price of gold, which fluctuates in terms of the realized USD gold price obtained; and
| o | our production tonnages and gold content thereof, impacting on the amount of gold we produce at our operation;

| ● | our cost of producing gold; and
| ● | other significant matters affecting profitability.

Revenue

Revenue increased to $121,329,000 in fiscal year 2021 from $100,002,000 in fiscal year 2020 (2019: $75,826,000). Gold produced was 67,476 oz. (2020: 57,899 oz.; 2019: 55,182). The increase in revenue was due to an increase in the average realized gold price received to $1,766 per oz. (2020: $1,749 per oz.; 2019: $1,382 per oz.) and increase in quantity of gold sold (see below).

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Gold price

Average realized gold price per ounce is a non-IFRS measure which management believes assists the stakeholders in understanding the average price obtained for an ounce of gold.

Our revenues are derived from the sale of gold produced by the Blanket Mine. As a result, our revenues are directly influenced by the average realized gold price obtained from the sale of gold. The gold prices obtained may fluctuate widely and are influenced by factors beyond the control of the Company. The table below indicates the average realized gold price per ounce obtained for the 2021, 2020 and 2019 fiscal years.

$’000 | 2019 | 2020 | 2021
Revenue (IFRS) | 75,826 | 100,002 | 121,329
Revenue from silver sales | (64) | (86) | (122)
Revenue from gold sales | 75,762 | 99,916 | 121,207
Gold ounces sold | 54,801 | 57,137 | 68,617
Average realized gold price per ounce | 1,382 | 1,749 | 1,766

Gold produced

Tonnes milled, average grades, recoveries and gold produced are shown in the table below.

Blanket Mine Production Statistics
| Year | Tonnes Milled (t) | Gold Head (Feed) Grade (g/t Au) | Gold Recovery (%) | Gold Produced (oz.)
Quarter 1 | 2019 | 122,389 | 3.26 | 93.4 | 11,948
Quarter 2 | 2019 | 136,262 | 3.11 | 93.2 | 12,712
Quarter 3 | 2019 | 142,706 | 3.19 | 93.2 | 13,646
Quarter 4 | 2019 | 155,389 | 3.61 | 93.8 | 16,876
Year | 2019 | 556,746 | 3.26 | 93.4 | 55,182
Quarter 1 | 2020 | 140,922 | 3.35 | 93.8 | 14,233
Quarter 2 | 2020 | 143,210 | 3.13 | 93.9 | 13,499
Quarter 3 | 2020 | 157,343 | 3.19 | 93.9 | 15,155
Quarter 4 | 2020 | 156,487 | 3.19 | 93.5 | 15,012
Year | 2020 | 597,962 | 3.21 | 93.8 | 57,899
Quarter 1 | 2021 | 148,513 | 2.98 | 93.0 | 13,197
Quarter 2 | 2021 | 165,760 | 3.34 | 93.8 | 16,710
Quarter 3 | 2021 | 179,577 | 3.48 | 94.2 | 18,965
Quarter 4 | 2021 | 171,778 | 3.57 | 94.3 | 18,604
Year | 2021 | 665,628 | 3.36 | 93.9 | 67,476

Ounces produced increased by 17% mostly due to the increased tonnes milled, higher recovery and higher grade. Tonnes milled in the year were 11% higher than 2020. Production for 2021 was a new record and exceeded the Company’s revised guidance for 2021.

Production in January and February was adversely affected by lower tonnes milled due to a delay in the installation of an additional mill because of COVID-19-related production delays at the manufacturer. The new mill is expected to be installed in the second quarter of 2022; in the meantime, unprocessed ore is being stockpiled.

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Production cost

Production cost includes salaries and wages, on mine administration, consumable materials and electricity and other related costs incurred in the production of gold. Production cost for 2021, 2020 and 2019 is summarized below.

$ ‘000 |  | 2019 |  |  | 2020 |  |  | 2021 |
Salaries and wages |  |  | 13,782 |  |  |  | 15,811 |  |  |  | 20,515 |
Consumable materials – Operations |  |  | 12,850 |  |  |  | 14,358 |  |  |  | 17,288 |
Consumable materials – COVID-19 |  |  | – |  |  |  | 824 |  |  |  | 297 |
Electricity costs |  |  | 6,319 |  |  |  | 8,071 |  |  |  | 10,363 |
Safety |  |  | 525 |  |  |  | 708 |  |  |  | 774 |
Cash-settled share-based expense (note 12.1(a)) |  |  | 107 |  |  |  | 634 |  |  |  | 692 |
Gold work in progress |  |  | 376 |  |  |  | 1,166 |  |  |  | 243 |
On mine administration |  |  | 2,140 |  |  |  | 1,766 |  |  |  | 2,650 |
Pre-feasibility exploration costs |  |  | 301 |  |  |  | 373 |  |  |  | 304 |
|  |  | 36,400 |  |  |  | 43,711 |  |  |  | 53,126 |

On-mine cost, all-in sustaining cost (“AISC”) and all-in cost per ounce

On-mine cost, AISC and all-in cost per ounce are non-IFRS cost measures which managements believes assist the stakeholders in understanding the cost structures of the Company. The table below reconciles production cost as stated in terms of IFRS to these cost measures.

A narrow focus on the direct costs of production (mainly labour, electricity and consumables) does not fully reflect the total cost of gold production. Accordingly, cost per ounce data for the fiscal year and previous fiscal years has been prepared in accordance with the Guidance Note issued by the World Gold Council on June 23, 2013 and is set out in the table below on the following bases:

| i. | On-mine cost per ounce, which shows the on-mine costs of producing an ounce of gold and includes direct labour, electricity, consumables and other costs that are incurred at the mine including insurance, security and on-mine administration;
| ii. | All-in sustaining cost (“AISC”) per ounce, which shows the on-mine cost per ounce plus royalty paid, additional costs incurred outside the mine (i.e. at offices in Harare, Johannesburg, London and Jersey), costs associated with maintaining the operating infrastructure and reserve base that are required to maintain production at the current levels (sustaining capital investment), the share-based expense (or credit) arising from the long-term incentive plan awards (the “LTIPs”) less silver by-product revenue. The all-in sustaining cost also includes as a credit (i.e. as a deduction from costs) any revenue from the gold support price (or its predecessor); and
| iii. | All-in cost per ounce, which shows AISC per ounce plus the additional costs associated with activities that are undertaken to increase production (expansion capital investment).

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($’000’s unless otherwise indicated) |  |  |  |  |  |  |  |  |  |  |  |
|  | 2019 |  |  | 2020 |  |  | 2021 |
Production cost (IFRS) |  |  | 36,400 |  |  |  | 43,711 |  |  |  | 53,126 |
Less exploration and site restoration costs |  |  | (826 | ) |  |  | (708 | ) |  |  | (774 | )
Cash-settled share-based payment expense - allocated to production cost |  |  | (107 | ) |  |  | (634 | ) |  |  | (692 | )
COVID-19 expenses included in operating cost |  |  | - |  |  |  | (1,038 | ) |  |  | (297 | )
Other cost |  |  | 212 |  |  |  | 1,201 |  |  |  | (453 | )
On-mine production cost* |  |  | 35,679 |  |  |  | 42,532 |  |  |  | 50,910 |
Gold sales (oz.) |  |  | 54,801 |  |  |  | 57,137 |  |  |  | 68,617 |
On-mine cost per ounce ($/oz.) |  |  | 651 |  |  |  | 744 |  |  |  | 742 |
Royalty |  |  | 3,854 |  |  |  | 5,007 |  |  |  | 6,083 |
ECI |  |  | (1,930 | ) |  |  | (4,695 | ) |  |  | - |
Exploration, remediation and permitting cost |  |  | 416 |  |  |  | 468 |  |  |  | 155 |
Sustaining capital development |  |  | 565 |  |  |  | 760 |  |  |  | 619 |
Administrative expenses |  |  | 5,637 |  |  |  | 7,997 |  |  |  | 9,091 |
Silver by-product credit |  |  | (64 | ) |  |  | (86 | ) |  |  | (122 | )
Cash-settled share-based payment expense |  |  | 689 |  |  |  | 1,413 |  |  |  | 477 |
Cash-settled share-based payments expense - allocated to production cost |  |  | 107 |  |  |  | 634 |  |  |  | 692 |
Procurement margin included in on-mine cost* |  |  | (2,400 | ) |  |  | (3,501 | ) |  |  | (2,401 | )
All in sustaining cost |  |  | 42,553 |  |  |  | 50,529 |  |  |  | 65,504 |
Gold sales (oz.) |  |  | 54,801 |  |  |  | 57,137 |  |  |  | 68,617 |
AISC per ounce ($/oz.) |  |  | 777 |  |  |  | 884 |  |  |  | 955 |
Solar expenses |  |  | 160 |  |  |  | 230 |  |  |  | - |
COVID-19 donations |  |  | - |  |  |  | 1,322 |  |  |  | 74 |
COVID-19 expenses |  |  | - |  |  |  | 1,038 |  |  |  | 297 |
Permitting and exploration expenses |  |  | 132 |  |  |  | 373 |  |  |  | 74 |
Non-sustaining capital expenses |  |  | 20,030 |  |  |  | 24,018 |  |  |  | 30,650 |
Total all in cost |  |  | 62,875 |  |  |  | 77,510 |  |  |  | 96,599 |
Gold sales (oz.) |  |  | 54,801 |  |  |  | 57,137 |  |  |  | 68,617 |
All-in cost per ounce ($/oz.) |  |  | 1,147 |  |  |  | 1,356 |  |  |  | 1,408 |

* | The on-mine cost reflects the cost incurred on-mine to produce gold. The procurement margin on consumable sales between Cledonia Mining South Africa Proprietary Limited (“CMSA”) and Blanket is not deducted from On-mine cost as the cost represent a fair value that Blanket would pay for consumables if they were sourced from a third party. The procurement margin on these sales is deducted from All-in sustaining costs and All-in costs as these numbers represent the consolidated costs at a group level excluding intercompany profit margins.

On-Mine cost

On-mine cost comprises labour, electricity, consumables and other costs such as security and insurance. Production costs are detailed in note 8 to the Consolidated Financial Statements. On-mine costs per ounce for the year were lower than the prior year due to the increased production which meant that fixed costs were spread over more production ounces and good control of costs that are subject to management control. On-mine costs in 2021 include $1.3 million and $2.9 million respectively of costs that are outside management control which include the effects of the collective wage negotiations on direct and indirect labour costs, increased cost of consumables and services that are denominated in local currency and higher than anticipated use of the diesel generators due to an increased incidence of power interruptions. On-mine costs include the procurement margin paid to CMSA on the grounds that this cost represents a fair value that Blanket would pay for consumables if they were sourced from a third party.

Wage negotiations in local currency (which take place every three or six months) reflect the very high rate of inflation in Zimbabwe but this is not compensated for by a reciprocal movement in the RTGS$/US$ exchange rate, which is managed by the RBZ. Thus, the higher RTGS$ wages that followed from the collective bargaining process result in substantially higher wages in US Dollar terms when translated at the official exchange rate. To avoid a repetition of this outcome, in late 2021, the remuneration of all Blanket’s employees was changed to 100% in US Dollars whereas previously it had been a combination of RTGS$ and US Dollars. Henceforth wage negotiations with Blanket employees will reference inflation in US Dollar terms which is expected to result in more subdued annual increases.

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The installation of a further auto-tap changer at the end of 2021 reduced the frequency of power interruptions resulting from power surges on the incoming grid power and has significantly reduced the generator use and diesel expense from January 2022.

On-mine cost per ounce for 2021 was within the guidance range of between $740 and $815 per ounce.

All-in sustaining cost

All-in sustaining cost for the year was 2.4% higher than 2020. The increase was due to the higher on-mine cost per ounce as discussed above, higher administrative costs and variations in the intercompany procurement margin. Refer below and to note 11 of the Consolidated Financial Statements for details on administrative expenses.

All-in cost

All-in cost includes investment in expansion projects which remained at a high level due to the continued investment at Blanket. All-in cost does not include pre-feasibility investment in exploration and evaluation projects.

Other significant matters affecting profitability

Administrative expenses

Administrative expenses increased by 14% from the previous year, principally due to increased higher wages and salaries because of an increased headcount in Johannesburg and London, higher bonus payments reflecting the strong performance of the business in 2021, and the outcome of a benchmarking exercise to align the Company’s performance payments with comparable companies.

Administrative expenses are further analyzed in note 11 of the Consolidated Financial Statements.

Other expenses

Other expenses increased by 34% in 2021 compared to 2020. Other expenditures in 2021 included $1,167,000 on CSR projects by Blanket (2020: $382,000), an impairment of $3,837,000 on the accumulated expenditure on the Glen Hume exploration project and an impairment of $761,000 on the outstanding amount due in respect of the sale of Eersteling. Additional expenses are detailed in note 10 to the Consolidated Financial Statements.

Foreign exchange gains

On October 1, 2018 the RBZ issued a directive to Zimbabwean banks to separate foreign currency from local currency on the accounts held by their clients and pegged the RTGS$ at 1:1 to the US Dollar. On February 20, 2019 the RBZ issued a further monetary policy statement, which allowed inter-bank trading between RTGS$ and foreign currency. The interbank rate was introduced at 2.5 RTGS$ to 1 US Dollar and traded at 108.67 RTGS$ to 1 US Dollar as at December 31, 2021 (December 31, 2020: 81.79 RTGS$). On June 24, 2019 the Government issued S.I. 142 which stated “RTGS$ is to be the sole currency for legal tender purposes for any transactions in Zimbabwe”. Throughout these announcements and to the date of issue of the Consolidated Financial Statements the US Dollar has remained the primary currency in which the Group’s Zimbabwean entities operate and the functional currency of these entities.

Previously there was uncertainty as to what currency would be used to settle amounts owed to the Zimbabwe Government. S.I. 142 clarified the Zimbabwean Government’s intentions that these liabilities were always denominated in RTGS$ and that RTGS$ would be the currency in which they would be settled. The devaluation of the deferred tax and electricity liabilities contributed the largest portion of the foreign exchange gain set out below. Further, the Company participated in the foreign currency auction introduced by the Zimbabwean Government to exchange RTGS$ for US Dollars during part of 2021 and accordingly obtained allotments from the RBZ.

In June 2021 the RBZ announced that companies that are listed on the VFEX will receive 100% of the revenue arising from incremental production in US Dollars. Blanket has subsequently received confirmation that the “baseline” level of production for the purposes of calculating incremental production is 148.38 Kg per month (approximately 57,000 ounces per annum). The payment of the increased US Dollars proceeds for incremental production was applied from July 1, 2021 and Blanket has received all amounts due in terms of this revised policy up to the date of approval of these financial statements. As Blanket intends to increase its production from approximately 58,000 ounces of gold in 2020 to 73,000 to 80,000 ounces of gold in 2022 and 80,000 ounces thereafter, the listing of depositary receipts representing Caledonia’s shares on the VFEX should mean that Blanket will receive approximately 71.5% of its total revenues in US Dollars and the balance in RTGS$ going forwards.

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The table below illustrates the effect that the weakening of the RTGS$ and other non-RTGS$ currencies had, against the US Dollar, on the statement of profit or loss and other comprehensive income.

|  | 2019 |  |  | 2020 |  |  | 2021 |
Unrealized Foreign exchange (loss)/gain |  |  | 31,411 |  |  |  | 8,367 |  |  |  | 2,755 |
Realised foreign exchange (loss) |  |  | (1,750 | ) |  |  | (4,062 | ) |  |  | (1,571 | )
Net foreign exchange (loss)/gain |  |  | 29,661 |  |  |  | 4,305 |  |  |  | 1,184 |

Gold Loan and Call Option

The Company received $3 million (less transaction costs) in the form of a gold loan and call option which will be repaid by two deliveries of 925 ounces of gold in May 2022 and June 2022 but which will be financially settled. In addition, the Company granted the lender call options over 6,000 ounces of gold at a strike price of $2,000 per ounce expiring monthly in equal tranches from June 30, 2022 to November 30, 2022. The proceeds of the gold loan will be used in part to fund the solar project. Refer to note 14.2 of the Consolidated Financial Statements for more information on the Gold Loan and Call option.

Gold ETF

In April 2020, the South African subsidiary, CMSA, purchased a Gold ETF through Standard Bank Limited, utilized to invest excess short-term Rands on hand at the South African subsidiary. On May 5, 2021 the Gold ETF was realized. Refer to note 14.1 of the Consolidated Financial Statements for more information on the Gold ETF.

Share-based payment awards

Certain management and employees within the Group are granted Restricted Share Units (“RSUs”) and Performance Units (”PUs”) pursuant to provisions of the 2015 Omnibus Equity Incentive Compensation Plan (“OEICP”). All RSUs and PUs were granted and approved at the discretion of the Compensation Committee of the Board of Directors.

RSUs vest three years after grant date given that the service condition of the relevant employees have been fulfilled. The value of the vested RSUs is the number of RSUs vested (which includes dividend reinvestments into further RSUs) multiplied by the fair market value of the Company’s shares, as specified by the OEICP, on the date of settlement.

PUs have a performance condition based on gold production and a performance period of three years, with most unitholders’ PUs vesting in equal tranches over each of the three years (whereas senior executives’ PUs all vest on the third anniversary). The number of PUs that vest will be the relevant PUs multiplied by the performance multiplier, which will reflect the actual performance in terms of the performance conditions compared to expectations on the date of the award.

RSU holders are entitled to receive dividends over the vesting period. Such dividends will be reinvested in additional RSUs at the then applicable share price. PUs have rights to dividends only after they have vested.

RSUs and PUs allow for settlement of the vesting date value in cash or shares issuable at fair market value or a combination of both at the discretion of the unitholder.

Refer to note 12.1 of the Consolidated Financial Statements for more information on the share-based payment awards.

During 2019 and 2021 a total of 17,585 RSUs and an aggregate of 373,979 PUs were awarded respectively to executives as well as to certain senior management and certain employees within the companies in the Group. On January 11, 2022, 226,739 PUs were granted to certain employees within the Group. An example of the award agreements are attached hereto as Exhibits 4.6, 4.7 and 4.8. Refer to note 12.1(a) of the Consolidated Financial Statement for a further analysis of cash-settled share-based payments granted and vested.

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Caledonia Mining South Africa employee incentive scheme

From July 2017, Caledonia Mining South Africa Proprietary Limited granted 52,282 awards respectively to certain of its employees that entitle them to a cash pay-out at the Company’s share price on November 30 each year over a 3-year period from the grant date. All awards were fully vested or terminated by November 30, 2021. No new awards were granted. Refer to note 12.1(b) of the Consolidated Financial Statements for more information on the awards.

Government grant – Gold sale export credit incentive

From May 2016 the RBZ announced an export credit incentive (“ECI”) on the gold proceeds received for all largescale gold producers. On January 1, 2018 the ECI decreased from 3.5% to 2.5%, on February 1, 2018 it increased to 10% and on March 10, 2020 it increased to 25%. All incentives granted by the Zimbabwean Government were included in other income when determined receivable. All receipts were received in Blanket Mine’s RTGS$ account. The ECI was cancelled after June 26, 2020. Refer to note 9 of the Consolidated Financial Statements for amounts received.

Adjusted earnings per share

“Adjusted earnings per share” is a Non-IFRS Measure which management believes assists investors in understanding the Company’s cash-based performance of core business activities. The table below reconciles “adjusted earnings per share” to the Profit/Loss attributable to Owners of the Company shown in the Consolidated Financial Statements which have been prepared under IFRS and adjusts for deferred tax and non-core business activities.

Subsequent events

Connemara North

On conclusion of management’s assessments it was decided not to exercise the option over the Connemara North claims as the results of the work indicated that the property does not meet Caledonia’s strategic objectives. The decision to not exercise the option will not have an impact on the Consolidated Financial Statements as the information required to make the decision was not available by December 31, 2021. The decision will impair the Exploration and evaluation assets and increase the impairment expense by $463,000 in the Condensed Consolidated Interim Financial Statements as at March 31, 2022.

Cap and collar hedge

On February 17, 2022 the Company entered into a zero cost contract by way of call options to hedge approximately 25% of 2022 target gold production at Blanket via a cap and collar hedge for 20,000 ounces of gold over a period of 5 months from March 2022 to July 2022. The hedging contract has a cap of $1,940 and a collar of $1,825 over 4,000 ounces of gold per month expiring at the end of each month over the 5-month period.

On March 9, 2022 in response to a very volatile gold price the Company purchased a matching quantity of call options at a strike price above the cap at a total cost of $796,000 over 4,000 ounces of gold per month at strike prices of $2,100 per ounce from March 2022 to May 2022 and $2,200 per ounce from June 2022 to July 2022 in order to limit margin exposure and reinstate gold price upside above the strike price.

The future impact of the hedges are undeterminable at the date of issue of this document and will be quantified in the Condensed Consolidated Interim Financial Statements as at March 31, 2022. Refer to note 14 and 41.1 of the Consolidated Financial Statements for more detail on the hedging agreements.

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Reconciliation of Adjusted Earnings per Share (“Adjusted EPS”) to IFRS Profit Attributable to Owners of the Company ($’000’s unless otherwise indicated) |
|  | 2019 |  |  | 2020 |  |  | 2021 |
Profit for the year (IFRS) |  |  | 50,401 |  |  |  | 25,257 |  |  |  | 23,142 |
Profit for the year attributable to non-controlling interests |  |  | (8,383 | ) |  |  | (4,477 | ) |  |  | (4,737 | )
Profit attributable to owners of the Company |  |  | 42,018 |  |  |  | 20,780 |  |  |  | 18,405 |
Blanket Mine Employee Trust adjustment |  |  | (986 | ) |  |  | (485 | ) |  |  | (326 | )
Earnings (IFRS) |  |  | 41,032 |  |  |  | 20,295 |  |  |  | 18,079 |
Weighted average shares in issue |  |  | 10,742 |  |  |  | 11,704 |  |  |  | 12,170 |
IFRS EPS (cents) |  |  | 382 |  |  |  | 173 |  |  |  | 149 |
Add back/(deduct) amounts in respect of foreign exchange gains and losses: |  |  |  |  |  |  |  |  |  |  |  |
Realised net foreign exchange losses |  |  | 1,648 |  |  |  | 4,062 |  |  |  | 1,571 |
- less tax |  |  | (414 | ) |  |  | (1,006 | ) |  |  | (381 | )
- less non-controlling interest |  |  | (198 | ) |  |  | (383 | ) |  |  | (153 | )
Unrealized net foreign exchange losses/(gains) |  |  | (31,309 | ) |  |  | (8,369 | ) |  |  | (2,755 | )
- less tax |  |  | 519 |  |  |  | 2,158 |  |  |  | 567 |
- less non-controlling interest |  |  | 5,000 |  |  |  | 836 |  |  |  | 270 |
Adjusted IFRS profit excl. foreign exchange |  |  | 16,278 |  |  |  | 17,593 |  |  |  | 17,198 |
Weighted average shares in issue |  |  | 10,742 |  |  |  | 11,704 |  |  |  | 12,170 |
Adjusted IFRS EPS excl foreign exchange (cents) |  |  | 152 |  |  |  | 150 |  |  |  | 141 |
Add back/(deduct) amounts in respect of: |  |  |  |  |  |  |  |  |  |  |  |
Reversal of Blanket Mine Employee Trust adjustment |  |  | 986 |  |  |  | 485 |  |  |  | 326 |
Impairment of property, plant and equipment |  |  | - |  |  |  | - |  |  |  | 497 |
Impairment of E&E assets |  |  | - |  |  |  | 2,930 |  |  |  | 3,837 |
Impairment of Eersteling receivable |  |  | - |  |  |  | - |  |  |  | 761 |
Deferred tax |  |  | 2,460 |  |  |  | 3,523 |  |  |  | 5,240 |
Deferred tax net of non-controlling interest |  |  | (477 | ) |  |  | (900 | ) |  |  | (602 | )
Hedge loss |  |  | 601 |  |  |  | 266 |  |  |  | 240 |
Equity-settled share-based expense |  |  | - |  |  |  | - |  |  |  | - |
Profit on sale of subsidiary |  |  | (4,409 | ) |  |  | - |  |  |  | - |
Adjusted profit |  |  | 15,439 |  |  |  | 23,897 |  |  |  | 27,497 |
Weighted average shares in issue (m) |  |  | 10,742 |  |  |  | 11,704 |  |  |  | 12,170 |
Adjusted EPS (cents) |  |  | 144 |  |  |  | 204 |  |  |  | 226 |

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B. Liquidity and Capital Resources

Cash and cash equivalents

$’000 |  | 2020 |  |  | 2021 |
Bank balances |  |  | 19,092 |  |  |  | 17,152 |
Cash and cash equivalents in the statements of financial position |  |  | 19,092 |  |  |  | 17,152 |
Bank overdraft used for cash management purposes |  |  | - |  |  |  | (887 | )
Cash and cash equivalents in the statements of cash flows |  |  | 19,092 |  |  |  | 16,265 |

Blanket Mine has arranged unsecured overdraft facilities with the following banks and terms.

Overdraft facilities |  |  |  |  |  | Interest rate |
Stanbic Bank – RTGS$ denomination |  |  | 112,000,000 |  |  |  | 32 | %
First Capital Bank – USD denomination |  |  | 1,000,000 |  |  |  | 10 | %

As at year end, Caledonia’s cash was held in the following jurisdictions:

$’000 |  | 2020 |  |  | 2021 |
Jersey, Channel Islands |  |  | 11,243 |  |  |  | 13,045 |
United Kingdom |  |  | 1 |  |  |  | 4 |
South Africa |  |  | 2,732 |  |  |  | 633 |
Zimbabwe (net of overdraft) |  |  | 5,116 |  |  |  | 2,583 |
Total |  |  | 19,092 |  |  |  | 16,265 |

An analysis of the sources and uses of Caledonia’s cash is set out in the Consolidated Statements of Cash Flows in the Consolidated Financial Statements.

As of December 31, 2021, Caledonia had a working capital surplus of $35,245,000 (2020: $34,622,000; 2019: $19,960,000). As of December 31, 2021, Caledonia had potential liabilities for rehabilitation work on Blanket (2021 and prior) – if and when those mines permanently close – at an estimated present value cost of $3,294,000 ($3,567,000; 2019: $3,346,000). The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern in order to pursue its mining operations and exploration activities.

The Company’s primary objective with respect to its capital management is to ensure that it has enough cash resources to maintain its ongoing operations, to provide returns for shareholders, complete the investment plan and accommodate any asset retirement obligation. Refer to note 33 of the Consolidated Financial Statements for information on the type of financial instruments used and the maturity profiles thereof. Management believes that the current working capital and future production cash proceeds will be enough to meet its capital requirements.

As at December 31, 2021, the Company had the following contractual obligations:

Payments due by Period $’000 |  | Less than 1 year |  |  | 1-3 years |  |  | 4-5 years |  |  | More than 5 years |
Trade and other payables |  |  | 9,957 |  |  |  | - |  |  |  | - |  |  |  | - |
Provisions |  |  | - |  |  |  | 500 |  |  |  | 685 |  |  |  | 2,109 |
Capital expenditure commitments |  |  | 3,493 |  |  |  | - |  |  |  | - |  |  |  | - |
Derivative financial liabilities |  |  | 3,095 |  |  |  | - |  |  |  | - |  |  |  | - |
Lease liabilities |  |  | 134 |  |  |  | 331 |  |  |  | - |  |  |  | - |
Cash-settled share-based payments |  |  | 2,053 |  |  |  | 974 |  |  |  | - |  |  |  | - |
Total |  |  | 18,732 |  |  |  | 1,805 |  |  |  | 685 |  |  |  | 2,109 |

Except for capital expenditure commitments, the contractual obligations in the table above are based on the classification requirements under IFRS.

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The capital expenditure commitments relate to materials and equipment which have been ordered by CMSA and which will be sold on to Blanket. In addition to the committed purchase obligations set out above:

● | Blanket currently intends to invest approximately $27 million in 2022; and
● | Caledonia intends to pay $10.2 million for the solar project in 2022.

Blanket foreign exchange approval requirements

Approval from the RBZ is required for the remittance of dividends declared from Zimbabwe, for the repayment of loans and advances from Blanket Mine to Caledonia and the repayment of capital and consumables purchased from CMSA. During 2021 Caledonia obtained the necessary approvals from the RBZ to obtain foreign currency to conduct normal business operations.

C. Research and development, patents and licenses, etc.

The Company is an exploration, development and mining company and does not carry on any research and development activities.

D. Trend Information

Production Guidance

Production for 2021 was 67,476 ounces, which was over the upper end of the revised guidance range of 65,000 to 67,000 ounces. Refer to Item 5.A – “Operating Results”, for further discussion and detail of actual production.

Production guidance for 2022 is between 73,000 and 80,000 ounces.

Cost Guidance

The estimated on-mine cost for 2021 was in the range of $740 to $815 per ounce and the estimated AISC for 2021 was a range of $985 to $1,080 per ounce. The actual on-mine cost per ounce for 2021 was $742 and actual AISC per ounce for 2021 was $990 – within the guidance range.

On-mine cost guidance for 2022 is in the range of $669 to $736 per ounce; guidance for AISC is $880 to $970 per ounce.

E. Critical Accounting Estimates

Not applicable.

ITEM 6 - DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

The following is a list of our current directors and the Group’s senior management as of May 17, 2022.

Name, Office Held and Municipality of Residence |  | Principal Occupations During Past Five Years |  | Company position(s) held Since |  | Number of Shares Beneficially Owned, Controlled or Directed as of May 17, 2022
Steven Curtis Chief Executive Officer & Director Johannesburg, South Africa |  | Chief Executive Officer and director over certain subsidiary companies. |  | Director since 2008 Chief Executive Officer since 2014 |  | 189,566

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Leigh Wilson Non-Executive Director & Chairman Stuart, Florida, USA |  | Chairman of the Victory Portfolios |  | Director since 2012 |  | 40,000
Nick Clarke Non-Executive Director East Molesey, United Kingdom |  | Chairman and former Chief Executive Officer of Central Asia Metals Plc. |  | Director since 2019 |  | Nil
John Kelly Non-Executive Director New Canan, Connecticut |  | Managing Partner of Active Capital Partners LLC (From January 2018) Independent Trustee, The Victory Funds (From February 2015). Non-Executive Member of CrossRoad LLC (From May 2009). Partner, McCarvill Capital Partners (September 2016 to September 2017). |  | Director since 2012 |  | 16,330
Johan Holtzhausen Non-Executive Director Cape Town, South Africa |  | Business consultant and Independent Director of DRDGOLD Limited. |  | Director since 2013 |  | 21,025
Dana Roets Chief Operating Officer Johannesburg, South Africa |  | Chief Operating Officer and director of the Company and certain subsidiary companies. |  | Chief Operating Officer since 2013 Director since 2022 |  | Nil
Mark Learmonth Chief Financial Officer & Director Jersey, Channel Islands |  | Chief Financial Officer and director of certain subsidiary companies. |  | Chief Financial Officer since 2014, Director since 2015 and formerly Vice-President, Business Development since 2008 |  | 168,262
Geralda Wildschutt Non-Executive Director Johannesburg, South Africa |  | Founder and CEO of Maisha Social Solutions Pty Ltd Board member of SAICA ED Pty Ltd Board member of The Hope Factory Trustee of the Anglo American Namibia Foundation Sustainability Consultant Gold Fields (2017, 2018) |  | Director since 2021 |  | Nil
Adam Chester General Counsel, Company Secretary and Head of Risk and Compliance Jersey, Channel Islands |  | Solicitor of the Supreme Court of England and Wales. Partner at Walkers and advocate of the Royal Court of Jersey. |  | General Counsel, Company Secretary and Head of Risk and Compliance since 2017 |  | 36,789
Caxton Mangezi Vice-president Zimbabwe operations Gwanda, Zimbabwe |  | Vice-president Zimbabwe operations |  | General Manager of Blanket Mine 1993-2021; Vice-president Zimbabwe operations since 2021 |  | Nil
Gordon Wylie Non-Executive Director Malta, Europe |  | Non-executive director of Chaarat Gold Holdings Limited, which is listed on AIM (symbol: CGH), and a non-executive director of Silverton Metals Corp., which is listed on TSX-V (symbol: SVTN). The former chairman of Lydian International Limited and a former non-executive director of Avocet Mining Plc. |  | Director since 2022 |  | Nil

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No family relationships exist between any of the Directors or senior management.

John McGloin resigned in February 2022 as a director.

A brief profile of each of the Directors and senior managers is given below:

Steven Curtis, CA (SA) – Director and Chief Executive Officer

Mr. Steven Roy Curtis is a Chartered Accountant with over 36 years of experience and has held a number of senior financial positions in the manufacturing industry. Before joining Caledonia in April 2006, he was Director Finance and Supply Chain for Avery Dennison SA and, prior to this, Financial Director and then Managing Director of Jackstadt GmbH South African operation. Mr. Curtis is a member of the South African Institute of Chartered Accountants and graduated from the University of Cape Town.

Mr. Curtis was appointed Vice-President Finance and Chief Financial Officer in April 2006 and served in the position until Dec 2014 when he was appointed as President and Chief Executive Officer.

Leigh Wilson - Non-Executive Director and Chairman

Mr. Leigh Alan Wilson has been a senior executive in international business and financial services and held positions with Union Bank of Switzerland (Securities) Ltd. in London and with the Paribas Group in Paris and New York where he served as CEO of Paribas North America between 1984 and 1990.

Mr. Wilson has served on the Board of Trustees of a mutual fund complex managed by Victory Capital Management since 1993. He currently serves as Independent Chairman of the Board.

The mutual fund complex is the largest client of Victory Capital Management high of Trustees of the mutual fund complex managed by Victory Capital Management, an independent investment management firm with total assets and advisement as of December 31, 2019 of $61.8 billion.

In March 2006, Mr. Wilson received the Mutual Fund Trustee of the Year Award from Institutional Investor Magazine. Between March 2008 and October 2008, Mr. Wilson was an independent non-executive director of the Company.

Mr. Wilson was re-appointed to the Caledonia board as an independent non-executive director in May 2012 and was appointed Chairman in May 2013.

Nick Clarke - Non-Executive Director

Mr. Nick Clarke joined the Company’s board as a Non-Executive Director on September 23, 2019. Mr. Clarke, who is Chairman of Central Asia Metals PLC (AIM: CAML), is a highly experienced Chartered Engineer (CEng) with 46 years in the mining industry. He has held senior positions in several resource companies and is well known as a successful executive in the sector having been involved in the construction of major mining projects and conducted several fundraisings on AIM and TSX.

He has an extensive background in managing AIM and TSX listed minerals companies including his current position as Chairman of Central Asia Metals PLC, where he was CEO from 2009 until 2016. Between 2004 and 2008 he was Managing Director of Oriel Resources plc (AIM: ORI) and from 2006 to 2008 he was President and CEO of Lero Gold Corporation (TSX: LER). Mr. Clarke has significant experience as a non-executive director of a number of AIM and TSX listed resource companies having previously held non-executive directorships on the boards of Afcan Mining Corp. (TSX: AFK), Caledon Resources plc (AIM: CDN), Obtala Resources plc (AIM: OBT), Columbus Copper Corp (TSX: CCU) and Sunkar Resources plc (AIM: SKR).

Mr. Clarke is an Associate of Camborne School of Mines (ACSM). He is a trustee of the Camborne School of Mines Trust and is a member of the Institution of Materials Minerals & Mining (MIMMM).

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John Kelly - Non-Executive Director

Mr. John Lawson Kelly has over 37 years of experience in the financial services industry in the U.S.A and international markets including emerging markets in Asia. Mr. Kelly is currently Managing Partner of Active Capital Partners LLC, an Independent Trustee of the Victory Funds and a non-executive Member of CrossRoad LLC. Within the last five years, Mr. Kelly has also been a partner of McCarvill Capital Partners and adviser to EndGate Commodities LLC. Mr. Kelly is a graduate of Yale University and the Yale School of Management.

Mr. Kelly was appointed to the Caledonia board as an independent non-executive director in May 2012.

Johan Holtzhausen - Non-Executive Director

Mr. Johan Andries Holtzhausen is a retired partner of KPMG South Africa with 42 years of audit experience, of which 36 years were as a partner focused on the mining sector. Mr. Holtzhausen chaired the Mining Interest Group at KPMG South Africa and his clients included major listed mining companies operating in Africa and elsewhere, which operated across a broad range of commodities. In addition to his professional qualifications, Mr. Holtzhausen holds a B.Sc. from the University of Stellenbosch, majoring in chemistry and geology.

Mr. Holtzhausen is chairman of the Audit and Risk Committees and a member of the Remuneration and Nomination Committee of DRD Gold Limited.

Dana Roets – Chief Operating Officer

Mr. Dana Roets is a qualified Mining Engineer and holds a B.Sc. Mining Engineering degree from Pretoria University (1986) and an MBA from the University of Cape Town (1995). Mr. Roets is a South African national with over 25 years of operational and managerial experience in the South African gold and platinum industries. He started his career with Gold Fields at the St Helena Gold Mine as a graduate trainee and progressed via various operational roles from being an underground shift boss to become Vice President and Head of Operations at Kloof Gold Mine in January 1999 at which time Kloof produced over 1,000,000 ounces of gold per annum. More recently, Mr. Roets was the COO at Great Basin Gold which had gold mining operations in the United States of America and South Africa.

Mr. Roets was appointed Caledonia’s Chief Operating Officer in 2013 and appointed to the Caledonia board in January 2022.

Mark Learmonth – Director and Chief Financial Officer

Mr. John Mark Learmonth joined Caledonia in July 2008. Prior to this, he was a Division Director of Investment Banking at Macquarie First South in South Africa and has over 17 years of experience in corporate finance and investment banking, predominantly in the resources sector. Mr. Learmonth graduated from Oxford University and is a chartered accountant. He is a member of the Executive Committee of the Chamber of Mines, Zimbabwe and is also a member of the Gold Producers Sub-Committee.

Mr. Learmonth was appointed Vice-President Finance, Chief Financial Officer of the Company in November 2014. Mr. Learmonth was responsible for Investor Relations and Corporate Development of the Company until the appointments of Mr. Maurice Mason (VP Corporate Development) and Mrs. Camilla Horsfall (VP Investor Relations) in 2016 and 2020, respectively.

Geralda Wildschutt – Non-Executive Director

Geralda has over 25 years’ experience in stakeholder engagement, corporate social responsibility, community development and social performance across mining, renewable energy, banking and the social sector. She has worked across Africa, Latin America, Australia and Canada.

In mining, she has been a consultant to Anglo American, Gold Fields, Ivanhoe Mines and South32 on a range of ESG topics. She has held senior positions at Anglo American, Gold Fields, ABSA/ Barclays Group and Ashoka: Innovators for the Public. Geralda hold a Masters degree in Psychology from the University of Cape Town, an MBA from the Business School of the Netherlands and a post-graduate Certificate in Cross-sector Partnerships from Cambridge University.

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Adam Chester – General Counsel, Company Secretary and Head of Risk and Compliance

In January 2017 Mr. Adam Chester joined the management team as General Counsel, Company Secretary and Head of Risk and Compliance. Mr. Chester is a dual qualified lawyer (England and Jersey, Channel Islands) and previously worked as a solicitor of the Supreme Court of England and Wales at international law firms in the City of London and, more recently, as an advocate of the Royal Court of Jersey at an international offshore law firm in which he was a partner. He has over 20 years’ experience advising businesses and individuals on a variety of commercial and corporate legal issues.

Caxton Mangezi – Vice-president Zimbabwe operations

Mr. Caxton Mangezi is a qualified miner and mine manager. He has worked at Blanket since 1969 in a range of roles including geological technician, overseer miner and underground manager.

Mr. Mangezi has been General Manager of Blanket Mine since 1993, with full responsibility for day-to-day operations. Mr. Mangezi was appointed as the Vice President Zimbabwe Operations during 2021. Mr. Mangezi also serves as director on certain Zimbabwean subsidiary companies.

Gordon Wylie – Non-Executive Director

Mr. Wylie holds a bachelor’s degree with Honours in Geology from the University of Glasgow, a Management Diploma from UNISA South Africa and a Postgraduate Diploma in Mining Engineering and Mineral Economics from Wits University, South Africa.

Mr. Wylie has over 46 years’ experience in the mining industry in both mining and exploration geology. Between 1997 and 2005, Mr Wylie was part of AngloGold Ashanti Limited’s senior management team where he was responsible for the company’s global exploration programs, mining geology and associated technical services, covering around 40 countries and 5 continents.

Since leaving AngloGold Ashanti, Gordon has accumulated 16 years’ board experience as a non- executive director, of which 12 were as chairman at Lydian International Limited. He is currently a non-executive director of Chaarat Gold Holdings Limited, which is listed on AIM (symbol: CGH), and a non-executive director of Silverton Metals Corp., which is listed on TSX-V (symbol: SVTN).

Arrangements, Understandings, etc.

Caledonia has no arrangements or understanding with any major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a director or member of senior management.

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B. Compensation

Summary Compensation Table

Name and principal position | Year | Salary ($) | Share-based awards ($)(1) | Option-based awards | Non‑equity incentive plan compensation ($) | Pension value ($) | All other compensation ($) | Total compensation ($)
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h)(2) (3) | (i)
|  |  |  |  | Annual incentive plans (1) | Long term incentive plans |  |  |
Steven Curtis Chief Executive Officer | 2021 2020 2019 | 517,525 470,478 459,900 | 127,836 380,477 200,391 | - - - | - - - | - - - | - - - | 240,000 235,239 70,000 | 885,362 1,086,194 730,291
Dana Roets Chief Operating Officer | 2021 2020 2019 | 489,590 445,082 442,602 | 80,564 239,641 128,217 | - - - | - - - | - - - | - - - | 170,000 222,541 65,000 | 740,154 907,263 662,292
Mark Learmonth Chief Financial Officer | 2021 2020 2019 | 480,011 436,373 433,942 | 89,645 231,660 163,350 | - - - | - - - | - - - | - - - | 235,000 218,187 65,000 | 804,656 886,220 662,292
Caxton Mangezi General Manager and Director of the Blanket Mine | 2021 2020 2019 | 429,478 374,817 450,377 | 123,250 294,512 107,050 | - - - | - - - | - - - | - - - | 263,180 187,409 63,771 | 815,908 856,738 621,198
Adam Chester General Counsel, Company Secretary and Head of Risk and Compliance | 2021 2020 2019 | 316,996 286,952 281,744 | 119,103 133,840 73,046 | - - - | - - - | - - - | - - - | 158,498 38,510 29,773 | 594,597 459,302 384,563

(1) | Awards are considered to be share based awards. The amounts stated are the expenses for the year to revalue the liability to the amount that is expected to vest at the applicable year end. Refer to table below for the awards outstanding as at December 31, 2021.
(2) | The amounts shown in (h) relate to bonuses paid to NEOs. No fees for acting as a Director were paid to NEOs.
(3) | The amounts shown in (h) for Steve Curtis, Dana Roets, Mark Learmonth and Caxton Mangezi relates to bonuses provided for in 2021, but were only paid in January 2022.

Non-executive director fees were paid in equal quarterly instalments in arrears during 2021. From January 1, 2021 to December 31, 2021 the approved non-executive director fees amounted to $90,000 p.a. payable to each non-executive director other than Mrs. Geralda Wildschutt who received a pro-rata amount of $76,936 for her services in 2021.

Long term incentive plan

The following key management members were granted RSUs and PUs, pursuant to the provisions of the OEICP. The outstanding RSUs and PUs as at December 31, 2021 were as follows:

Key management member | Vesting date | RSUs | PUs
Steve Curtis | 2022/01/11 2023/01/11 2024/01/11 | - - - | 44,309 16,547 8,769
Dana Roets | 2022/01/11 2023/01/11 2024/01/11 | - - | 27,898 10,436 5,530
Mark Learmonth | 2022/01/11 2023/01/11 2024/01/11 | - - | 28,287 10,231 5,422
Caxton Mangezi | 2022/01/11 2023/01/11 2024/01/11 | 17,971 - | 23,533 8,788 4,657
Adam Chester | 2022/01/11 2023/01/11 2024/01/11 | - - | 13,692 7,103 3,509
Total |  | 17,971 | 218,711

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For further detail on the RSUs and PUs refer to note 12.1 (a) of the Consolidated Financial Statements.

No director equity options were outstanding at December 31, 2021.

Caledonia does not have a pension, retirement or similar benefits scheme for directors.

C. Board Practices

The directors all hold their positions for an indefinite term, subject to re-election at each annual general meeting of the shareholders. The officers hold their positions subject to being removed by resolution of the board of directors. The term of office of each director expires as of the date that an annual general meeting of the shareholders is held, subject to the re-election of a director at such annual general meeting. The following persons comprise the following committees:

Audit | Compensation | Governance | Nomination | Disclosure
J Holtzhausen | L Wilson | L Wilson | L Wilson | M Learmonth
J Kelly | J Kelly | J Kelly | J Holtzhausen | S Curtis
G Wildschutt | J Holtzhausen | G Wildschutt | N Clarke | D Roets
|  |  | J Kelly | C Horsfall
|  |  | G Wildschutt | A Chester
|  |  | G Wylie |
Technical | Strategic Planning | ESG |  |
J Holtzhausen | L Wilson | L Wilson |  |
D Roets | J Kelly | J Kelly |  |
S Curtis | S Curtis | S Curtis |  |
N Clarke | M Learmonth | D Roets |  |
G Wylie | D Roets | G Wildschutt |  |
| J Holtzhausen | A Chester |  |
| M Mason | C Horsfall |  |
| N Clarke |  |  |
| G Wildschutt |  |  |
| G Wylie |  |  |

The Audit Committee is comprised of the following directors: (i) Johan Holtzhausen (Chairperson), (ii) John Kelly, and (iii) Geralda Wildschutt. Each member of the Audit Committee is considered independent as defined under Canadian National Instrument 52-110 and as defined pursuant to Section 803 of the NYSE American LLC Company Guide (as such definition may be modified or supplemented) and considered to be financially literate as such terms are defined under Canadian National Instrument 52-110 Audit Committees.

The purpose of the Audit Committee is to discharge the Board’s responsibilities relating to:

1. | Opening an avenue of communication between Caledonia’s management, the independent auditors and the Board and to assist the Board in its oversight of the:

| ● | integrity, adequacy and timeliness of Caledonia’s financial reporting and disclosure practices;

| ● | processes for identifying the principal financial risks of Caledonia and the control systems in place to monitor them;

| ● | compliance with legal and regulatory requirements related to financial reporting;

| ● | independence and performance of the independent auditors;

| ● | processes implemented by management to ensure effective internal controls over financial reporting;

| ● | enterprise risk management;

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| ● | fraud risks related to financial reporting;

| ● | risks related to financial reporting; and

| ● | integrated reporting.

2. | Performing any other activities consistent with the charter of the Audit Committee to ensure that Caledonia’s articles of association, governing and regulatory laws as required by the SEC, Sarbanes-Oxley Act and NYSE American LLC and AIM requirements are monitored by management.

3. | The role of oversight. The financial statements are the responsibility of management. The Auditors are responsible for performing an audit and expressing an opinion on the fair presentation of Caledonia’s financial statements in accordance with IFRS.

4. | Ensuring that a combined assurance model is developed and implemented to provide a co-ordinated approach to all assurance activities.

The purpose of the Compensation Committee is to discharge the Board’s responsibilities relating to:

1. | Compensation of the Corporation’s executive officers and the directors of the Corporation;

2. | Establishment and administration of policies, programs and procedures for compensating and incentivising its executive officers;

3. | Oversight of the compensation structure and benefit plans and programs of the Corporation; and

4. | Executive compensation disclosure and compliance with the Executive Compensation Policy.

Terms of reference of the Audit Committee are given in the charter of the Audit Committee, and the terms of reference of the Compensation Committee are given in the charter of the Compensation Committee. All charters of committees are available on the Company’s website (www.caledoniamining.com) or, on request, from the Company’s offices listed in this report.

Benefits upon termination are disclosed in note 36 of the Consolidated Financial Statements and an example contract is disclosed in Exhibit 4.2.

D. Employees

The average, approximate number of employees, their categories and geographic locations for each of the last 3 years are summarized in the table below:

Geographic Location and Number of Employees:

Employee Location |  | 2019 |  |  | 2020 |  |  | 2021 |
Total Employees |  |  |  |  |  |  |  |  |  |  |  |
London, United Kingdom - Management and administration |  |  | 1 |  |  |  | 2 |  |  |  | 2 |
Jersey, Channel Islands - Management and administration |  |  | 3 |  |  |  | 3 |  |  |  | 3 |
South Africa - Management, procurement, administration and technical |  |  | 13 |  |  |  | 16 |  |  |  | 21 |
Zimbabwe - Mine operations (i) |  |  | 1,569 |  |  |  | 1,697 |  |  |  | 1,923 |
Total Employees at all Locations |  |  | 1,586 |  |  |  | 1,718 |  |  |  | 1,949 |

Management and Administration:

Employee Locations: |  | 2019 |  |  | 2020 |  |  | 2021 |
London, United Kingdom - Management and administration |  |  | 1 |  |  |  | 2 |  |  |  | 2 |
Jersey, Channel Islands - Management and administration |  |  | 3 |  |  |  | 3 |  |  |  | 3 |
Zimbabwe - Mine operations |  |  | 44 |  |  |  | 46 |  |  |  | 55 |
South Africa - Management, procurement, administration and technical |  |  | 12 |  |  |  | 15 |  |  |  | 20 |
Total Management and Administration |  |  | 60 |  |  |  | 66 |  |  |  | 80 |

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E. Share Ownership

(a) The direct and indirect shareholdings of the Company’s directors, officers and senior management as at May 17, 2022 were as follows:

|  | Number of shares |  |  | Percentage share holding |
L Wilson |  |  | 40,000 |  |  |  | 0.31 | %
S Curtis |  |  | 189,566 |  |  |  | 1.48 | %
M Learmonth |  |  | 168,262 |  |  |  | 1.31 | %
J Kelly |  |  | 16,330 |  |  |  | 0.13 | %
J Holtzhausen |  |  | 21,025 |  |  |  | 0.16 | %
A Chester |  |  | 36,789 |  |  |  | 0.29 | %
N Clarke |  |  | - |  |  |  | 0.00 | %
D Roets |  |  | - |  |  |  | 0.00 | %
G Wildschutt |  |  | - |  |  |  | 0.00 | %
C Mangezi |  |  | - |  |  |  | 0.00 | %
G Wylie |  |  | - |  |  |  | 0.00 | %
Total |  |  | 471,972 |  |  |  | 3.68 | %

Refer to Item 6.A for a list of the Company’s directors, officers and senior management and number of shares held.

All of the shares held above are voting shares and do not have any different voting or other rights than the other outstanding shares of the Company.

The information as to shares beneficially owned or controlled or directed, not being within the knowledge of the Company, has been furnished by the respective directors, officers and senior management members individually.

(b) | Share purchase options outstanding as of May 17, 2022:

Name |  |  | Exercise Price CAD |  | Expiry Date |  | Number of Options |
P Chidley | Advisor |  |  | *9.30 |  | August 25, 2024 |  |  | 5,000 |
P Durham | Advisor |  |  | *9.30 |  | August 25, 2024 |  |  | 5,000 |
TOTAL |  |  |  |  |  |  |  | 10,000 |

*The exercise price of CAD$9.30 per share was converted into a USD amount of $7.35 at the prevailing USD/CAD exchange rate at the date of grant (August 25, 2017).

In terms of the OEICP, the expiry of the options that expire in a closed period will be extended by 10 days from the cessation of the closed period.

ITEM 7 - MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

To the best of Caledonia's knowledge, as at May 17, 2022, we are aware of the following beneficial owners that directly or indirectly exercise control or direction over more than 5% of the voting rights to our shares.

Beneficial owner name |  | 2019 |  |  | 2020 |  |  | 2021 |
| Number of Shares Held |  |  | Percentage of Issued Shares |  |  | Number of Shares Held |  |  | Percentage of Issued Shares |  |  | Number of Shares Held |  |  | Percentage of Issued Shares |
Allan Gray (through two of its funds) |  |  | 2,070,348 |  |  |  | 17.98 | % |  |  | 1,957,391 |  |  |  | 16.15 | % |  |  | 1,957,391 |  |  |  | 15.34 | %
Sales promotion Services S.A./ Heinrich Auwärter |  |  | 848,773 |  |  |  | 7.37 | % |  |  | 663,773 |  |  |  | 5.48 | % |  |  | 663,773 |  |  |  | 5.20 | %
Fremiro Investments (Private) Limited |  |  | 727,266 |  |  |  | 6.32 | % |  |  | 727,266 |  |  |  | 6.00 | % |  |  | 727,266 |  |  |  | 5.70 | %
TD Ameritrade |  |  | 884,647 |  |  |  | 7.68 | % |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |

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All shareholders have the same voting rights as all other shareholders of Caledonia.

According to our share register and information received from our registrar on May 4, 2022 the shares of Caledonia (including those represented by depositary interests) were held in the following geographic locations:

Geographic Location based on the share register only |  | Number of Shares Held |  |  | Percentage of Issued Shares |
United Kingdom |  |  | 4,294 |  |  |  | 0.03 | %
USA |  |  | 11,471,117 |  |  |  | 89.39 | %
Canada |  |  | 4,819 |  |  |  | 0.04 | %
Zimbabwe |  |  | 1,347,996 |  |  |  | 10.50 | %
Other |  |  | 4,900 |  |  |  | 0.04 | %
|  |  | 12,833,126 |  |  |  | 100 | %

12,833,126 shares of the Company, as on May 4, 2022, are held by a total of 80 registered shareholders.

Caledonia is not aware of any arrangement which may at some subsequent date result in a change of control of Caledonia.

B. Related Party Transactions

No related party transactions exist, other than disclosed in note 36 of the Consolidated Financial Statements.

C. Interests of Experts and Counsel

Not applicable.

ITEM 8 - FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information

This Annual Report contains the audited Consolidated Financial Statements which comprise the consolidated statements of financial position as at December 31, 2021 and December 31, 2020 and the related consolidated statements of profit or loss and other comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows for the years ended December 31, 2021, December 31, 2020 and December 31, 2019.

Reference is made to the Consolidated Financial Statements that are filed as part of this Annual Report on pages F1 – F67

Legal Proceedings and Regulatory Actions

To our knowledge, there are no legal proceedings material to us to which we are or were a party to or of which any of our properties are or were the subject of during the financial year ended December 31, 2021 nor are there any such proceedings known to us to be contemplated which would materially impact our financial position or ability to continue as a going concern.

During the twelve months ended December 31, 2021, there were no (i) penalties or sanctions imposed against us by a court relating to securities legislation or by a securities regulatory authority; (ii) penalties or sanctions imposed by a court or regulatory body against us that would likely be considered important to a reasonable investor in making an investment decision, or (iii) settlement agreements we entered into before a court relating to securities legislation or with a securities regulatory authority.

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Dividend policy

From 2014, the Company has paid a quarterly dividend (payable at the end of January, April, July and October each year, except for the dividend expected to be paid in April 2020 which was delayed by a month due to uncertainties related to the COVID-19 pandemic). The quarterly dividend declared was 6.875 cents per share in 2019 and was increased on several dates during 2020 and 2021 as set out below:

Declaration date | cents per share
January 10, 2019 | 6.875
April 11, 2019 | 6.875
July 11, 2019 | 6.875
October 10, 2019 | 6.875
January 16, 2020 | 7.5
May 14, 2020 | 7.5
July 16, 2020 | 8.5
October 15, 2020 | 10.0
January 14, 2021 | 11.0
April 15, 2021 | 12.00
July 15, 2021 | 13.00
October 14, 2021 | 14.00
January 13, 2022 | 14.00
April 4, 2022 | 14.00

B. Significant Changes

We have not experienced any significant changes since the date of the Consolidated Financial Statements included with this Annual Report except as disclosed in this Annual Report.

ITEM 9 - THE OFFERING AND LISTING

A. Offering and Listing Details

The Company’s shares trade on the NYSE American, AIM (in the form of depositary interests) and VFEX (in the form of depositary receipts) under the trading symbol “CMCL”. Caledonia voluntary delisted its shares from the TSX on June 19, 2020. After the delisting the Company remains a Canadian reporting issuer and has to comply with Canadian securities laws unless and until it can demonstrate that less than 2% of its beneficial shareholders are Canadian residents.

B. Plan of Distribution

Not applicable.

C. Markets

The Company’s shares trade on the NYSE American, AIM (in the form of depositary interests) and VFEX (in the form of depositary receipts) under the trading symbol “CMCL”. Caledonia voluntary delisted its shares from the TSX on June 19, 2020. After the delisting the Company remains a Canadian reporting issuer and has to comply with Canadian securities laws unless and until it can demonstrate that less than 2% of its beneficial shareholders are Canadian residents.

D. Selling Shareholders

Not applicable.

E. Dilution

Not applicable.

F. Expenses of the Issue

Not applicable.

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ITEM 10 - ADDITIONAL INFORMATION

A. Share Capital

Not applicable.

B. Memorandum and Articles of Association

Securities Registrar

Computershare Inc. is the transfer agent and registrar for the shares at its principal office in Massachusetts. Computershare Investor Services PLC at its principal office in Bristol, United Kingdom is the transfer agent for the depositary interests.

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Director’s power to vote on a proposal, arrangement or contract in which the director is materially interested.

An interested director must disclose to the Company the nature and extent of any interest in a transaction with the Company, or one of its subsidiaries, which to a material extent conflicts or may conflict with its interests and of which the director is aware. Failure to disclose an interest entitles the Company or a shareholder to apply to the court for an order setting aside the transaction concerned and directing that the director account to the Company for any profit.

A transaction is not voidable and a director is not accountable notwithstanding a failure to disclose an interest if the transaction is confirmed by special resolution and the nature and extent of the director’s interest in the transaction are disclosed in reasonable detail in the notice calling the meeting at which the resolution is passed.

Although it may still order that a director account for any profit, a court will not set aside a transaction unless it is satisfied that the interests of third parties who have acted in good faith would not thereby be unfairly prejudiced and the transaction was not reasonable and fair in the Company’s interests at the time it was entered into.

Except as otherwise provided in the Articles (as defined below) and save in respect of a limited number of instances as set out in the Articles, a director shall not vote on, or be counted in the quorum in relation to, any resolution of the board or of a committee of the board concerning any matter in which he has to his knowledge, directly or indirectly, an interest (other than his interest in shares or debentures or other securities of, or otherwise in or through, the Company) or duty which (together with any interest of a person connected with him) is material and, if he shall do so, his vote shall not be counted.

Directors’ power, in the absence of an independent quorum, to vote compensation to themselves or any members of their body.

The compensation of the directors is decided by the directors unless the board of directors specifically requests approval of the compensation from the shareholders. If the issuance of compensation to the directors is decided by the directors, a quorum is the majority of the directors in office. The Articles do not require that the compensation of any director be approved by disinterested directors.

The Company has a compensation committee that is currently composed of three independent directors. The compensation committee makes recommendations to the board with respect to compensation, including bonuses, incentive stock options and securities of directors and executive officers.

Borrowing powers exercisable by the directors and how such borrowing powers may be varied.

The board may exercise all the Company’s powers to borrow money, to guarantee, to indemnify and to mortgage or charge all or any part of the Company’s undertaking, property and assets (present and future) and uncalled capital and, subject to the Companies Law to issue debentures and other securities, whether outright or as collateral security, for any debt, liability or obligation of the Company or of any third party.

The board shall restrict the Company’s borrowings and exercise all voting and other rights or powers of control exercisable by the Company in relation to its subsidiary undertakings (if any) to secure (but as regards subsidiary undertakings only in so far as by the exercise of such rights or powers of control the board can secure) that the aggregate principal amount from time to time outstanding of all borrowings by the Company’s group (exclusive of borrowings owing by one member of the Company’s group to another member of the Company’s group) shall not at any time without the previous sanction of an ordinary resolution of the Company exceed an amount equal to three times the Adjusted Capital and Reserves (as defined in the Articles). The borrowing powers may be varied by amendment to the Articles which requires approval of the Company’s shareholders by special resolution, being a resolution passed by at least 2/3 majority of the votes cast on the resolution.

Retirement and non-retirement of directors under an age limit requirement.

There are no such provisions applicable to the Company under the Articles or the Companies Law.

Number of shares required for a director’s qualification.

Under the Articles, the directors are not required to hold any shares as qualification for service on the board.

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Place of Incorporation and Purpose

The Company was incorporated, effective February 5, 1992, by the amalgamation of three predecessor companies. It was registered in terms of the Canada Business Corporations Act. The company re-domiciled to Jersey, Channel Islands, effective March 19, 2016 through the Continuance process. The Continuance had no appreciable effect on the Company’s listing in Toronto, the admission of its depositary interests to trading on AIM in London or the trading facility on the OTCQX (from July 27, 2017 the OTCQX trading ceased and shares commenced trading on NYSE American) and the Company’s securities continued to be traded on these listing and trading platforms after the Continuance process was completed. Caledonia voluntary delisted its shares from the TSX on June 19, 2020.

Neither the Company’s memorandum of association nor the Articles stipulate any objects or purposes of the Company and no objects or purposes are required to be stated by the Companies Law.

Articles of Association

At a special meeting of shareholders held on February 18, 2016, Caledonia’s shareholders voted in favor of a resolution to approve the Continuance. This resolution, inter alia, included provisions to replace Caledonia’s by-laws with new articles of association (the “Articles”). The Articles do not place any restrictions on the Company’s business.

The holders of the shares are entitled to one vote per share at all meetings of the shareholders of the Company. The holders of shares are also entitled to dividends, if and when declared, and the distribution of the residual assets of the Company in the event of a liquidation, dissolution or winding up of the Company. The Company's shares do not have pre-emptive rights to purchase additional shares.

No preference shares are currently issued and outstanding. Preference shares may be issued from time to time in one or more series composed of such number of shares with such preference, deferred or other special rights, privileges, restrictions and conditions as specified in the Articles or as fixed before such issuance by a resolution passed by the directors and confirmed and declared by shareholders by a special resolution. The preference shares shall be entitled to preference over shares in respect of the payment of dividends and shall have priority over other shares in the event of a distribution of residual assets of the Company in the event of a liquidation, dissolution or winding up of the Company. The rights attaching to the shares or the preference shares can only be modified by the affirmative vote of at least two-thirds of the votes cast at a meeting of the relevant shareholders called for that purpose.

Meetings of Shareholders

The Articles require the Company to call an annual general meeting of shareholders within 13 months after holding the last preceding annual general meeting and permits the Company to call any other meeting of shareholders at any time. The Company is required to mail a notice of meeting and management information circular to registered shareholders not less than 21 clear days and not more than 60 days prior to the date of any annual or other general meeting of shareholders, although it currently utilizes the notice and access method under Canadian law. These materials must also be filed with Canadian securities regulatory authorities. The Articles provide that a quorum of two shareholders in person or represented by proxy holding or representing by proxy not less than 5% of the Company’s issued shares carrying the right to vote at the meeting is required to transact business at a general meeting. Shareholders, and their duly appointed proxies and corporate representatives, as well as the Company's auditors, are entitled to be admitted to the Company's annual and other general meetings of shareholders.

Limitations on the Right to Own Securities

There are no limitations on the rights to own securities in the Company.

Limitations on Restructuring

There is no provision in the Articles that would have the effect of placing any limitations on any corporate restructuring in addition to what would otherwise be required by applicable law.

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Disclosure of Share Ownership

The Articles permit the Company to give a disclosure notice to any person that the Company has reasonable cause to believe is/was interested in the Company’s shares within the preceding three years; such notice may require the person to inform the Company whether that person holds/has held an interest in the Company’s shares. The Articles also incorporate by reference certain of the disclosure guidance and transparency rules (“DTR”) published by the UK's Financial Conduct Authority. The DTR include, inter alia, a requirement that a shareholder must notify the Company of the percentage of its voting rights (held directly and indirectly) if the percentage of those voting rights reaches, exceeds or falls below 3% of the Company’s issued voting securities and each 1% threshold above 3%.

Differences in Corporate Law between United States (Delaware) and Jersey, Channel Islands

Set forth below is a comparison of certain shareholder rights and corporate governance matters under Delaware law and Jersey law:

Corporate Law Issue |  | Delaware Law |  | Jersey Law
Special Meetings of Shareholders |  | Shareholders generally do not have the right to call meetings of shareholders unless that right is granted in the certificate of incorporation or by-laws. However, if a corporation fails to hold its annual meeting within a period of 30 days after the date designated for the annual meeting, or if no date has been designated for a period of 13 months after its last annual meeting, the Delaware Court of Chancery may order a meeting to be held upon the application of a shareholder. |  | Shareholders holding 10% or more of the company’s voting rights and entitled to vote at the relevant meeting may legally require directors to call a meeting of shareholders. Under the Articles, the percentage required to requisition a meeting is reduced to 5%. The Jersey Financial Services Commission, or JFSC, may, at the request of any officer, secretary or shareholder, call or direct the calling of an annual general meeting. Failure to call an annual general meeting in accordance with the requirements of the Companies Law is a criminal offense on the part of a Jersey company and its directors and secretary.
Interested Director Transactions |  | Interested director transactions are permissible and may not be legally voided if: • either a majority of disinterested directors, or a majority in interest of holders of shares of the corporation’s capital stock entitled to vote upon the matter, approves the transaction upon disclosure of all material facts; or • the transaction is determined to have been fair as to the corporation as of the time it is authorized, approved or ratified by the board of directors, a committee thereof or the shareholders. |  | An interested director must disclose to the company the nature and extent of any interest in a transaction with the company, or one of its subsidiaries, which to a material extent conflicts or may conflict with the interests of the company and of which the director is aware. Failure to disclose an interest entitles the company or a shareholder to apply to the court for an order setting aside the transaction concerned and directing that the director account to the company for any profit. A transaction is not voidable and a director is not accountable notwithstanding a failure to disclose an interest if the transaction is confirmed by special resolution and the nature and extent of the director’s interest in the transaction are disclosed in reasonable detail in the notice calling the meeting at which the resolution is passed. Although it may still order that a director account for any profit, a court will not set aside a transaction unless it is satisfied that the interests of third parties who have acted in good faith would not thereby be unfairly prejudiced and the transaction was not reasonable and fair in the interests of the company at the time it was entered into. The Articles set out a limited number of transactions and matters in which a director may be interested and in which he may vote and be counted in the quorum in relation to a resolution on the matter.

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Cumulative Voting |  | The certificate of incorporation of a Delaware corporation may provide that shareholders of any class or classes or of any series may vote cumulatively either at all elections or at elections under specified circumstances. |  | There are no provisions in the Companies Law relating to cumulative voting.
Approval of Corporate Matters by Written Consent |  | Unless otherwise specified in a corporation’s certificate of incorporation, shareholders may take action permitted to be taken at an annual or special meeting, without a meeting, notice or a vote, if consents, in writing, setting forth the action, are signed by shareholders with not less than the minimum number of votes that would be necessary to authorize the action at a meeting. All consents must be dated and are only effective if the requisite signatures are collected within 60 days of the earliest dated consent delivered. |  | If permitted by the articles of association of a company, a written consent signed and passed by the specified majority of members may affect any matter that otherwise may be brought before a shareholders’ meeting, except for the removal of a company’s auditors. Such consent shall be deemed effective when the instrument, or the last of several instruments, is signed by the specified majority of members or on such later date as is specified in the resolution. The Articles do not contain provisions regarding shareholder resolutions in writing.
Business Combinations |  | With certain exceptions, a merger, consolidation or sale of all or substantially all of the assets of a Delaware corporation must be approved by the board of directors and a majority of the outstanding shares entitled to vote thereon. |  | A sale or disposal of all or substantially all the assets of a Jersey company must be approved by the board of directors and, only if the articles of association of the company require, by the shareholders in general meeting. A merger involving a Jersey company must be generally documented in a merger agreement which must be approved by special resolution of that company.
Limitations on Director’s Liability and Indemnification of Directors and Officers |  | A Delaware corporation may indemnify a director or officer of the corporation against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in defense of an action, suit or proceeding by reason of his or her position if (i) the director or officer acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and (ii) with respect to any criminal action or proceeding, the director or officer had no reasonable cause to believe his or her conduct was unlawful. |  | The Companies Law does not contain any provision permitting Jersey companies to limit the liabilities of directors for breach of fiduciary duty. However, a Jersey company may exempt from liability, and indemnify directors and officers, for liabilities: • incurred in defending any civil or criminal legal proceedings where: - the person is either acquitted or receives a judgment in their favor; - where the proceedings are discontinued other than by reason of such person (or someone on their behalf) giving some benefit or suffering some detriment; or - where the proceedings are settled on terms that such person (or someone on their behalf) gives some benefit or suffers some detriment but in the opinion of a majority of the disinterested directors, the person was substantially successful on the merits in the person’s resistance to the proceedings; • incurred to anyone other than to the company if the person acted in good faith with a view to the best interests of the company; • incurred in connection with an application made to the court for relief from liability for negligence, default, breach of duty or breach of trust under Article 212 of the Companies Law in which relief is granted to the person by the court; or • incurred in a case in which the company normally maintains insurance for persons other than directors.

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Appraisal Rights |  | A shareholder of a Delaware corporation participating in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights under which the shareholder may receive cash in the amount of the fair value of the shares held by that shareholder (as determined by a court) in lieu of the consideration the shareholder would otherwise receive in the transaction. |  | There are no appraisal rights under the Companies Law but the Articles include dissent rights of shareholders, based on Canadian law, whereby shareholders who dissent to certain transactions of the Company may apply to have the Company buy their shares for fair value.
Shareholder Suits |  | Class actions and derivative actions generally are available to the shareholders of a Delaware corporation for, among other things, breach of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In such actions, the court has discretion to permit the winning party to recover attorneys’ fees incurred in connection with such action. |  | Under Article 141 of the Companies Law, a shareholder may apply to court for relief on the ground that the conduct of a company’s affairs, including a proposed or actual act or omission by a company, is “unfairly prejudicial” to the interests of shareholders generally or of some part of shareholders, including at least the shareholder making the application. There may also be customary law personal actions available to shareholders. Under Article 143 of the Companies Law (which sets out the types of relief a court may grant in relation to an action brought under Article 141 of the Companies Law), the court may make an order regulating the affairs of a company, requiring a company to refrain from doing or continuing to do an act complained of, authorizing civil proceedings and providing for the purchase of shares by a company or by any of its other shareholders.

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Inspection of Books and Records |  | All shareholders of a Delaware corporation have the right, upon written demand, to inspect or obtain copies of the corporation’s shares ledger and its other books and records for any purpose reasonably related to such person’s interest as a shareholder. |  | The register of shareholders and books containing the minutes of general meetings or of meetings of any class of shareholders of a Jersey company must during business hours be open to the inspection of a shareholder of the company without charge. The register of directors and secretaries must during business hours (subject to such reasonable restrictions as the company may by its articles of association or in general meeting impose, but so that not less than two hours in each business day be allowed for inspection) be open to the inspection of a shareholder or director of the company without charge.
Amendments to Charter |  | Amendments to the certificate of incorporation of a Delaware corporation require the affirmative vote of the holders of a majority of the outstanding shares entitled to vote thereon or such greater vote as is provided for in the certificate of incorporation. A provision in the certificate of incorporation requiring the vote of a greater number or proportion of the directors or of the holders of any class of shares than is required by Delaware corporate law may not be amended, altered or repealed except by such greater vote. |  | The memorandum of association and the articles of association of a Jersey company may only be amended by special resolution (being a two-thirds majority if the articles of association of the company do not specify a greater majority) passed by shareholders in general meeting or by written resolution signed by all the shareholders entitled to vote.
Blank Check Preferred Stock/Shares |  | Under Delaware law, the certificate of incorporation of a corporation may give the board the right to issue new classes of preferred shares with voting, conversion, dividend distribution, and other rights to be determined by the board at the time of issuance, which could prevent a takeover attempt and thereby preclude shareholders from realizing a potential premium over the market value of their shares. In addition, Delaware law does not prohibit a corporation from adopting a shareholder rights plan, or “poison pill,” which could prevent a takeover attempt and also preclude shareholders from realizing a potential premium over the market value of their shares. |  | The UK’s Takeover Code requires a target company shareholders' consent in general meeting before the target company can take any action (other than seeking alternative bids) that may result in the frustration of a takeover bid. Moreover, the Takeover Code provides that the board of directors of an offeree company must act in the interests of the company as a whole and must not deny the holders of securities the opportunity to decide on the merits of a takeover bid.

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Distributions and Dividends; Repurchases and Redemptions |  | Under Delaware law, subject to any restrictions contained in the certificate of incorporation, a corporation may pay dividends out of capital surplus or, if there is no surplus, out of net profits for the current and/or the preceding fiscal year in which the dividend is declared, as long as the amount of capital of the corporation following the declaration and payment of the dividend is not less than the aggregate amount of the capital represented by issued and outstanding shares having a preference upon the distribution of assets. Surplus is defined in Delaware law as the excess of the net assets over capital, as such capital may be adjusted by the board. A Delaware corporation may purchase or redeem shares of any class except when its capital is impaired or would be impaired by the purchase or redemption, and it may not purchase, for more than the price at which they may be redeemed, any of its shares which are redeemable at the option of the corporation. A corporation may, however, purchase or redeem out of capital shares that are entitled upon any distribution of its assets to a preference over another class or series of its shares if the shares are to be retired and the capital reduced. |  | Under the Companies Law, a Jersey company may make a distribution at any time and out of any source provided that the directors of the company who authorize the distribution make an immediate and 12 month forward looking cash-flow solvency statement. Likewise, authorizing directors must also make a solvency statement in the event of redeeming or purchasing the company’s shares. The Companies Law allows a Jersey company to purchase its own shares, whether they are redeemable or not, provided that the purchase is sanctioned by a special resolution. The monies payable on the redemption of redeemable shares or on the purchase of its own shares by a Jersey company may be funded from any source, including capital, provided that such shares are fully paid. If shares are to be purchased other than on a stock exchange, they may only be purchased pursuant to a contract approved in advance by an ordinary resolution of the company and they shall not carry the right to vote on the resolution sanctioning the purchase or approving the contract. If shares are to be purchased on a stock exchange, the resolution authorizing the purchase must specify the maximum number of shares to be purchased; the maximum and minimum prices which may be paid; and the date (not being later than 5 years after the passing of the resolution) on which the authority to purchase is to expire.

C. Material Contracts

Not applicable.

D. Exchange Controls

There are no governmental laws, decrees or regulations existing in Jersey, Channel Islands, which restrict the export or import of capital, or the remittance of dividends, interest or other payments to non-resident holders of Caledonia's securities, nor does Jersey, Channel Islands have foreign exchange currency controls. Exchange control approvals from the RBZ and the Reserve Bank of South Africa are required on the flow of funds in and out of Zimbabwe and South Africa; Caledonia obtained the necessary approvals from the RBZ and the Reserve Bank of South Africa to transfer foreign currency during 2021.

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E. | Taxation

Certain United States Federal Income Tax Considerations

The following is a general summary of certain material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the acquisition, ownership, and disposition of shares. This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder arising from and relating to the acquisition, ownership, and disposition of shares. In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to such U.S. Holder, including without limitation specific tax consequences to a U.S. Holder under an applicable tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder. This summary does not address the U.S. federal net investment income, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences to U.S. Holders of the acquisition, ownership, and disposition of shares. In addition, except as specifically set forth below, this summary does not discuss applicable tax reporting requirements. Each prospective U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. federal net investment income, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition, ownership, and disposition of shares. No legal opinion from U.S. legal counsel or ruling from the Internal Revenue Service (the “IRS”) has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the acquisition, ownership, and disposition of shares. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary. In addition, because the authorities on which this summary are based is subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the conclusions described in this summary.

Scope of this Summary

Authorities

This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations (whether final, temporary, or proposed), published rulings of the IRS, published administrative positions of the IRS, and U.S. court decisions that are applicable and, in each case, as in effect and available, as of the date of this document. Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied on a retroactive or prospective basis which could affect the U.S. federal income tax considerations described in this summary. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on a retroactive, current or prospective basis.

U.S. Holders

For purposes of this summary, the term "U.S. Holder" means a beneficial owner of shares that is for U.S. federal income tax purposes:

| ● | an individual who is a citizen or resident of the U.S.;
| ● | a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the U.S., any state thereof or the District of Columbia;
| ● | an estate whose income is subject to U.S. federal income taxation regardless of its source; or
| ● | a trust that (1) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed

This summary does not address the U.S. federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the Code, including, but not limited to, the following U.S. Holders that: (a) are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) are financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; (c) are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-market accounting method; (d) have a “functional currency” other than the USD; (e) own shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other integrated transaction; (f) acquired shares in connection with the exercise of employee stock options or otherwise as compensation for services; (g) hold shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); (h) are subject to taxing jurisdictions other than, or in addition to, the United States; (i) are partnerships and other pass-through entities (and investors in such partnerships and entities); (j) are S corporations (and shareholders or investors in such S corporations); (k) own, have owned or will own (directly, indirectly, or by attribution) 10% or more of the total combined voting power or value of the outstanding shares of the Company; (l) U.S. expatriates or former long-term residents of the U.S., or (m) are subject to special tax accounting rules with respect to shares. U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S. Holders described immediately above, should consult their own tax advisor regarding the U.S. federal, U.S. federal net investment income, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition, ownership and disposition of shares.

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If an entity or arrangement that is classified as a partnership (or other “pass-through” entity) for U.S. federal income tax purposes holds shares, the U.S. federal income tax consequences to such entity and the partners (or other owners) of such entity generally will depend on the activities of the entity and the status of such partners (or owners). This summary does not address the tax consequences to any such owner. Partners (or other owners) of entities or arrangements that are classified as partnerships or as “pass-through” entities for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences arising from and relating to the acquisition, ownership, and disposition of shares.

Ownership and Disposition of shares

The following discussion is subject to the rules described below under the heading “Passive Foreign Investment Company Rules”.

Taxation of Distributions

A U.S. Holder that receives a distribution, including a constructive distribution, with respect to a share will be required to include the amount of such distribution in gross income as a dividend (without reduction for any foreign income tax withheld from such distribution) to the extent of the current or accumulated “earnings and profits” of the Company, as computed for U.S. federal income tax purposes. To the extent that a distribution exceeds the current and accumulated “earnings and profits” of the Company, such distribution will be treated first as a tax-free return of capital to the extent of a U.S. Holder's tax basis in the shares and thereafter as gain from the sale or exchange of such shares (see “Sale or Other Taxable Disposition of shares” below). However, the Company may not maintain the calculations of its earnings and profits in accordance with U.S. federal income tax principles, and each U.S. Holder may have to assume that any distribution by the Company with respect to the shares will constitute ordinary dividend income. Dividends received on shares by corporate U.S. Holders generally will not be eligible for the “dividends received deduction”. Subject to applicable limitations and provided the shares are readily tradable on a United States securities market, dividends paid by the Company to non-corporate U.S. Holders, including individuals, generally will be eligible for the preferential tax rates applicable to long-term capital gains for dividends, provided certain holding period and other conditions are satisfied, including that the Company not be classified as a PFIC (as defined below) in the tax year of distribution or in the preceding tax year. The dividend rules are complex, and each U.S. Holder should consult its own tax advisor regarding the application of such rules.

Sale or Other Taxable Disposition of Shares

A U.S. Holder will generally recognize gain or loss on the sale or other taxable disposition of shares in an amount equal to the difference, if any, between (a) the amount of cash plus the fair market value of any property received and (b) such U.S. Holder’s tax basis in such shares sold or otherwise disposed of. Any such gain or loss generally will be capital gain or loss, which will be long-term capital gain or loss if, at the time of the sale or other disposition, such shares are held for more than one year.

Preferential tax rates apply to long-term capital gains of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax rates for long-term capital gains of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations under the Code.

Passive Foreign Investment Company (“PFIC”) Rules

If the Company were to constitute a PFIC for any year during a U.S. Holder’s holding period, then certain potentially adverse rules would affect the U.S. federal income tax consequences to a U.S. Holder resulting from the acquisition, ownership and disposition of shares. The Company believes that it was not a PFIC for the tax year ended December 31, 2021 No opinion of legal counsel or ruling from the IRS concerning the status of the Company as a PFIC has been obtained or is currently planned to be requested. However, PFIC classification is fundamentally factual in nature, generally cannot be determined until the close of the tax year in question and is determined annually. Additionally, the analysis depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. Consequently, there can be no assurance that the Company has never been and will not become a PFIC for any tax year during which U.S. Holders hold shares.

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In addition, in any year in which the Company is classified as a PFIC, a U.S. Holder will be required to file an annual report with the IRS containing such information as Treasury Regulations and/or other IRS guidance may require. A failure to satisfy such reporting requirements may result in an extension of the time period during which the IRS can assess a tax. U.S. Holders should consult their own tax advisors regarding the requirements of filing such information returns under these rules, including the requirement to file an IRS Form 8621 annually.

The Company generally will be a PFIC under Section 1297 of the Code if, after the application of certain “look-through” rules with respect to subsidiaries in which the Company holds at least 25% of the value of such subsidiary, for a tax year, (a) 75% or more of the gross income of the Company for such tax year is passive income (the “income test”) or (b) 50% or more of the value of the Company’s assets either produce passive income or are held for the production of passive income (the “asset test”), based on the quarterly average of the fair market value of such assets. “Gross income” generally includes all sales revenues less the cost of goods sold, plus income from investments and incidental or outside operations or sources, and “passive income” generally includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions. Active business gains arising from the sale of commodities generally are excluded from passive income if substantially all of a foreign corporation’s commodities are stock in trade or inventory, depreciable property used in a trade or business or supplies regularly used or consumed in the ordinary course of its trade or business, and certain other requirements are satisfied.

If the Company were a PFIC in any tax year during which a U.S. Holder held shares, such holder generally would be subject to special rules with respect to “excess distributions” made by the Company on the shares and with respect to gain from the disposition of shares. An “excess distribution” generally is defined as the excess of distributions with respect to the shares received by a U.S Holder in any tax year over 125% of the average annual distributions such U.S. Holder has received from the Company during the shorter of the three preceding tax years, or such U.S. Holder’s holding period for the shares. Generally, a U.S. Holder would be required to allocate any excess distribution or gain from the disposition of the shares ratably over its holding period for the shares. Such amounts allocated to the year of the disposition or excess distribution would be taxed as ordinary income, and amounts allocated to prior tax years would be taxed as ordinary income at the highest tax rate in effect for each such year and an interest charge at a rate applicable to underpayments of tax would apply.

While there are U.S. federal income tax elections that sometimes can be made to mitigate these adverse tax consequences (including the “QEF Election” under Section 1295 of the Code and the “Mark-to-Market Election” under Section 1296 of the Code), such elections are available in limited circumstances and must be made in a timely manner.

U.S. Holders should be aware that, for each tax year, if any, that the Company is a PFIC, the Company can provide no assurances that it will satisfy the record-keeping requirements of a PFIC, or that it will make available to U.S. Holders the information such U.S. Holders require to make a QEF Election with respect to the Company or any subsidiary that also is classified as a PFIC.

Certain additional adverse rules may apply with respect to a U.S. Holder if the Company is a PFIC, regardless of whether the U.S. Holder makes a QEF Election. These rules include special rules that apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC. Subject to these special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. U.S. Holders should consult their own tax advisors regarding the potential application of the PFIC rules to the ownership and disposition of shares, and the availability of certain U.S. tax elections under the PFIC rules.

Additional Considerations

Receipt of Foreign Currency

The amount of any distribution paid to a U.S. Holder in foreign currency, or payment received on the sale, exchange or other taxable disposition of shares, generally will be equal to the USD value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether such foreign currency is converted into USD at that time). A U.S. Holder will have a basis in the foreign currency equal to its USD value on the date of receipt. Any U.S. Holder who converts or otherwise disposes of the foreign currency after the date of receipt may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes. Different rules apply to U.S. Holders who use the accrual method with respect to foreign currency received upon the sale, exchange or other taxable disposition of the shares. Each U.S. Holder should consult its own U.S. tax advisor regarding the U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.

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Foreign Tax Credit

Subject to the PFIC rules discussed above, a U.S. Holder that pays (whether directly or through withholding) foreign income tax with respect to dividends paid on the shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such foreign income tax. Generally, a credit will reduce a U.S. Holder’s U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder’s income subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year. The foreign tax credit rules are complex and involve the application of rules that depend on a U.S. Holder’s particular circumstances. Each U.S. Holder should consult its own U.S. tax advisor regarding the foreign tax credit rules.

Backup Withholding and Information Reporting

Under U.S. federal income tax law and Treasury Regulations, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on individuals who are U.S. Holders that hold certain specified foreign financial assets in excess of certain threshold amounts. The definition of specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person and any interest in a foreign entity. U.S. Holders may be subject to these reporting requirements unless their shares are held in an account at certain financial institutions. Penalties for failure to file certain of these information returns are substantial. U.S. Holders should consult their own tax advisors regarding the requirements of filing information returns, including the requirement to file an IRS Form 8938.

Payments made within the U.S. or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, shares will generally be subject to information reporting and backup withholding tax, at the rate of 24%, if a U.S. Holder (a) fails to furnish such U.S. Holder’s correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, certain exempt persons generally are excluded from these information reporting and backup withholding rules. Backup withholding is not an additional tax. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder’s U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner.

The discussion of reporting requirements set forth above is not intended to constitute a complete description of all reporting requirements that may apply to a U.S. Holder. A failure to satisfy certain reporting requirements may result in an extension of the time period during which the IRS can assess a tax, and under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsatisfied reporting requirement. Each U.S. Holder should consult its own tax advisor regarding the information reporting and backup withholding rules.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

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H. Documents on Display

Any statement in this Annual Report about any of our contracts or other documents is not necessarily complete. If the contract or document is filed as an exhibit to this Annual Report, the contract or document is deemed to modify the description contained in this Annual Report. Readers must review the exhibits themselves for a complete description of the contract or document.

We are subject to the informational requirements of the U.S. Exchange Act and file reports and other information with the SEC. The SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC at http://www.sec.gov.

We are required to file reports and other information with the securities commissions in Canada. You are invited to read and copy any reports, statements or other information, other than confidential filings, that we file with the provincial securities commissions. These filings are also electronically available from the Canadian System for Electronic Document Analysis and Retrieval ("SEDAR") (www.sedar.com), the Canadian equivalent of the SEC's electronic document gathering and retrieval system.

Copies of our material contracts are kept at our registered office.

I. Subsidiary Information

Not applicable.

ITEM 11 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed in varying degrees to a variety of financial instrument related risks by virtue of its activities. The overall financial risk management program focuses on preservation of capital and protecting current and future Company assets and cash flows by reducing exposure to risks posed by the uncertainties and volatilities of financial markets.

The board of directors of the Company has a responsibility to ensure that an adequate financial risk management policy is established and to approve the policy. The Company’s Audit Committee oversees management’s compliance with the Company’s financial risk management policy.

The fair value of the Company’s financial instruments approximates their carrying value unless otherwise noted. The types of risk exposure and the way in which such exposures are managed are as follows:

A. Currency Risk

The Group is exposed to currency risk to the extent that there is a mismatch between the currency that it transacts in and the functional currency. The results of the Group’s operations are subject to currency transaction risk and currency translation risk. The operating results and financial position of the Group are reported in USD in the Consolidated Financial Statements.

The availability of foreign exchange and the fluctuation of the USD in relation to other currencies that entities, within the Group, may transact in will consequently have an impact upon the profitability of the Group and may also affect the value of the Group’s assets and liabilities. As noted below, the Group has certain financial assets and liabilities denominated in currencies other than the functional currency of the Company. To reduce exposure to currency transaction risk, the Group regularly reviews the currency in which it spends its cash to identify and avoid specific expenditures in currencies that experience inflationary pressures. Further the Group aims to maintain cash and cash equivalents in USD to avoid foreign exchange exposure and to meet short‐term liquidity requirements.

B. Sensitivity Analysis

As a result of the Group’s monetary assets and liabilities denominated in foreign currencies which is different to the functional currency of the underlying entities, the profit or loss and equity in the underlying entities could be affected by movements between the functional currency and the foreign currency. The table below indicates consolidated monetary assets/ (liabilities) in the Group that have a different functional currency and foreign currency.

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|  | 2021 USD’000 |  |  | 2020 USD’000 |  |  | 2019 USD’000 |
|  | Functional currency |  |  | Functional currency |  |  | Functional currency |
|  | ZAR |  |  | USD |  |  | ZAR |  |  | USD |  |  | ZAR |  |  | USD |
Cash and cash equivalents |  |  | 59 |  |  |  | 259 |  |  |  | 59 |  |  |  | 1,959 |  |  |  | 57 |  |  |  | 4,176 |
Trade and other receivables |  |  | - |  |  |  | 2,293 |  |  |  | - |  |  |  | 249 |  |  |  | - |  |  |  | 1,735 |
Trade and other payables |  |  | - |  |  |  | (166 | ) |  |  | - |  |  |  | (174 | ) |  |  | - |  |  |  | (179 | )
Term loan |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 408 |  |  |  | - |  |  |  | (2,471 | )
Overdraft |  |  | - |  |  |  | (887 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (490 | )
|  |  | 59 |  |  |  | 1,499 |  |  |  | 59 |  |  |  | 2,442 |  |  |  | 57 |  |  |  | 2,771 |

A reasonably possible strengthening or weakening of 5% of the various functional currencies against the foreign currencies would have the following equal or opposite effect on profit or loss before tax for the Group:

|  | 2021 USD’000 |  |  | 2020 USD’000 |  |  | 2019 USD’000 |
|  | Functional currency |  |  | Functional currency |  |  | Functional currency |
|  | ZAR |  |  | USD |  |  | ZAR |  |  | USD |  |  | ZAR |  |  | USD |
Cash and cash equivalents |  |  | 3 |  |  |  | 40 |  |  |  | 3 |  |  |  | 103 |  |  |  | 3 |  |  |  | 199 |
Trade and other receivables |  |  | - |  |  |  | 109 |  |  |  | - |  |  |  | 12 |  |  |  | - |  |  |  | 82 |
Trade and other payables |  |  | - |  |  |  | (8 | ) |  |  | - |  |  |  | (8 | ) |  |  | - |  |  |  | 9 |
Term loan |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 19 |  |  |  | - |  |  |  | (117 | )
Overdraft |  |  | - |  |  |  | (42 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (23 | )
|  |  | 3 |  |  |  | 99 |  |  |  | 3 |  |  |  | 126 |  |  |  | 3 |  |  |  | 150 |

C. Interest Rate Risk

The Group's interest rate risk arises from loans and borrowings, overdraft facility and cash held. The loans and borrowings, overdraft facility and cash held have variable interest rate borrowings. Variable-rate borrowings expose the Group to cash flow interest rate risk. The Group has not entered into interest rate swap agreements.

The Group’s assets and (liabilities) exposed to interest rate fluctuations as at year-end are summarized as follows:

|  | 2021 |  |  | 2020 |  |  | 2019 |
Term loan |  |  | - |  |  |  | (408 | ) |  |  | (2,471 | )
Cash and cash equivalents |  |  | 17,152 |  |  |  | 19,092 |  |  |  | 9,383 |
Overdraft |  |  | (887 | ) |  |  | - |  |  |  | (490 | )

Interest rate risk arising is offset by available cash and cash equivalents. The table below summarizes the effect of a change in finance cost on the Group’s profit or loss and equity for the year, had the rates charged differed.

Sensitivity analysis – cash and cash equivalents

|  | 2021 |  |  | 2020 |  |  | 2019 |
Increase in 100 basis points |  |  | 172 |  |  |  | 191 |  |  |  | 94 |
Decrease in 100 basis points |  |  | (172 | ) |  |  | (191 | ) |  |  | (94 | )

Sensitivity analysis – term loan |  |  |  |  |  |  |  |  |  |  |  |
Increase in 100 basis points |  |  | - |  |  |  | 4 |  |  |  | (25 | )
Decrease in 100 basis points |  |  | - |  |  |  | (4 | ) |  |  | 25 |

Sensitivity analysis – overdraft |  |  |  |  |  |  |  |  |  |  |  |
Increase in 100 basis points |  |  | 9 |  |  |  | - |  |  |  | (5 | )
Decrease in 100 basis points |  |  | (9 | ) |  |  | - |  |  |  | 5 |

86

D. Concentration of Credit Risk

Credit risk is the risk of a financial loss to the Company if a debtor fails to meet its contractual obligation. From 2014, gold sales were made to Fidelity in Zimbabwe and the payment terms stipulated in the service delivery contract have been adhered to in all instances. Trade and other receivables are analysed in note 24 to the Consolidated Financial Statements and include $4.5 million (2020: $1.3 million; 2019: $3.0 million) due from Fidelity in respect of gold deliveries immediately prior to the close of business at the end of 2021 and $3.2 million (2020: $2.3 million; 2019: $1.8 million) due from the Zimbabwe Government in respect of VAT refunds. The amount due from Fidelity was paid in full after year-end; the outstanding balance at December 31, 2021 reflects a normal balance in the context of the timing of bullion shipments to Fidelity and payments from Fidelity for bullion received. The amount due in respect of the longer-outstanding VAT refunds were within the agreed terms and a portion was also received after year-end.

E. Liquidity Risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group manages its liquidity risk by ensuring that there is enough cash to meet its likely cash requirements, after taking into account cash flows from operations and the Group’s holdings of cash and cash equivalents. The Group believes that these sources will be enough to cover the anticipated cash requirements. Senior management is also actively involved in the review and approval of planned expenditures by regularly monitoring cash flows from operations and anticipated investing and financing activities.

F. Market Risk – Gold Price

The value of the Company’s mineral properties is related to the price of gold and the outlook for these minerals. In addition, adverse changes in the price of certain key or high cost operating consumables can significantly impair the Company’s cash flows.

Gold prices historically have fluctuated widely and are affected by numerous factors outside of the Company's control, including, but not limited to, industrial and retail demand, central bank lending, forward sales by producers and speculators, levels of worldwide production, short-term changes in supply and demand because of speculative hedging activities, and macro-economic variables, and certain other factors related specifically to gold.

The Group regularly monitors its market risk and evaluates the options available. Post year end management entered into a cap and collar hedge to hedge its exposure to the gold price and on December 13, 2021 into a gold loan and call option. Refer to note 14.2 of the Consolidated Financial Statements for more detail.

Sensitivity analysis

A reasonably possible strengthening (weakening) of the gold price will have an impact on the revenue of the Group and the fair value of the gold loan and call option at December 31, 2021. This would have affected the measurement of financial instruments by the amounts as indicated below. This analysis assumes that all other variables remain constant.

As at December 31, 2021 an increase or decrease of 5% of the gold price would have the following equal or opposite effect on the:

Consolidated statement of financial position:

|  | Increase |  |  | Decrease |
Derivative financial liabilities - gold loan |  |  | 143 |  |  |  | (143 | )
Derivative financial liabilities - call option |  |  | 11 |  |  |  | (11 | )
|  |  | 154 |  |  |  | (154 | )

87

Consolidated statement of profit or loss and other comprehensive income:

|  | Increase |  |  | Decrease |
Fair value loss on derivative financial instruments - gold loan |  |  | 143 |  |  |  | (143 | )
Fair value loss on derivative financial instruments - call option |  |  | 11 |  |  |  | (11 | )
|  |  | 154 |  |  |  | (154 | )

The Group’s revenues had full exposure to the gold price up to December 13, 2021 when the gold loan and call option agreement was concluded (refer note 14.2 of the Consolidated Financial Statements).

ITEM 12 - DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

88

PART II

ITEM 13 - DEFAULTS, DIVIDEND ARREARS AND DELINQUENCIES

There has not been a material default in the payment of principal, interest, a sinking or purchase fund installment, or any other material default not cured within thirty days, relating to indebtedness of the Company or any of its significant subsidiaries. There are no payments of dividends by the Company in arrears, nor has there been any other material delinquency relating to any class of preference shares of the Company.

ITEM 14 - MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

A. to D.

None.

E. Use of Proceeds

Not applicable.

ITEM 15 - CONTROLS AND PROCEDURES

A. Disclosure Controls and Procedures

The Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) have evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures, and assessed the design of the Company’s internal control over financial reporting as of December 31, 2021. As required by Rule 13(a)-15 under the Exchange Act, in connection with this Annual Report on Form 20-F, under the direction of our CEO and CFO, we have evaluated our disclosure controls and procedures as of December 31, 2021, and we have concluded our disclosure controls and procedures were effective as at December 31, 2021.

B. Management’s annual report on internal control over financial reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting has been designed to provide reasonable assurance with respect to the reliability of financial reporting and the presentation of financial statements for external purposes in accordance with IFRS. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.

As of the date of this filing, we have in place controls and procedures to maintain appropriate segregation of duties in our manual and computer-based business processes that we believe are appropriate for a company of our size and extent of business transactions. Under the supervision and with the participation of the CEO and CFO, management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021. In making their assessment, management used the control objectives established in the 2013 Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) framework. Based upon that assessment and those criteria, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2021.

C. Attestation report of registered public accounting firm

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm as we qualify as an "emerging growth company" under section 3(a) of the Exchange Act (as amended by the JOBS Act, enacted on April 5, 2012), and are therefore exempt from the attestation requirement.

89

D. Changes in internal controls over financial reporting

There were no changes in the Company’s internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of 17 CFR 240.13a-15 or 240.15d-15 that occurred during the period covered by this Annual Report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting.

ITEM 16 - [RESERVED]

ITEM 16A - AUDIT COMMITTEE FINANCIAL EXPERT

Caledonia’s board of directors has determined that the three members of its Audit Committee are considered independent as defined under Canadian National Instrument 52-110 and as defined pursuant to Section 803 of the NYSE American LLC Company Guide (as such definition may be modified or supplemented) and considered to be financially literate as such terms are defined under Canadian National Instrument 52-110, and one of the members can be considered to be a financial expert as defined in Item 407(d)(5) of Regulation S-K under the Exchange Act. The financial expert serving on the Audit Committee is Mr. J. Holtzhausen, whose experience is disclosed in this Annual Report under Item 6.A “Directors and Senior Management”. Messrs. J. Holtzhausen, J. Kelly and G. Wildschutt are all independent directors under the applicable rules.

The SEC has indicated that the designation of an audit committee financial expert does not make that person an "expert" for any purpose, impose any duties, obligations, or liability on that person that are greater than those imposed on members of the Audit Committee and board of directors who do not carry this designation, or affect the duties, obligations, or liabilities of any other member of the Audit Committee.

ITEM 16B - CODE OF ETHICS

On November 8, 2016 the registrant’s board of directors approved in principle, and the Company formally adopted on March 7, 2017, a revised code of business conduct, ethics and anti-bribery policy that applies to the registrant’s directors, CEO, CFO, principal accounting officer or controller, or persons performing similar functions, and all other employees and contractors. The code was further revised and the most recent updated version was adopted on November 10, 2020.

The text of this code is available on the Company’s website (www.caledoniamining.com/index.php/aboutus/corporate-governance).

The Company has not granted any waiver from the Code of Ethics to the CEO, CFO, principal accounting officer or controller, or persons performing similar functions during the fiscal year ended December 31, 2021.

ITEM 16C - PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth the aggregate fees billed by our external auditors, BDO South Africa Incorporated, Johannesburg, Gauteng, South Africa (PCAOB ID 1368), unless stated otherwise, for the years indicated:

|  |  | (1)(2)2021 |  |  |  | (1)(2)2020 |
Audit fees |  |  | 282,888 |  |  |  | 255,553 |
Audit – related fees |  |  | - |  |  |  | - |
Tax fees |  |  | - |  |  |  | - |
All other fees |  |  | 12,715 |  |  |  | 38,191 |
TOTAL |  |  | 295,603 |  |  |  | 293,744 |

Notes:

(1) | Prior to the start of the audit process, Caledonia’s Audit Committee receives an estimate of the costs from its auditors and reviews such costs for their reasonableness. After their review and pre-approval of the fees, the Audit Committee recommends to the board of directors whether to accept the estimated audit fees given by the auditors.
(2) | Represents fees billed by BDO South Africa Incorporated

90

ITEM 16D - EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E - PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Not applicable.

ITEM 16F - CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT

None.

ITEM 16G - CORPORATE GOVERNANCE

Because our securities are listed on NYSE American, being a national securities exchange in the United States, we are subject to the corporate governance requirements set out in the NYSE American LLC Company Guide. We are also subject to a variety of corporate governance guidelines and requirements enacted by the jurisdictions and exchanges in which we operate our business and on which our securities are traded. We incorporate a mix of corporate governance best practices to ensure that our corporate governance complies in all material respects with the requirements of the jurisdictions in which we operate and the exchanges on which our securities are traded. The Company has also adopted the UK’s Quoted Companies Alliance Corporate Governance Code and discloses on its website how it satisfies the ten principles of the Code.

Section 110 of the NYSE American Company Guide permits NYSE American to consider the laws, customs and practices of foreign issuers, and to grant exemptions from NYSE American listing criteria based on these considerations. A company seeking relief under these provisions is required to provide a written certification from independent local counsel that the non-complying practice is not prohibited by home country law. A description of the significant ways in which the Company’s governance practices differ from those followed by domestic companies pursuant to NYSE American standards is as follows:

Shareholder Meeting Quorum Requirement: the NYSE American Company Guide specifies a quorum requirement of at least 33-1/3% of the shares issued and outstanding and entitled to vote for meetings of a listed company's shareholders. The Company's quorum requirements for shareholder meetings, as set forth in the Articles, are two members entitled to vote at the meeting present in person or by proxy together holding or representing by proxy not less than five percent of the issued shares of the Company. The Company's quorum requirement as set forth in the Articles is not prohibited by, and does not contravene, the Companies Law.

Proxy Delivery Requirement: the NYSE American requires the solicitation of proxies and delivery of proxy statements for all shareholder meetings and requires that these proxies be solicited pursuant to a proxy statement that conforms to SEC proxy rules. The Company is a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act, and the equity securities of the Company are accordingly exempt from the proxy rules set forth in Sections 14(a), 14(b), 14(c) and 14(f) of the Exchange Act. The Company complies with the applicable rules and regulations in Jersey.

In addition, the Company may from time-to-time seek relief from NYSE American corporate governance requirements on specific transactions under Section 110 of the NYSE American Company Guide by providing written certification from independent local counsel that the non-complying practice is not prohibited by our home country law, in which case, the Company shall make the disclosure of such transactions available on its website at http://www.caledoniamining.com. Information contained on the Company’s website is not part of this Form 20-F.

91

ITEM 16H - MINE SAFETY DISCLOSURE

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities with respect to mining operations and properties in the United States that are subject to regulation by the Federal Mine Safety and Health Administration ("MSHA") under the Federal Mine Safety and Health Act of 1977 (the "Mine Act"). During the year ended December 31, 2021, the Company had no mines in the United States that were subject to regulation by the MSHA under the Mine Act.

ITEM 16I - DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

92

PART III

ITEM 17 - FINANCIAL STATEMENTS

See Item 18.

ITEM 18 - FINANCIAL STATEMENTS

The Consolidated Financial Statements and schedules appear on pages F-1 through F-67 of this Annual Report and are incorporated herein by reference. Our audited financial statements as prepared by our management and approved by the board of directors include:

Consolidated Statements of Profit or Loss and Other Comprehensive Income

Consolidated Statements of Financial Position

Consolidated Statements of Changes in Equity

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

All the above statements are available on the Company’s website at www.caledoniamining.com or under the Company’s profile on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com

ITEM 19 - EXHIBITS

Financial Statements

Description |  | Page
Consolidated Financial Statements and Notes |  | F-1- F-67

Exhibit List

Exhibit No. | Name
1.1 | Articles of Association (incorporated herein by reference to Exhibit 1.1 to the Registrant’s Annual Report on Form 20-F filed with the SEC on March 31, 2016)
2.1 | Description of Registered Securities (incorporated herein by reference as Exhibit 2.1 of the Registrant’s Annual Report on Form 20-F filed with the SEC on March 29, 2021)
4.1 | OEICP (revised 2020) (incorporated herein by reference as Exhibit 2.1 of the Registrant’s Annual Report on Form 20-F filed with the SEC on March 29, 2021)
4.2 | Employment contracts/executive employment agreements (incorporated herein by reference to Exhibit 4.2 to the Registrant’s Annual Report on Form 20-F filed with the SEC on March 31, 2017)
4.3 | Share Subscription Agreements – Blanket Mine (incorporated herein by reference to Exhibit 15.4 to the Registrant’s Annual Report on Form 20-F filed with the SEC on March 31, 2015)
4.4 | Addendum to share subscription agreements – FREMIRO, GCSOT, NIEEF, BETS (incorporated herein by reference to Exhibit 4.4 of the Registrant’s Annual Report on Form 20-F filed with the SEC on April 2, 2018)
4.5 | Share Purchase Agreement by and between the Company and Fremiro, dated November 6, 2018 (incorporated herein by reference to Exhibit 4.5 of the Registrant’s Annual Report on Form 20-F filed with the SEC on March 28, 2019)
4.6 | January 11, 2019 PU award agreement and addendum example (incorporated herein by reference as Exhibit 4.6 of the Registrant’s Annual Report on Form 20-F filed with the SEC on March 28, 2019)
4.7 | January 19, 2020 RSU and PU award agreement example (incorporated herein by reference as Exhibit 4.7 of the Registrant’s Annual Report on Form 20-F filed with the SEC on March 31, 2020)
4.8 | January 11, 2021 PU award agreement example (incorporated herein by reference as Exhibit 4.8 of the Registrant’s Annual Report on Form 20-F filed with the SEC on March 29, 2021)
4.9 | Mining Lease (incorporated herein by reference to Exhibit 4.9 of the registrant’s Annual Report on Form 20-F filed with the SEC on March 31, 2020)

93

Exhibit No. | Name
4.10 | January 24, 2022 PU award agreement example
4.11 | Addendum to Award Agreement dated January 24, 2022
4.12 | Agreement of Sale – Maligreen Mining Claims
8.1 | List of Caledonia Mining Corporation Plc group entities
12.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1 | Consent of BDO South Africa Incorporated
15.2 | Consent of Uwe Engelmann
15.3 | Consent of Daniel (Daan) van Heerden
15.4 | S-K 1300 Technical Report Summary on the Blanket Gold Mine, Zimbabwe, with an effective date of December 31, 2021
15.5 | S-K 1300 Technical Report Summary on the Maligreen Gold Project, Zimbabwe, with an effective date of December 31, 2021
101.INS | Inline XBRL Instance Document
101.SCH | Inline XBRL Taxonomy Extension Schema Document
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 | Cover Page Interactive Data File

94

SIGNATURES

The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and has duly caused and authorized the undersigned to sight this Annual Report on its behalf.

|  | CALEDONIA MINING CORPORATION PLC.
Date: May 17, 2022 | By: | /s/ Mark Learmonth
|  | Name: Mark Learmonth
|  | Title: Chief Financial Officer

95

| Tel: +27 011 488 1700 Fax: +27 010 060 7000 www.bdo.co.za | Wanderers Office Park 52 Corlett Drive Illovo, 2196 Private Bag X60500 Houghton, 2041 South Africa

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Caledonia Mining Corporation Plc

St Helier, Jersey Channel Islands

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statement of financial position of Caledonia Mining Corporation Plc (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of profit or loss and other comprehensive income, statements of changes in equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

BDO South Africa Inc.

We have served as the Group's auditor since year 2018.

BDO South Africa Incorporated

Wanderers Office Park

52 Corlett Drive

Illovo, 2196

May 17, 2022

(date of signing consent)

BDO South Africa Incorporated
Registration number: 1995/002310/21
Practice number: 905526
VAT number: 4910148685

Chief Executive Officer: B Mokoena

A full list of all company directors is available on www.bdo.co.za

The company's principal place of business is at 22 Wellington Road, Parktown, Johannesburg, where a list of directors' names is available for inspection. BDO South Africa Incorporated, a South African personal liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

F-1

Caledonia Mining Corporation Plc

Consolidated statements of profit or loss and other comprehensive income

(in thousands of United States Dollars, unless indicated otherwise)

For the years ended December 31 |  | Note |  |  | 2021 |  |  | 2020 |  |  | 2019 |
Revenue |  |  | 7 |  |  |  | 121,329 |  |  |  | 100,002 |  |  |  | 75,826 |
Less: Royalty |  |  |  |  |  |  | (6,083 | ) |  |  | (5,007 | ) |  |  | (3,854 | )
Production costs |  |  | 8 |  |  |  | (53,126 | ) |  |  | (43,711 | ) |  |  | (36,400 | )
Depreciation |  |  | 18 |  |  |  | (8,046 | ) |  |  | (4,628 | ) |  |  | (4,434 | )
Gross profit |  |  |  |  |  |  | 54,074 |  |  |  | 46,656 |  |  |  | 31,138 |
Other income |  |  | 9 |  |  |  | 46 |  |  |  | 4,765 |  |  |  | 2,274 |
Other expenses |  |  | 10 |  |  |  | (7,136 | ) |  |  | (5,315 | ) |  |  | (666 | )
Administrative expenses |  |  | 11 |  |  |  | (9,091 | ) |  |  | (7,997 | ) |  |  | (5,637 | )
Cash-settled share-based expense |  |  | 12.1 |  |  |  | (477 | ) |  |  | (1,413 | ) |  |  | (689 | )
Net foreign exchange gain |  |  | 13 |  |  |  | 1,184 |  |  |  | 4,305 |  |  |  | 29,661 |
Profit on sale of subsidiary |  |  | 23.2 |  |  |  | – |  |  |  | – |  |  |  | 5,409 |
Fair value losses on derivative instruments |  |  | 14.1 |  |  |  | (240 | ) |  |  | (266 | ) |  |  | (601 | )
Operating profit |  |  |  |  |  |  | 38,360 |  |  |  | 40,735 |  |  |  | 60,889 |
Finance income |  |  | 16 |  |  |  | 14 |  |  |  | 62 |  |  |  | 146 |
Finance cost |  |  | 16 |  |  |  | (375 | ) |  |  | (367 | ) |  |  | (344 | )
Profit before tax |  |  |  |  |  |  | 37,999 |  |  |  | 40,430 |  |  |  | 60,691 |
Tax expense |  |  | 17 |  |  |  | (14,857 | ) |  |  | (15,173 | ) |  |  | (10,290 | )
Profit for the year |  |  |  |  |  |  | 23,142 |  |  |  | 25,257 |  |  |  | 50,401 |
Other comprehensive income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Items that are or may be reclassified to profit or loss |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Exchange differences on translation of foreign operations |  |  |  |  |  |  | (531 | ) |  |  | (173 | ) |  |  | 49 |
Reclassification of accumulated exchange differences on the sale of subsidiary |  |  |  |  |  |  | – |  |  |  | – |  |  |  | (2,109 | )
Total comprehensive income for the year |  |  |  |  |  |  | 22,611 |  |  |  | 25,084 |  |  |  | 48,341 |
Profit attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owners of the Company |  |  |  |  |  |  | 18,405 |  |  |  | 20,780 |  |  |  | 42,018 |
Non-controlling interests |  |  | 28 |  |  |  | 4,737 |  |  |  | 4,477 |  |  |  | 8,383 |
Profit for the year |  |  |  |  |  |  | 23,142 |  |  |  | 25,257 |  |  |  | 50,401 |
Total comprehensive income attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owners of the Company |  |  |  |  |  |  | 17,874 |  |  |  | 20,607 |  |  |  | 39,958 |
Non-controlling interests |  |  | 28 |  |  |  | 4,737 |  |  |  | 4,477 |  |  |  | 8,383 |
Total comprehensive income for the year |  |  |  |  |  |  | 22,611 |  |  |  | 25,084 |  |  |  | 48,341 |
Earnings per share |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings per share ($) |  |  | 27 |  |  |  | 1.49 |  |  |  | 1.73 |  |  |  | 3.82 |
Diluted earnings per share ($) |  |  | 27 |  |  |  | 1.48 |  |  |  | 1.73 |  |  |  | 3.81 |

The accompanying notes on pages 10 to 70 are an integral part of these consolidated financial statements.

On behalf of the Board: “S.R. Curtis”- Chief Executive Officer and “J.M. Learmonth”- Chief Financial Officer.

F-2

Caledonia Mining Corporation Plc

Consolidated statements of financial position

(in thousands of United States Dollars, unless indicated otherwise)

Unaudited |  |  |  |  |  |  |  |  |  |  |  |
As at December 31 |  | Note |  |  | 2021 |  |  | 2020 |
Assets |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | 18 |  |  |  | 149,102 |  |  |  | 126,479 |
Exploration and evaluation asset |  |  | 19 |  |  |  | 8,648 |  |  |  | 6,768 |
Deferred tax asset |  |  | 17 |  |  |  | 194 |  |  |  | 87 |
Total non-current assets |  |  |  |  |  |  | 157,944 |  |  |  | 133,334 |
Inventories |  |  | 20 |  |  |  | 20,812 |  |  |  | 16,798 |
Prepayments |  |  | 21 |  |  |  | 6,930 |  |  |  | 1,974 |
Trade and other receivables |  |  | 24 |  |  |  | 7,938 |  |  |  | 4,962 |
Income tax receivable |  |  | 17 |  |  |  | 101 |  |  |  | 76 |
Derivative financial assets |  |  | 14.1 |  |  |  | – |  |  |  | 1,184 |
Cash and cash equivalents |  |  | 22 |  |  |  | 17,152 |  |  |  | 19,092 |
Assets held for sale |  |  | 23 |  |  |  | – |  |  |  | 500 |
Total current assets |  |  |  |  |  |  | 52,933 |  |  |  | 44,586 |
Total assets |  |  |  |  |  |  | 210,877 |  |  |  | 177,920 |
Equity and liabilities |  |  |  |  |  |  |  |  |  |  |  |
Share capital |  |  | 25 |  |  |  | 82,667 |  |  |  | 74,696 |
Reserves |  |  | 26 |  |  |  | 137,779 |  |  |  | 138,310 |
Retained loss |  |  |  |  |  |  | (59,150 | ) |  |  | (71,487 | )
Equity attributable to shareholders |  |  |  |  |  |  | 161,296 |  |  |  | 141,519 |
Non-controlling interests |  |  | 28 |  |  |  | 19,260 |  |  |  | 16,524 |
Total equity |  |  |  |  |  |  | 180,556 |  |  |  | 158,043 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Provisions |  |  | 29 |  |  |  | 3,294 |  |  |  | 3,567 |
Deferred tax liabilities |  |  | 17 |  |  |  | 8,034 |  |  |  | 4,234 |
Loans and borrowings - long term portion |  |  | 30 |  |  |  | – |  |  |  | – |
Cash-settled share-based payment - long term portion |  |  | 12.1 |  |  |  | 974 |  |  |  | 1,934 |
Lease liabilities - long term portion |  |  | 15 |  |  |  | 331 |  |  |  | 178 |
Total non-current liabilities |  |  |  |  |  |  | 12,633 |  |  |  | 9,913 |
Loans and borrowings - short term portion |  |  | 30 |  |  |  | – |  |  |  | 408 |
Cash-settled share-based payment - short term portion |  |  | 12.1 |  |  |  | 2,053 |  |  |  | 336 |
Lease liabilities - short term portion |  |  | 15 |  |  |  | 134 |  |  |  | 61 |
Derivative financial liabilities |  |  | 14.2 |  |  |  | 3,095 |  |  |  | – |
Income taxes payable |  |  | 17 |  |  |  | 1,562 |  |  |  | 495 |
Trade and other payables |  |  | 31 |  |  |  | 9,957 |  |  |  | 8,664 |
Overdraft |  |  | 22 |  |  |  | 887 |  |  |  | – |
Total current liabilities |  |  |  |  |  |  | 17,688 |  |  |  | 9,964 |
Total liabilities |  |  |  |  |  |  | 30,321 |  |  |  | 19,877 |
Total equity and liabilities |  |  |  |  |  |  | 210,877 |  |  |  | 177,920 |

The accompanying notes on pages 10 to 70 are an integral part of these consolidated financial statements.

F-3

Caledonia Mining Corporation Plc

Consolidated statements of changes in equity

(in thousands of United States Dollars, unless indicated otherwise)

|  | Note |  |  | Share capital |  |  | Foreign currency translation reserve |  |  | Contributed surplus |  |  | Equity-settled share-based payment reserve |  |  | Retained loss |  |  | Total |  |  | Non-controlling interests (NCI) |  |  | Total equity |
Balance January 1, 2019 |  |  |  |  |  |  | 55,102 |  |  |  | (6,561 | ) |  |  | 132,591 |  |  |  | 16,760 |  |  |  | (127,429 | ) |  |  | 70,463 |  |  |  | 8,345 |  |  |  | 78,808 |
Transactions with owners: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dividends declared |  |  | 34 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (2,969 | ) |  |  | (2,969 | ) |  |  | (426 | ) |  |  | (3,395 | )
Equity-settled share-based payment |  |  |  |  |  |  | 963 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 963 |  |  |  | - |  |  |  | 963 |
Total comprehensive income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Profit for the year |  |  |  |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 42,018 |  |  |  | 42,018 |  |  |  | 8,383 |  |  |  | 50,401 |
Other comprehensive income for the year |  |  |  |  |  |  | - |  |  |  | (2,060 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (2,060 | ) |  |  | - |  |  |  | (2,060 | )
Balance December 31, 2019 |  |  |  |  |  |  | 56,065 |  |  |  | (8,621 | ) |  |  | 132,591 |  |  |  | 16,760 |  |  |  | (88,380 | ) |  |  | 108,415 |  |  |  | 16,302 |  |  |  | 124,717 |
Transactions with owners: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dividends declared |  |  | 34 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (3,887 | ) |  |  | (3,887 | ) |  |  | (655 | ) |  |  | (4,542 | )
Shares issued: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- Share-based payment |  |  | 12.1 |  |  |  | 216 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 216 |  |  |  | - |  |  |  | 216 |
- Options exercised |  |  | 25 |  |  |  | 30 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 30 |  |  |  | - |  |  |  | 30 |
- Equity raise (net of transaction cost) |  |  | 25 |  |  |  | 12,538 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 12,538 |  |  |  | - |  |  |  | 12,538 |
- Blanket shares purchased from Fremiro |  |  | 5 |  |  |  | 5,847 |  |  |  | - |  |  |  | - |  |  |  | (2,247 | ) |  |  | - |  |  |  | 3,600 |  |  |  | (3,600 | ) |  |  | - |
Total comprehensive income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Profit for the year |  |  |  |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 20,780 |  |  |  | 20,780 |  |  |  | 4,477 |  |  |  | 25,257 |
Other comprehensive income for the year |  |  |  |  |  |  | - |  |  |  | (173 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (173 | ) |  |  | - |  |  |  | (173 | )
Balance at December 31, 2020 |  |  |  |  |  |  | 74,696 |  |  |  | (8,794 | ) |  |  | 132,591 |  |  |  | 14,513 |  |  |  | (71,487 | ) |  |  | 141,519 |  |  |  | 16,524 |  |  |  | 158,043 |
Transactions with owners: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dividends declared |  |  | 34 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (6,068 | ) |  |  | (6,068 | ) |  |  | (2,001 | ) |  |  | (8,069 | )
Shares issued: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- Options exercised |  |  | 25 |  |  |  | 165 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 165 |  |  |  | - |  |  |  | 165 |
- Equity raise (net of transaction cost) |  |  | 25 |  |  |  | 7,806 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 7,806 |  |  |  | - |  |  |  | 7,806 |
Total comprehensive income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Profit for the year |  |  |  |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 18,405 |  |  |  | 18,405 |  |  |  | 4,737 |  |  |  | 23,142 |
Other comprehensive income for the year |  |  |  |  |  |  | - |  |  |  | (531 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (531 | ) |  |  | - |  |  |  | (531 | )
Balance at December 31, 2021 |  |  |  |  |  |  | 82,667 |  |  |  | (9,325 | ) |  |  | 132,591 |  |  |  | 14,513 |  |  |  | (59,150 | ) |  |  | 161,296 |  |  |  | 19,260 |  |  |  | 180,556 |
|  | Note |  |  |  | 25 |  |  |  | 26 |  |  |  | 26 |  |  |  | 26 |  |  |  |  |  |  |  |  |  |  |  | 28 |  |  |  |  |

The accompanying notes on pages 10 to 70 are an integral part of these consolidated financial statements.

F-4

Caledonia Mining Corporation Plc

Consolidated statements of cash flows

For the years ended December 31,

(in thousands of United States Dollars, unless indicated otherwise)

|  | Note |  |  | 2021 |  |  | 2020 |  |  | 2019 |
Cash generated from operations |  |  | 32 |  |  |  | 38,703 |  |  |  | 37,967 |  |  |  | 23,885 |
Interest received |  |  |  |  |  |  | 14 |  |  |  | 56 |  |  |  | 146 |
Interest paid |  |  |  |  |  |  | (388 | ) |  |  | (405 | ) |  |  | (454 | )
Tax paid |  |  | 17 |  |  |  | (7,426 | ) |  |  | (6,656 | ) |  |  | (5,517 | )
Net cash from operating activities |  |  |  |  |  |  | 30,903 |  |  |  | 30,962 |  |  |  | 18,060 |
Cash flows used in investing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Acquisition of property, plant and equipment |  |  |  |  |  |  | (32,112 | ) |  |  | (25,081 | ) |  |  | (19,852 | )
Acquisition of exploration and evaluation assets |  |  |  |  |  |  | (5,717 | ) |  |  | (2,759 | ) |  |  | (172 | )
Proceeds from sale of assets held for sale |  |  | 23.1 |  |  |  | 500 |  |  |  | – |  |  |  | – |
Realisation (purchase) of Gold ETF |  |  | 14.1 |  |  |  | 1,066 |  |  |  | (1,058 | ) |  |  | – |
Proceeds from disposal of subsidiary |  |  | 23.2 |  |  |  | 340 |  |  |  | 900 |  |  |  | 1,000 |
Net cash used in investing activities |  |  |  |  |  |  | (35,923 | ) |  |  | (27,998 | ) |  |  | (19,024 | )
Cash flows from financing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dividends paid |  |  |  |  |  |  | (8,069 | ) |  |  | (4,542 | ) |  |  | (3,395 | )
Term loan proceeds (net of transaction cost) |  |  | 30 |  |  |  | – |  |  |  | – |  |  |  | 2,294 |
Term loan repayments |  |  | 30 |  |  |  | (361 | ) |  |  | (574 | ) |  |  | – |
Proceeds from gold loan |  |  | 14.2 |  |  |  | 2,752 |  |  |  | – |  |  |  | – |
Proceeds from call option |  |  | 14.2 |  |  |  | 208 |  |  |  | – |  |  |  | – |
Payment of lease liabilities |  |  | 15 |  |  |  | (129 | ) |  |  | (118 | ) |  |  | (124 | )
Shares issued – equity raise (net of transaction cost) |  |  | 25 |  |  |  | 7,806 |  |  |  | 12,538 |  |  |  | – |
Proceeds from share options exercised |  |  | 25 |  |  |  | 165 |  |  |  | 30 |  |  |  | – |
Net cash from (used in) financing activities |  |  |  |  |  |  | 2,372 |  |  |  | 7,334 |  |  |  | (1,225 | )
Net (decrease) / increase in cash and cash equivalents |  |  |  |  |  |  | (2,648 | ) |  |  | 10,298 |  |  |  | (2,189 | )
Effect of exchange rate fluctuations on cash and cash equivalents |  |  |  |  |  |  | (179 | ) |  |  | (99 | ) |  |  | (105 | )
Net cash and cash equivalents at the beginning of the year |  |  |  |  |  |  | 19,092 |  |  |  | 8,893 |  |  |  | 11,187 |
Net cash and cash equivalents at the end of the year |  |  | 22 |  |  |  | 16,265 |  |  |  | 19,092 |  |  |  | 8,893 |

The accompanying notes on pages 10 to 70 are an integral part of these consolidated financial statements.

F-5

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

| 1 | Reporting entity

Caledonia Mining Corporation Plc (“Caledonia” or the “Company”) is a company domiciled in Jersey, Channel Islands. The Company’s registered office address is B006 Millais House, Castle Quay, St Helier, Jersey, Channel Islands.

These consolidated financial statements of the Company and its subsidiaries (the “Group”) comprise the consolidated statements of financial position as at December 31, 2021 and 2020, the consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for each of the years ended December 31, 2021, 2020 and 2019, notes, significant accounting policies and other explanatory information. The Group’s primary involvement is in the operation of a gold mine and the exploration and development of mineral properties for precious metals.

Caledonia’s shares are listed on the NYSE American LLC stock exchange (symbol – “CMCL”). Depository interests in Caledonia’s shares are admitted to trading on AIM of the London Stock Exchange plc (symbol – “CMCL”). Caledonia listed on the Victoria Falls Stock Exchange (“VFEX”) (symbol – “CMCL”) on December 2, 2021. Caledonia voluntary delisted from the Toronto Stock Exchange (the “TSX”) on June 19, 2020. After the delisting the Company remains a Canadian reporting issuer and has to comply with Canadian securities laws until it demonstrates that Canadian shareholders represent less than 2% of issued share capital.

| 2 | Basis of preparation
| i) | Statement of compliance

The consolidated financial statements have been prepared on a going concern basis, in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

The consolidated financial statements were approved for issue by the Board of Directors on March 17, 2022.

| ii) | Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for:

| ● | cash-settled share-based payment arrangements measured at fair value on grant and re-measurement dates;

| ● | equity-settled share-based payment arrangements measured at fair value on the grant date; and
| ● | derivative financial assets and derivative financial liabilities measured at fair value.

| iii) | Functional currency

These consolidated financial statements are presented in United States Dollars (“$” or “US Dollars” or “USD”), which is also the functional currency of the Company. All financial information presented in US Dollars has been rounded to the nearest thousand, unless indicated otherwise. Refer to note 13 for changes to Zimbabwean real-time gross settlement, bond notes or bond coins (“RTGS$”) and its effect on the consolidated statement of profit or loss and other comprehensive income.

F-6

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

| 3 | Use of accounting assumptions, estimates and judgements

In preparing these consolidated financial statements, management has made accounting assumptions, estimates and judgements that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Changes in estimates are recognised prospectively.

| (a) | Estimation uncertainties
| i) | Depreciation of property, plant and equipment

Depreciation on mine development, infrastructure and other assets in the production phase is computed on the units-of-production method over the life-of-mine based on the estimated quantities of reserves (proven and probable) and resources (measured, indicated and inferred), which are planned to be extracted in the future from known mineral deposits. Where items have a shorter useful life than the life-of-mine, the mine development, infrastructure and other assets are depreciated over their useful life. Confidence in the existence, commercial viability and economical recovery of reserves and resources included in the life-of-mine may be based on historical experience and available geological information. This is in addition to the drilling results obtained by the Group and management’s knowledge of the geological setting of the surrounding areas, which would enable simulations and extrapolations to be done with a sufficient degree of accuracy. In instances where management is able to demonstrate the economic recovery of resources with a high level of confidence, such additional resources, are included in the calculation of depreciation.

Other items of property, plant and equipment are depreciated as described in note 4(g)(iii).

| ii) | Mineral reserves and resources

Mineral reserves and resources are estimates of the amount of product that can be economically and legally extracted. In order to calculate the reserves and resources, estimates and assumptions are required about a range of geological, technical and economic factors, including but not limited to quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity prices and exchange rates. Estimating the quantity and grade of mineral reserves and resources requires the size, shape and depth of orebodies to be determined by analysing geological data such as the logging and assaying of drill samples. This process may require complex and difficult geological assumptions and calculations to interpret the data. Estimates of mineral reserves and resources may change due to the change in economic assumptions used to estimate mineral reserves and resources and due to additional geological data becoming available during the course of operations.

The Group estimates its reserves (proven and probable) and resources (measured, indicated and inferred) based on information compiled by a Qualified Person in terms of the Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) relating to geological and technical data of the size, depth, shape and grade of the ore body and suitable production techniques and recovery rates. Such an analysis requires geological and engineering assumptions to interpret the data. These assumptions include:

| ● | correlation between drill-holes intersections where multiple reefs are intersected;

| ● | continuity of mineralisation between drill-hole intersections within recognised reefs; and

| ● | appropriateness of the planned mining methods.

F- 7

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

| 3 | Use of accounting assumptions, estimates and judgements (continued)

| (a) | Assumptions and estimation uncertainties (continued)
| ii) | Mineral reserves and resources (continued)

The Group estimates and reports reserves and resources in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) – CIM Definition Standards for Mineral Resources and Mineral Reserves. Complying with the CIM code, NI 43-101 requires the use of reasonable assumptions to calculate the recoverable resources. These assumptions include:

● | the gold price based on current market price and the Group’s assessment of future prices;

● | estimated future on-mine costs, sustaining and non-sustaining capital expenditures;

● | cut-off grade;

● | dimensions and extent, determined both from drilling and mine development, of ore bodies; and

● | planned future production from measured, indicated and inferred resources.

Changes in reported reserves and resources may affect the Group’s financial results and position in several ways, including the following:

| ● | asset carrying values may be affected due to changes in the estimated cash flows (i.e. Impairment);

| ● | depreciation and amortisation charges to profit or loss may change as these are calculated on the unit-of production method or where useful lives of an asset change; and

| ● | decommissioning, site restoration and environmental provisions and resources which may affect expectations about the timing or cost of these activities.

iii) | Blanket mine’s indigenisation transaction

The initial indigenisation transaction and modifications to the indigenisation transaction of Blanket Mine (1983) (Private) Limited (“Blanket Mine”) required management to make significant assumptions and estimates which are explained in note 5.

iv) | Site restoration provision

The site restoration provision has been calculated for the Blanket Mine based on an independent analysis of the rehabilitation costs as performed in 2021. Assumptions and estimates are made when determining the inflationary effect on current restoration costs and the discount rate to be applied in arriving at the present value of the provision where the time value of money effect is significant. Assumptions, based on the current economic environment, have been made that management believes are a reasonable basis for estimating the future liability. These estimates take into account any material changes to the assumptions that occur when reviewed by management. Estimates are reviewed annually and are based on current regulatory requirements. Significant changes in estimates of contamination, restoration standards and techniques will result in changes to the provision from period to period. Actual rehabilitation costs will ultimately depend on future market prices for the rehabilitation. The final cost of the currently recognised site rehabilitation provision may be higher or lower than currently provided for (refer to note 29).

F- 8

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

3 | Use of accounting assumptions, estimates and judgements (continued)
(a) | Assumptions and estimation uncertainties (continued)

v) | Exploration and evaluation (“E&E”) assets

The Group also makes assumptions and estimates regarding the possible impairment of E&E assets by evaluating whether it is likely that future economic benefits will flow to the Group, which may be based on assumptions about future events or circumstances. Assumptions and estimates made may change if new information becomes available. If information becomes available suggesting that the recovery of expenditures is unlikely, the amount capitalised is written off in profit or loss in the period the new information becomes available. The recoverability of the carrying amount of exploration and evaluation assets depends on the availability of sufficient funding to bring the properties into commercial production, the price of the products to be recovered and the undertaking of profitable mining operations. As a result of these uncertainties, the actual amount recovered may vary significantly from the carrying amount.

vi) | Taxes

Significant assumptions and estimates are required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. In 2019 the Zimbabwe Revenue Authority (“ZIMRA”) issued Public Notice 26 (“PN26”) effective from February 22, 2019. PN26 provided clarity on the interpretation of Section 4 (a) of the Finance Act [Chapter 23.04] of Zimbabwe, which requires a company earning taxable income to pay tax in the same or other specified currency that the income is earned. PN 26 clarifies that the calculation of taxable income be expressed in RTGS$ and that the payment of the tax payable, determined in RTGS$, be paid in the ratio of turnover earned. The application of PN26 resulted in a significant reduction in the deferred tax liability and the Group recorded the best estimate of the tax liability. The clarification of PN26 was applied prospectively from the 2019 year.

Management believes they have adequately provided for the probable outcome of tax related matters; however, the final outcome or future outcomes anticipated in calculating the tax liabilities may result in a materially different outcome than the amount included in the tax liabilities. In addition, the Group further makes assumptions and estimates when recognising deferred tax assets relating to tax losses carried forward to the extent that there are sufficient future taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same taxable entity against which the unused tax losses may be utilised or sufficient estimated future taxable income against which the losses can be utilised.

vii) | Share-based payment transactions

Equity-settled share-based payment arrangements

The Group measures the cost of equity-settled share-based payment transactions with employees, directors and Blanket’s indigenous shareholders (refer to note 5) by reference to the fair value of the equity instruments on the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the appropriate valuation model and considering the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model, including the expected life of the share option, volatility and dividend yield.

F- 9

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

3 | Use of accounting assumptions, estimates and judgements (continued)
(a) | Assumptions and estimation uncertainties (continued)
vii) | Share-based payment transactions (continued)

Where the Company granted the counterparty to a share-based payment award the choice of settlement in cash or shares, the equity component is measured as the difference between the fair value of the goods and services and the fair value of the cash-settled share-based payment liability at the date when the goods and services are received at the measurement date. For transactions with employees, the equity component is zero.

Option pricing models require the input of assumptions, including the expected price volatility. Changes in the subjective input assumptions can materially affect the fair value estimate. Therefore, the existing models may not necessarily provide a reliable single measure of the fair value of the Group’s share options.

Cash-settled share-based payment arrangements

The fair value of the amount payable to employees regarding share-based awards that will be settled in cash is recognised as an expense with a corresponding increase in liabilities over the period over which the employee becomes unconditionally entitled to payment. The liability is re-measured at each reporting date. Any change in the fair value of the liability is recognised in profit or loss.

Additional information about significant assumptions and estimates used to determine the fair value of cash settled share-based payment transactions are disclosed in note 12.1.

viii) | Impairment

Non-financial assets

At each reporting date, the Group determines if impairment indicators exist, and if present, performs an impairment review of the non-financial assets held in the Group. The exercise is subject to various assumptions and estimates.

Non-derivative financial assets

The Group uses a simplified approach in accounting for trade receivables and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. The Company uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix.

(b) | Judgements

Judgement is required when assessing whether the Group controls an entity or not. Controlled entities are consolidated. Further information is given in notes 4(a) and 5.

Refer to note 4(b)(ii) for judgement applied to determine functional currency of entities in the Group and the use of the interbank rate of exchange to translate RTGS$.

F-10

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

4 | Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements. In addition, the accounting policies have been applied consistently by the Group.

a) | Basis of consolidation
i) | Subsidiaries and structured entities

Subsidiaries and certain structured entities are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variability in returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

ii) | Loss of control

When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related Non-controlling interests (“NCI”) and other components of equity. Any gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

iii) | Non-controlling interests

NCI is measured at their proportionate share of the carrying amounts of the acquiree’s identifiable net assets at fair value at the acquisition date. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions

iv) | Transactions eliminated on consolidation

Intra-group balances and transactions arising from intra-group transactions are eliminated.

(a) | Foreign currency
i) | Foreign operations

As stated in note 2(iii) the presentation currency of the Group is the US Dollars. The functional currency of the Company and all its subsidiaries is the US Dollars except for the South African subsidiary that uses the South African Rand (“ZAR”) as its functional currency. Subsidiary financial statements have been translated to the presentation currency as follows:

| ● | assets and liabilities are translated using the exchange rate at year end; and

| ● | income, expenses and cash flow items are translated using the rate that approximates the exchange rates at the dates of the transactions.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from the item are considered to form part of the net investment in a foreign operation and are recognised in Other Comprehensive Income (“OCI”).

F- 11

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

4 | Significant accounting policies (continued)
(b) | Foreign currency (continued)
i) | Foreign operations (continued)

If settlement is planned or likely in the foreseeable future, foreign exchange gains and losses are included in profit or loss. When settlement occurs, the settlement will not be regarded as a partial disposal and accordingly the foreign exchange gain or loss previously recognised in OCI is not reclassified to profit or loss/reallocated to NCI.

When the Group disposes of its entire interest in a foreign operation or loses control over a foreign operation, the foreign currency gains or losses accumulated in OCI related to the foreign operation are reclassified to profit or loss. If the Group disposes of part of an interest in a foreign operation which remains a subsidiary, a proportionate amount of foreign currency gains or losses accumulated in OCI related to the subsidiary are reattributed between controlling and non-controlling interests.

All resulting translation differences are reported in OCI and accumulated in the foreign currency translation reserve.

ii) | Foreign currency translation

In preparing the financial statements of the Group entities, transactions in currencies other than the functional currency (foreign currencies) of these Group entities are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting date, monetary assets and liabilities are translated using the current foreign exchange rate. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All gains and losses on translation of these foreign currency transactions are included in profit or loss for the year.

On October 1, 2018 the Reserve Bank of Zimbabwe (“RBZ) pegged the Zimbabwe dollar (“RTGS$”) at 1:1 to the US Dollar and on February 20, 2019 issued a further monetary policy statement, which allowed inter-bank trading between RTGS$ and foreign currency. The interbank rate was introduced at 2.5 RTGS$ to 1 US Dollar and traded at 108.67 RTGS$ (2020: 81.79 RTGS$, 2019: 16.77 RTGS$) to 1 US Dollar as at December 31, 2021.

Further, the RBZ issued a directive to Zimbabwean banks to separate foreign currency (“Foreign currency”) and RTGS$ for bank accounts held by clients on October 1, 2018. Subsequent to the directive, the RBZ announced that 30% of Blanket Mine’s gold proceeds will be received in Foreign currency (i.e., US Dollars) and the remainder received as RTGS$. From November 12, 2018 the RBZ increased the Foreign currency allocation from 30% to 55%, with the remainder received as RTGS$. The RBZ increased the Foreign currency allocation with effect from May 26, 2020 from 55% to 70% and decreased the Foreign currency allocation with effect from January 8, 2021 from 70% to 60% with the remainder received as RTGS$. The allocation percentages remained in effect up to the date of approval of these financial statements. Further, the Company participated in the Foreign currency auction introduced by the Zimbabwean Government to exchange RTGS$ for US Dollars up to June 15, 2021.

F- 12

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

4 | Significant accounting policies (continued)
(b) | Foreign currency (continued)
ii) | Foreign currency translation (continued)

In June 2021 the RBZ announced that companies that are listed on the VFEX will receive 100% of the revenue arising from incremental production in US Dollars. Blanket has subsequently received confirmation that the “baseline” level of production for the purposes of calculating incremental production is 148.38 Kg per month (approximately 57,000 ounces per annum). The payment of the increased US Dollars proceeds for incremental production was applied from July 1, 2021 and Blanket has received all amounts due in terms of this revised policy up to the date of approval of these financial statements. Blanket intends to increase its production from approximately 67,000 ounces of gold in 2021 to a range of 73,000 to 80,000 ounces in 2022 and 80,000 ounces of gold from 2023 onwards. The CMCL listing on the VFEX should mean that Blanket will receive approximately 71.5% of its total revenues in US Dollars and the balance in RTGS$.

In applying IAS 21, management determined that the US Dollars remained the primary currency in which the Group’s Zimbabwean entities operate, as:

● | the majority of revenue is received in US Dollars;

● | the gold price receivable was calculated in US Dollars;

● | the majority of costs are calculated by reference to the US Dollars if denominated in RTGS$ or is paid in US Dollars; and

● | Income tax liabilities calculated in RTGS$ are settled predominantly in US Dollars.

The application of IAS 21, the advent of Statutory Instrument 142 (issued by Zimbabwean Government) and the devaluation of the RTGS$ against the US Dollars had an impact on the US Dollars value of RTGS$ denominated monetary assets and liabilities such as income and deferred tax liabilities, loans and borrowings, trade and other payables and to a lesser extent monetary asset such as cash held in RTGS$.

(c) | Leases

The Group recognises a right of use asset and a lease liability at the lease commencement date. The right of use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right of use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right of use asset reflects that the Group will exercise a purchase option. In that case the right of use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as property, plant and equipment. Also, the right of use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

F- 13

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

4 | Significant accounting policies (continued)
(c) | Leases (continued)

Lease payments included in the measurement of the lease liability comprise the following:

● | fixed payments, including in-substance fixed payments;

● | amounts expected to be payable under a residual value guarantee; and

● | the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if the lease agreement changes in substance in terms of payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right of use asset or is recorded in profit or loss if the carrying amount of the right of use asset has been reduced to zero.

The Group presents the right of use assets as property, plant and equipment. Lease liabilities are presented separately in the statement of financial position as current- and non-current Lease liabilities.

The Group has elected not to recognise the right of use assets and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(d) | Financial instruments
i) | Financial assets

The Group had the following financial assets:

Financial assets at amortised cost

Financial assets at amortised cost comprise loans and receivables included in Trade and other receivables. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method, less any impairment losses. A trade receivable without a significant financing component is initially measured at the transaction price. Refer to note 5(j)(i) for the impairment of receivables. Finance income was recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

F- 14

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

4 | Significant accounting policies (continued)
(d) | Financial instruments (continued)
i) | Financial assets (continued)

Fair value through profit or loss

This category comprises the Gold ETF, Bank balances and Gold hedge. These instruments are carried in the consolidated statement of financial position at fair value with changes in fair value recognised in the consolidated statement profit or loss and other comprehensive income as Fair value losses on derivative financial instruments. Transaction cost are recognized in profit or loss in in the consolidated statement profit or loss and other comprehensive income immediately when incurred. The Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.

ii) | Financial liabilities

The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired.

Fair value through profit or loss

Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value. This category comprises the Gold loan and the Call options, estimations made and further information is referred to in note 14.2. All changes in the fair value of derivative instruments are accounted for in profit or loss.

Financial liabilities at amortised cost

Non-derivative financial liabilities are recognised initially on the date at which the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

Non-derivative financial liabilities consist of bank overdrafts, loans and borrowings and trade and other payables.

Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method.

iv) | Offsetting

Financial assets and liabilities are offset and the net amount is presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

(e) | Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less. Bank overdrafts are repayable on demand and form an integral part of the Group’s cash management process. The bank overdraft is included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

F- 15

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

4 | Significant accounting policies (continued)

(f) | Share capital

Share capital is classified as equity. Incremental costs directly attributable to the issue, consolidation and repurchase of fractional items of shares and share options are recognised as a deduction from equity, net of any tax effects.

(g) | Property, plant and equipment
i) | Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, borrowing costs on qualifying assets, the costs of dismantling and removing the items and restoring the site on which they are located. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised in profit or loss. Refer to note 4(j)(ii) for the impairment of non-financial assets.

ii) | Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

iii) | Depreciation

Depreciation is calculated to write off the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. On commencement of commercial production, depreciation of mine development, infrastructure and other assets is calculated on the unit-of-production method using the Measured, Indicated and Inferred Mineral Resources of which the diluted Measured and Indicated Mineral Resources are converted to Mineral Reserves for extraction in Blanket’s life-of-mine plan (“LoMP”). Resources that are not included in the LoMP are not included in the calculation of depreciation.

For other categories, depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

All Mineral Resources and Reserves are categorised and reported in compliance with the definitions embodied in the CIM Definition Standards as incorporated into the NI 43-101, and Mineral Resources are reported inclusive of Mineral Reserves. Inferred Mineral Resources are not converted to Mineral Reserves.

Inferred Mineral Resources are considered in the LoMP to the extent that they are required in accessing, by development infrastructure, the Measured and Indicated Mineral Resources. In addition geological continuity is modelled, whilst grade continuity is continually upgraded by drilling of the Inferred Mineral Resources at depth, and where these Mineral Resources are above the cut-off, economically viable and of sufficient confidence, will be upgraded and form part of eventual extraction and as a result are included in the calculation of depreciation. Refer to note 18 for the evaluation of the cut-off.

F- 16

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

4 | Significant accounting policies (continued)
(g) | Property, plant and equipment
iii) | Depreciation (continued)

Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. An Inferred Mineral Resource has a lower level of confidence than that applied to an Indicated Mineral Resource. An Indicated Mineral Resource has a higher level of confidence than an Inferred Mineral Resource but has a lower level of confidence than a Measured Mineral Resource.

Mineral Resources in the Measured and Indicated Mineral Resource classifications have been converted into Proven and Probable Mineral Reserves respectively, by applying the applicable modifying factors and reasonable prospects of economic extraction.

Land is not depreciated.

The calculation of the production rate units could be affected to the extent that actual production in the future is different from the current forecast production. This would generally result from the extent to which there are significant changes in any of the factors or assumptions used in estimating mineral reserves and resources.

These factors include:

● | changes in mineral reserves and resources;

● | differences between actual commodity prices and commodity price assumptions;

● | unforeseen operational issues at mine sites; and

● | changes in capital, operating, mining, processing and reclamation costs, discount rates and foreign exchange rates.

The estimated useful lives for the current and comparative years are as follows:

● | buildings 10 to 15 years (2020: 10 to 15 years; 2019: 10 to 15 years);

● | plant and equipment 10 years (2020: 10 years; 2019: 10 years);

● | fixtures and fittings including computers 4 to 10 years (2020: 4 to 10 years; 2019: 4 to 10 years);

● | motor vehicles 4 years (2020: 4 years; 2019: 4 years);

● | right of use assets 3 to 6 years (determined by lease term); and

● | mine development, infrastructure and other assets in production, units-of-production method.

Depreciation methods, useful lives and residual values are reviewed each financial year and adjusted if appropriate. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Assets under construction’s useful life and residual values will be assessed once the asset is available for use.

(h) | Exploration and evaluation assets

Qualifying exploration costs are capitalised as incurred. Costs incurred before the legal rights to explore are obtained are recognised in profit or loss. The costs related to speculative drilling on unestablished orebodies at the Blanket Mine, general administrative or overhead costs are expensed as incurred. Exploration and evaluation costs capitalised are disclosed under Exploration and evaluation assets. Qualifying direct expenditures include such costs as mineral rights, options to acquire mineral rights, materials used, surveying costs, drilling costs, payments made to contractors, direct administrative costs and depreciation on property, plant and equipment during the exploration phase.

F- 17

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

4 | Significant accounting policies (continued)
(h) | Exploration and evaluation assets (continued)

Costs not directly attributable to exploration and evaluation activities, including general administrative overhead costs, are expensed in the year they occur.

Once the technical feasibility and commercial viability of extracting the mineral resource have been determined, the property is considered to be a mine under development and moved to the mine development, infrastructure and other asset category within property, plant and equipment. Capitalised direct costs related to the acquisition, exploration and development of mineral properties remain capitalized, at their initial cost, until the properties to which they relate are ready for their intended use, sold, abandoned or management has determined there to be impairment. Exploration and evaluation assets are tested for impairment before the assets are transferred to mine development, infrastructure and other assets or when an indicator of impairment is identified.

Exploration and evaluations assets are not depreciated.

(i) | Inventories

Consumable stores are measured at the lower of cost and net realisable value. The cost of consumable stores is based on the weighted average cost principle. It includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. Gold in process is measured at the lower of cost and net realisable value. The cost of gold in process includes an appropriate share of production overheads based on normal operating capacity and is valued on the weighted average cost principle. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(j) | Impairment
i) | Non-derivative financial assets (including receivables)

The Group applies the IFRS 9 simplified model of recognising lifetime expected credit losses for all trade receivables as these items do not have a significant financing component. In measuring the expected credit losses, the trade receivables have been assessed individually as they possess different credit risk characteristics. Trade receivables have been assessed based on the days past due. The expected loss rates are based on the payment profile for gold sales over the past 48 months prior to December 31, of each year reported. The historical rates are adjusted to reflect current and forward looking macroeconomic factors affecting the customer’s ability to settle the amount outstanding. However, given the short period exposed to credit risk the impact of these factors has not been considered significant. Failure to make payments within 90 days from lodgement date with Fidelity Printers and Refiners Limited (“Fidelity”) and failure to engage with the Group on alternative payment arrangement, amongst others, are considered indicators of no reasonable expectation of recovery. Trade and other receivables are written off (i.e. derecognised) when there is no reasonable expectation of recovery.

ii) | Non-financial assets

The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

F- 18

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

4 | Significant accounting policies (continued)
(j) | Impairment (continued)
ii) | Non-financial assets (continued)

For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit” or “CGU”). The Group’s corporate assets do not generate separate cash inflows. If there is an indication that a CGU to which a corporate asset is allocated may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs.

An impairment loss is recognised if the carrying amount of a CGU exceeds its estimated recoverable amount. Impairment losses recognised in respect of CGUs are allocated to reduce the carrying amount of assets in the unit (group of units) on a pro rata basis. Impairment losses recognised in prior years are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been an indication of reversal and a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

iii) | Impairment of Exploration and evaluation (“E&E”) assets

The test for impairment of E&E assets can combine several CGUs as long as the combination is not larger than a segment. The definition of a CGU does, however, change once development activities have begun. There are specific impairment triggers for E&E assets. Despite certain relief in respect of impairment triggers and the level of aggregation, the impairment standard is applied in measuring the impairment of E&E assets. Reversals of impairment losses are required in the event that the circumstances that resulted in impairment have changed.

E&E assets are assessed for impairment only when facts and circumstances suggest that the carrying amount of an E&E asset may exceed its recoverable amount. Indicators of impairment include the following:

| ● | The entity's right to explore in the specific area has expired or will expire in the near future and is not expected to be renewed.

| ● | Substantive expenditure on further E&E activities in the specific area is neither budgeted nor planned in future.

| ● | The entity has not discovered commercially viable quantities of mineral resources as a result of E&E activities in the area to date and has decided to discontinue such activities in the specific area.

| ● | Even if development is likely to proceed, the entity has sufficient data indicating that the carrying amount of the asset is unlikely to be recovered in full from successful development or by sale.

(k) | Employee benefits
i) | Short-term employee benefits

Short-term employee benefits are expensed when the related services are provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

F- 19

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

4 | Significant accounting policies (continued)
(k) | Employee benefits (continued)

ii) | Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution plan that are due more than 12 months after the end of the period in which the employees render the service are discounted to their present value.

(l) | Share-based payment transactions
i) | Equity-settled share-based payments to employees and directors

The grant date fair value of equity-settled share-based payment awards granted to employees and directors is recognised as an expense, with a corresponding increase in equity, over the vesting period of the award. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market vesting conditions at the vesting date.

Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in profit or loss.

ii) | Cash-settled share-based payments to employees and directors

The grant date fair value of cash-settled awards granted to employees and directors is recognised as an expense, with a corresponding increase in the liability, over the vesting period of the awards. At each reporting date the fair value of the awards is re-measured with a corresponding adjustment to profit or loss. Additional information about significant judgements, estimates and the assumptions used to estimate the fair value of cash-settled share-based payment transactions are disclosed in note 12.1.

(m) | Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability if the time value of money is considered significant. The unwinding of the discount is recognised as a finance cost.

F- 20

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

4 | Significant accounting policies (continued)

(n) | Site restoration

The Group recognises liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of property, plant and equipment, when those obligations result from the acquisition, construction, development or normal operation of these assets. The net present value of future rehabilitation cost estimates arising from the decommissioning of plant and other site preparation work is capitalised to mineral properties along with a corresponding increase in the rehabilitation provision in the period incurred. Future rehabilitation costs are discounted using a pre-tax risk-free rate that reflects the time-value of money. The Group’s estimates of rehabilitation costs, which are reviewed annually, could change as a result of changes in regulatory requirements, discount rates, effects of inflation and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to mineral properties with a corresponding entry to the rehabilitation provision.

(o) | Revenue

Revenue from the sale of precious metals is recognized when the metal is accepted at the refinery by Fidelity (“Lodgment date”). Control is transferred and the receipt of proceeds is substantially assured at point of delivery. Revenue for each delivery is measured at the London Base Metal Association Tuesday PM price post-delivery less 1.25% and the quantities are determined on Lodgment date. The revenue amount calculated represents the fair value of the receivable at the date of the transaction. On average settlement occurs within 14 days of delivery.

(p) | Finance income and finance cost

Finance income comprises interest income on funds invested. Finance income is recognised as it accrues in profit or loss, using the effective interest method. Finance cost comprise interest expense on the rehabilitation provisions, interest on bank overdraft balances, effective interest on leases, loans and borrowings and also includes commitment costs on overdraft facilities. Finance cost is recognised in profit or loss using the effective interest rate method and excludes borrowing costs capitalised.

(q) | Taxes
i) | Income tax

Tax expense comprises current and deferred tax. These expenses are recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.

ii) | Current tax

Current tax is the tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date. Current tax includes withholding tax on management fees and dividends paid between companies within the Group.

F- 21

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

4 | Significant accounting policies (continued)
(q) | Taxes (continued)

iii) | Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future.

Deferred tax is a monetary item measured at the tax rates and in the currency that are expected to be applied when temporary differences reverse. The tax and exchange rates are based on the laws that have been enacted, substantively enacted or the interbank exchange rates that prevail at the reporting date.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

(r) | Earnings per share

The Group presents basic and diluted earnings per share (“EPS”) data for its shares. Basic EPS is calculated by dividing the adjusted profit or loss attributable to shareholders of the Group (see note 27) by the weighted average number of shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to shareholders and the weighted average number of shares outstanding, adjusted for own shares held, for the effects of all dilutive potential shares, which comprise share options granted to employees and directors as well as any dilution in Group earnings originating from dilutive partially recognised non-controlling interests at a subsidiary level.

(s) | Borrowing costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.

Other borrowing costs are expensed in the period in which they are incurred and recognised as finance cost.

(t) | Assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held for sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use.

Such assets, or disposal groups, are generally measured at the lower of their carrying amount or fair value less costs to sell. Impairment losses on initial classification as held for sale or held for distribution and subsequent gains and losses on remeasurement are recognised in profit or loss.

Once classified as held for sale property, plant and equipment are no longer depreciated.

F- 22

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

4 | Significant accounting policies (continued)

(u) | The following standards, amendments to standards and interpretations to existing standards may possibly have an impact on the Group:

Standard/ Interpretation | Effective date and expected adoption date*
IAS 1 | In response to feedback and enquiries from stakeholders, in December 2020, the IFRS Interpretations Committee (IFRIC) issued a Tentative Agenda Decision, analysing the applicability of the amendments to three scenarios. However, given the comments received and concerns raised on some aspects of the amendments, in April 2021, IFRIC decided not to finalise the agenda decision and referred the matter to the IASB. In its June 2021 meeting, the IASB tentatively decided to amend the requirements of IAS 1 with respect to the classification of liabilities subject to conditions and disclosure of information about such conditions and to defer the effective date of the 2020 amendment by at least one year. | January 1, 2023
IAS 16 | The amendment to IAS 16 Property, Plant and Equipment (“PPE”) prohibits an entity from deducting from the cost of an item of PPE any proceeds received from selling items produced while the entity is preparing the asset for its intended use. It also clarifies that an entity is ‘testing whether the asset is functioning properly’ when it assesses the technical and physical performance of the asset. The financial performance of the asset is not relevant to this assessment. The amounts of proceeds and costs relating to items produced that are not an output of the entity’s ordinary activities must be disclosed separately. | January 1, 2022
IAS 37 | Amendments to IAS 37 Provision, Contingent Liabilities and Contingent Assets clarifies the Onerous contracts – Cost of Fulfilling a Contract. The amendments specify which costs an entity includes in determining the cost of fulfilling a contract to assess whether the contract is onerous. The amendments apply to contracts existing at the date when the amendments are first applied. At the initial application date, the cumulative effect of applying the amendments is recognised as an opening balance adjustment to retained earnings or other components of equity, as appropriate. | January 1, 2022

F- 23

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

4 | Significant accounting policies (continued)

(u) | The following standards, amendments to standards and interpretations to existing standards may possibly have an impact on the Group: (continued)

Standard/ Interpretation | Effective date and expected adoption date*
Annual Improvements to IFRS Standards 2018–2020 | The following improvements were finalised in May 2020: ● IFRS 9 Financial Instruments – clarifies which fees should be included in the 10% test for derecognition of financial liabilities. ● IFRS 16 Leases – amendment of illustrative example 13 to remove the illustration of payments from the lessor relating to leasehold improvements, to remove any confusion about the treatment of lease incentives. | January 1, 2022
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2 | The IASB amended IAS 1 to require entities to disclose their material rather than their significant accounting policies. The amendments define what is ‘material accounting policy information’ and explain how to identify when accounting policy information is material. They further clarify that immaterial accounting policy information does not need to be disclosed. If it is disclosed, it should not obscure material accounting information. To support this amendment, the IASB also amended IFRS Practice Statement 2 Making Materiality Judgements to provide guidance on how to apply the concept of materiality to accounting policy disclosures. | January 1, 2023

F- 24

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

4 | Significant accounting policies (continued)

(u) | The following standards, amendments to standards and interpretations to existing standards may possibly have an impact on the Group: (continued)

Deferred tax related to assets and liabilities arising from a single transaction – Amendments to IAS 12 | The amendments to IAS 12 Income Taxes require companies to recognise deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. They will typically apply to transactions such as leases of lessees and decommissioning obligations and will require the recognition of additional deferred tax assets and liabilities. The amendment should be applied to transactions that occur on or after the beginning of the earliest comparative period presented. In addition, entities should recognise deferred tax assets (to the extent that it is probable that they can be utilised) and deferred tax liabilities at the beginning of the earliest comparative period for all deductible and taxable temporary differences associated with: ● right-of-use assets and lease liabilities, and ● decommissioning, restoration and similar liabilities, and the corresponding amounts recognised as part of the cost of the related assets. The cumulative effect of recognising these adjustments is recognised in retained earnings, or another component of equity, as appropriate. IAS 12 did not previously address how to account for the tax effects of on-balance sheet leases and similar transactions and various approaches were considered acceptable. | January 1, 2023

* Annual periods ending on or after.

The Group has completed its assessment of the impact of the above standards and concluded that the standard amendments would not have a material impact on the consolidated financial statements.

New standards, amendments to standards and interpretations adopted from 1 January 2021 had no significant effect on the Group’s accounting policies.

F-25

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

5 | Blanket Zimbabwe Indigenisation Transaction

On February 20, 2012 the Group announced it had signed a Memorandum of Understanding (“MoU”) with the Minister of Youth, Development, Indigenisation and Empowerment of the Government of Zimbabwe pursuant to which the Group agreed that indigenous Zimbabweans would acquire an effective 51% ownership interest in the Zimbabwean company owning the Blanket Mine (also referred to herein as “Blanket” or “Blanket Mine” as the context requires) for a paid transactional value of $30.09 million. Pursuant to the above, members of the Group entered into agreements with each indigenous shareholder to transfer 51% of the Group’s ownership interest in Blanket Mine whereby it:

• | sold a 16% interest to the National Indigenisation and Economic Empowerment Fund (“NIEEF”) for $11.74 million;
• | sold a 15% interest to Fremiro Investments (Private) Limited (“Fremiro”), which is owned by indigenous Zimbabweans, for $11.01 million;
• | sold a 10% interest to Blanket Employee Trust Services (Private) Limited (“BETS”) for the benefit of present and future managers and employees for $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; and
• | donated a 10% ownership interest to the Gwanda Community Share Ownership Trust (“Community Trust”). In addition, Blanket Mine paid a non-refundable donation of $1 million to the Community Trust.

The Group facilitated the vendor funding of these transactions which is 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. Following a modification to the interest rate on June 23, 2017, outstanding balances on these facilitation loans attract interest at a rate of the lower of a fixed 7.25% per annum payable quarterly or 80% of the Blanket Mine dividend in the quarter. The timing of the loan repayments depends on the future financial performance of Blanket Mine and the extent of future dividends declared by Blanket Mine. The Group related facilitation loans were transferred as dividends in specie intra-group and now the loans and most of the interest thereon is payable to the Company.

Accounting treatment

The directors of Caledonia Holdings Zimbabwe (Private) Limited (“CHZ”), a wholly-owned subsidiary of the Company, performed a reassessment using the requirements of IFRS 10: Consolidated Financial Statements (IFRS 10). It was concluded that CHZ should continue to consolidate Blanket Mine after the indigenisation. The subscription agreements with the indigenous shareholders have been accounted for accordingly as a transaction with non-controlling interests and as a share-based payment transaction.

F- 26

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

5 | Blanket Zimbabwe Indigenisation Transaction (continued)

Accounting treatment (continued)

The subscription agreements, concluded on February 20, 2012, were accounted for as follows:

• | Non-controlling interests (“NCI”) were recognised on the portion of shareholding upon which dividends declared by Blanket Mine will accrue unconditionally to equity holders as follows:
| (a) 20% of the 16% shareholding of NIEEF;
| (b) 20% of the 15% shareholding of Fremiro; and
| (c) 100% of the 10% shareholding of the Community Trust.
• | This effectively means that NCI was initially recognised at 16.2% of the net assets of Blanket Mine, until the completion of the transaction with Fremiro, whereby the NCI reduced to 13.2% (see below).
• | The remaining 80% of the shareholding of NIEEF and Fremiro was recognised as NCI 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 December 31, 2021 the attributable net asset value did not exceed the balance on the respective loan account and thus no additional NCI was recognised.
• | The transaction with 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 exceeds the balance on the BETS facilitation loan, they will accrue to the employees at the date of such declaration.
• | BETS is an entity 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.

Fremiro purchase agreement

On November 5, 2018 the Company and Fremiro entered into a sale agreement for Caledonia to purchase Fremiro’s 15% shareholding in Blanket Mine. On January 20, 2020 all substantive conditions to the transaction were satisfied. The Company issued 727,266 shares to Fremiro for the cancellation of their facilitation loan and purchase of Fremiro’s 15% shareholding in Blanket Mine. The transaction was accounted for as a repurchase of a previously vested equity instrument. As a result, the Fremiro share of the NCI of $3,600 was derecognised, shares were issued at fair value, the share-based payment reserve was reduced by $2,247 and the Company’s shareholding in Blanket Mine increased to 64% on the effective date.

Blanket Mine’s indigenisation shareholding percentages and facilitation loan balances

|  |  |  |  | Effective interest & |  |  | NCI subject to |  |  | Balance of facilitation loan # |
USD |  |  | Shareholding |  |  |  | NCI recognised |  |  |  | facilitation loan |  |  | December 31, 2021 |  |  | December 31, 2020 |
NIEEF |  |  | 16 | % |  |  | 3.2 | % |  |  | 12.8 | % |  |  | 10,359 |  |  |  | 11,728 |
Community Trust |  |  | 10 | % |  |  | 10.0 | % |  |  | 0.0 | % |  |  | – |  |  |  | – |
BETS ~ |  |  | 10 | % |  |  | 2.0 | % |  |  | 0.0 | % |  |  | 6,353 |  |  |  | 7,447 |
|  |  | 36 | % |  |  | 15.2 | % |  |  | 12.8 | % |  |  | 16,712 |  |  |  | 19,175 |

* 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.

F- 27

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

5 | Blanket Zimbabwe Indigenisation Transaction (continued)

Blanket Mine’s indigenisation shareholding percentages and facilitation loan balances (continued)

The balance on the facilitation loans is reconciled as follows:

|  | 2021 |  |  | 2020 |
Balance at January 1 |  |  | 19,175 |  |  |  | 30,974 |
Cancellation of Fremiro loan |  |  | – |  |  |  | (11,458 | )
Finance cost accrued |  |  | 1,313 |  |  |  | 1,396 |
Dividends used to repay loan |  |  | (3,776 | ) |  |  | (1,737 | )
Balance at December 31 |  |  | 16,712 |  |  |  | 19,175 |

Advance dividend loans and balances

In anticipation of completing the underlying subscription agreements, Blanket Mine agreed to advance dividend arrangements with NIEEF and the Community Trust. Advances made to the Community Trust against their right to receive dividends declared by Blanket Mine on their shareholding were as follows:

| • | a $2 million payment on or before September 30, 2012;

| • | a $1 million payment on or before February 28, 2013; and

| • | a $1 million payment on or before April 30, 2013.

These advance payments were debited to a loan account bearing interest at a rate at the lower of a fixed 7.25% per annum, payable quarterly or the Blanket Mine dividend in the quarter to the advanced dividend loan holder. The loan is repayable by way of set-off of future dividends on the Blanket Mine shares owned by the Community Trust. Advances made to NIEEF as an advanced dividend loan before 2013 have been settled through Blanket Mine dividend repayments in 2014. The advance dividend payments were recognised as distributions to shareholders and they are classified as equity instruments. The loans arising are not recognised as loans receivables, because repayment is by way of uncertain future dividends. The final payment to settle the advance dividend loan to the Community Trust was made on September 22, 2021. Future dividends to the Community Trust will be unencumbered.

Amendments to advanced dividend loan agreements

Advance dividend loan modification - Community Trust

On February 27, 2020, the Group, Blanket Mine and the indigenous shareholders of Blanket Mine reached an agreement to change the repayment terms of the advance dividend loan to the Community Trust. The amendment allowed that 20% of the Community Trust share of the Blanket dividend accrues on declaration of the dividend and that the remaining 80% be applied to the advance dividend loan from February 27, 2020. The modification was not considered beneficial to the indigenous shareholders.

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

|  | 2021 |  |  | 2020 |
Balance at January 1 |  |  | 994 |  |  |  | 1,632 |
Finance cost accrued |  |  | 29 |  |  |  | 98 |
Dividends used to repay advance dividend loan |  |  | (1,023 | ) |  |  | (736 | )
Balance at December 31 |  |  | – |  |  |  | 994 |

F-28

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

6 | Capital management

When managing capital, the Group’s objectives are to safeguard its ability to continue as a going concern in order to pursue the mining operations and exploration potential of the mineral properties. The Group’s capital includes shareholders’ equity, comprising issued share capital, reserves, accumulated other comprehensive income, accumulated deficit, bank financing (refer to notes 22 and 30) and non-controlling interests.

|  | 2021 |  |  | 2020 |
Total equity |  |  | 180,556 |  |  |  | 158,043 |

The Group’s primary objective regarding its capital management is to ensure that it has sufficient cash resources to maintain its on-going operations, provide returns for shareholders, accommodate any rehabilitation provisions and pursue growth opportunities. It assesses its short term needs and funds these by available cash, overdrafts and short to medium term loans. Capital requirements for future project are evaluated on a case-by-case basis. As at December 31, 2021, there has been no change with respect to the overall capital risk management strategy.

7 | Revenue

|  | 2021 |  |  | 2020 |  |  | 2019 |
Revenue |  |  | 121,329 |  |  |  | 100,002 |  |  |  | 75,826 |
Total ounces sold |  |  | 68,617 |  |  |  | 57,137 |  |  |  | 54,801 |
Work in progress and refinery |  |  | (1,141 | ) |  |  | 762 |  |  |  | 381 |
Gold produced (oz) |  |  | 67,476 |  |  |  | 57,899 |  |  |  | 55,182 |
Tonnes milled |  |  | 665,628 |  |  |  | 597,962 |  |  |  | 556,331 |
Grade |  |  | 3.36 |  |  |  | 3.21 |  |  |  | 3.31 |
Recovery |  |  | 93.9 |  |  |  | 93.8 |  |  |  | 93.4 |
Realised gold price ($/oz) |  |  | 1,766 |  |  |  | 1,749 |  |  |  | 1,382 |

8 | Production costs

|  | 2021 |  |  | 2020 |  |  | 2019 |
Salaries and wages |  |  | 20,515 |  |  |  | 15,811 |  |  |  | 13,782 |
Consumable materials – Operations |  |  | 17,288 |  |  |  | 14,358 |  |  |  | 12,850 |
Consumable materials – COVID-19 |  |  | 297 |  |  |  | 824 |  |  |  | – |
Electricity costs |  |  | 10,363 |  |  |  | 8,071 |  |  |  | 6,319 |
Safety |  |  | 774 |  |  |  | 708 |  |  |  | 525 |
Cash-settled share-based expense (note 12.1(a)) |  |  | 692 |  |  |  | 634 |  |  |  | 107 |
Gold work in progress |  |  | 243 |  |  |  | 1,166 |  |  |  | 376 |
On mine administration |  |  | 2,650 |  |  |  | 1,766 |  |  |  | 2,140 |
Pre-feasibility exploration costs |  |  | 304 |  |  |  | 373 |  |  |  | 301 |
|  |  | 53,126 |  |  |  | 43,711 |  |  |  | 36,400 |

F-29

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

9 | Other income

|  | 2021 |  |  | 2020 |  |  | 2019 |
Government grant – Gold sale export credit incentive |  |  | - |  |  |  | 4,695 |  |  |  | 866 |
Government grant – Gold support price |  |  | - |  |  |  | - |  |  |  | 1,064 |
Other |  |  | 46 |  |  |  | 70 |  |  |  | 94 |
Greenstone Retirement Fund pay-out |  |  | - |  |  |  | - |  |  |  | 250 |
|  |  | 46 |  |  |  | 4,765 |  |  |  | 2,274 |

Government grant – Gold sale export credit incentive

The Reserve Bank of Zimbabwe (“RBZ”) first announced an export credit incentive (“ECI”) on the gold proceeds received for all large-scale gold mine producers during 2016. The ECI is calculated as a percentage of the gold proceeds less the charges of Fidelity.

The below table indicates when the ECI was applicable and the percentages granted, as announced by the Zimbabwean Government:

ECI applicable periods |  | Percentage |
May 1, 2016 – December 31, 2017 |  |  | 3.5 | %
January 1, 2018 – January 31, 2018 |  |  | 2.5 | %
February 1, 2018 – February 20, 2019 |  |  | 10 | %
February 21, 2019 – March 9, 2020 |  |  | 0 | %
March 10, 2020 – June 26, 2020 |  |  | 25 | %

All incentives granted by the Zimbabwean Government were included in other income when determined receivable. Incentives were received in Blanket Mine’s RTGS$ account. The ECI fell away after June 26, 2020.

10 | Other expenses

|  | 2021 |  |  | 2020 |  |  | 2019 |
Intermediated Money Transaction Tax |  |  | 799 |  |  |  | 451 |  |  |  | 354 |
Solar evaluation cost * |  |  | – |  |  |  | 230 |  |  |  | 160 |
COVID-19 donations |  |  | 74 |  |  |  | 1,322 |  |  |  | – |
Community and social responsibility cost |  |  | 1,167 |  |  |  | 382 |  |  |  | – |
Other |  |  | – |  |  |  | – |  |  |  | 8 |
Impairment of property, plant and equipment - plant and equipment (note 18) |  |  | 498 |  |  |  | – |  |  |  | 144 |
Impairment of exploration and evaluation assets (note 19) |  |  | 3,837 |  |  |  | 2,930 |  |  |  | – |
Expected credit losses on deferred consideration on the disposal of subsidiary (notes 23.2 and 24) |  |  | 761 |  |  |  | – |  |  |  | – |
|  |  | 7,136 |  |  |  | 5,315 |  |  |  | 666 |

* | Capitalised from July 6, 2020, refer to note 18.

F-30

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

11 | Administrative expenses

| 2021 | 2020 | 2019
Investor relations | 439 | 353 | 414
Audit fee | 267 | 288 | 237
Advisory services fees | 622 | 904 | 408
Listing fees | 609 | 448 | 277
Directors fees – Company | 527 | 323 | 240
Directors fees – Blanket | 51 | 43 | 31
Employee costs | 5,462 | 4,065 | 3,030
Other office administration cost | 347 | 424 | 605
Management liability insurance | 551 | 1,032 | 86
Travel costs | 216 | 117 | 292
Eersteling Gold Mine administration costs | – | – | 17
| 9,091 | 7,997 | 5,637

12 | Share-based payments
12.1 | Cash-settled share-based payments

The Group has expensed the following cash-settled share-based expense arrangements for the twelve months ended December 31:

| Note |  | 2021 |  |  | 2020 |  |  | 2019 |
Restricted Share Units and Performance Units | 12.1(a) |  |  | 515 |  |  |  | 1,299 |  |  |  | 616 |
Caledonia Mining South Africa employee incentive scheme | 12.1(b) |  |  | (38 | ) |  |  | 114 |  |  |  | 73 |
|  |  |  | 477 |  |  |  | 1,413 |  |  |  | 689 |

(a) | Restricted Share Units and Performance Units

Certain management and employees within the Group are granted Restricted Share Units (“RSUs”) and Performance Units (”PUs”) pursuant to provisions of the 2015 Omnibus Equity Incentive Compensation Plan (“OEICP”). All RSUs and PUs were granted and approved at the discretion of the Compensation Committee of the Board of Directors.

RSUs vest three years after grant date given that the service conditions of the relevant employees have been fulfilled. The value of the vested RSUs is the number of RSUs vested multiplied by the fair market value of the Company’s shares, as specified by the OEICP, on the date of settlement.

PUs have a performance condition based on gold production and a performance period of one up to three years. The number of PUs that vest will be the relevant portion of the PUs granted multiplied by the performance multiplier, which will reflect the actual performance in terms of the performance conditions compared to expectations on the date of the award.

RSU holders are entitled to receive dividends over the vesting period. Such dividends will be reinvested in additional RSUs at the then applicable share price. PUs have rights to dividends only after they have vested.

RSUs and PUs allow for settlement of the vesting date value in cash or, subject to conditions, shares issuable at fair market value or a combination of both at the discretion of the unitholder.

F- 31

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

12 | Share-based payments (continued)
12.1 | Cash-settled share-based payments (continued)
(a) | Restricted Share Units and Performance Units (continued)

The fair value of the RSUs at the reporting date was based on the Black Scholes option valuation model less the fair value of the expected dividends during the vesting period multiplied by the performance multiplier expectation. At the reporting date it was assumed that there is a 93%-100% probability that the performance conditions will be met and therefore a 93%-100% (2020: 93%-100%) average performance multiplier was used in calculating the estimated liability. The fair value of the PUs at the reporting date was based on the Black Scholes option valuation model. The liability as at December 31, 2021 amounted to $3,027 (2020: $2,240). Included in the liability as at December 31, 2021 is an amount of $692 (2020: $634; 2019: $107) that was expensed and classified as production costs; refer to note 8. During the year PUs to the value of $420 vested and were settled in cash (2020: $216 issued as share capital).

The following assumptions were used in estimating the fair value of the cash-settled share-based payment liability on:

|  | December 31, |  |  | December 31, |
|  | 2021 |  |  | 2020 |
|  | RSUs |  |  | PUs |  |  | RSUs |  |  | PUs |
Risk free rate |  |  | 1.52 | % |  |  | 1.52 | % |  |  | 0.93 | % |  |  | 0.93 | %
Fair value (USD) |  |  | 12.06 |  |  |  | 11.63 |  |  |  | 15.88 |  |  |  | 15.51 |
Share price (USD) |  |  | 11.71 |  |  |  | 11.71 |  |  |  | 15.88 |  |  |  | 15.88 |
Performance multiplier percentage |  |  | – |  |  |  | 93-100 | % |  |  | – |  |  |  | 93-100 | %
Volatility |  |  | 1.20 |  |  |  | 1.06 |  |  |  | 1.00 |  |  |  | 1.06 |

Share units granted: |  | RSUs |  |  | PUs |  |  | RSUs |  |  | PUs |
Grant - January 11, 2019 |  |  | – |  |  |  | 95,740 |  |  |  | – |  |  |  | 95,740 |
Grant - March 23, 2019 |  |  | – |  |  |  | 28,287 |  |  |  | – |  |  |  | 28,287 |
Grant - June 8, 2019 |  |  | – |  |  |  | 14,672 |  |  |  | – |  |  |  | 14,672 |
Grant - January 11, 2020 |  |  | 17,585 |  |  |  | 114,668 |  |  |  | 17,585 |  |  |  | 114,668 |
Grant - March 31, 2020 |  |  | – |  |  |  | 1,971 |  |  |  | – |  |  |  | 1,971 |
Grant - June 1, 2020 |  |  | – |  |  |  | 1,740 |  |  |  | – |  |  |  | 1,740 |
Grant - September 9, 2020 |  |  | – |  |  |  | 1,611 |  |  |  | – |  |  |  | 1,611 |
Grant - September 14, 2020 |  |  | – |  |  |  | 20,686 |  |  |  | – |  |  |  | 20,686 |
Grant - October 5, 2020 |  |  | – |  |  |  | 514 |  |  |  | – |  |  |  | 514 |
Grant - January 11, 2021 |  |  | – |  |  |  | 78,875 |  |  |  | – |  |  |  | – |
Grant -April 1, 2021 |  |  | – |  |  |  | 770 |  |  |  | – |  |  |  | – |
Grant - May 14, 2021 |  |  | – |  |  |  | 2,389 |  |  |  | – |  |  |  | – |
Grant - June 1, 2021 |  |  | – |  |  |  | 1,692 |  |  |  | – |  |  |  | – |
Grant - June 14, 2021 |  |  | – |  |  |  | 507 |  |  |  | – |  |  |  | – |
Grant - August 13, 2021 |  |  | – |  |  |  | 2,283 |  |  |  | – |  |  |  | – |
Grant - September 1, 2021 |  |  | – |  |  |  | 553 |  |  |  | – |  |  |  | – |
Grant - September 6, 2021 |  |  | – |  |  |  | 531 |  |  |  | – |  |  |  | – |
Grant - September 20, 2021 |  |  | – |  |  |  | 526 |  |  |  | – |  |  |  | – |
Grant - October 1, 2021 |  |  | – |  |  |  | 2,530 |  |  |  | – |  |  |  | – |
Grant - October 11, 2021 |  |  | – |  |  |  | 500 |  |  |  | – |  |  |  | – |
Grant - November 12, 2021 |  |  | – |  |  |  | 1,998 |  |  |  | – |  |  |  | – |
Grant - December 1, 2021 |  |  | – |  |  |  | 936 |  |  |  | – |  |  |  | – |
RSU dividends reinvested |  |  | 1,066 |  |  |  | – |  |  |  | 386 |  |  |  | – |
Settlements/ terminations |  |  | - |  |  |  | (30,600 | ) |  |  | – |  |  |  | – |
Total awards |  |  | 18,651 |  |  |  | 343,379 |  |  |  | 17,971 |  |  |  | 279,889 |

F- 32

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

12 | Share-based payments (continued)
12.1 | Cash-settled share-based payments (continued)

(b) | Caledonia Mining South Africa employee incentive scheme

From 2017 until 2019 Caledonia Mining South Africa Proprietary Limited granted awards to certain of its employees that entitles them to a cash pay-out at the Company’s share price on November 30 of each year over a 3-year period from the grant date. The cash-settled share-based payment liability was calculated based on the number of awards expected to vest multiplied by the Company’s Black Scholes option valuation fair value of £8.90 at the reporting date and apportioned for the quantity vested over the total vesting period. The liability relating to these cash-settled share-based payment awards amounted to $Nil ( December 31, 2020: $30) and the fair value adjustment included in the consolidated financial statements of profit or loss and other comprehensive income amounted to ($38) (2020: $114) for the twelve months ended December 31, 2021.

During September 2020 it was communicated to employees of Caledonia Mining South Africa Proprietary Limited that going forwards they will receive awards of PUs under the OEICP, and so a discretionary 10% cash bonus scheme would gradually replace the current cash-settled share-based scheme and no more awards would be made under the cash-settled share-based scheme. To the extent their cash-settled share-based payments fall short of the cash bonus, they would receive the amount equal to the awards. All awards vested or expired by year-end. No new awards were granted.

The following assumptions were used in estimating the fair value of the cash-settled share-based payment liability for the year ended December 31.

|  | 2021 |  |  | 2020 |
|  | Awards |
Grant – August 2018 (3-year term) |  |  | 5,918 |  |  |  | 5,918 |
Grant - August 2019 (3-year term) |  |  | 9,034 |  |  |  | 9,034 |
Awards paid out/ expired |  |  | (14,952 | ) |  |  | (11,941 | )
Total awards outstanding |  |  | – |  |  |  | 3,011 |
Estimated awards expected to vest |  |  | 100 | % |  |  | 100 | %

13 | Net foreign exchange gain

On October 1, 2018 the RBZ issued a directive to Zimbabwean banks to separate foreign currency from RTGS$ in the accounts held by their clients and pegged the RTGS$ at 1:1 to the US Dollars. On February 20, 2019 the RBZ issued a further monetary policy statement, which allowed inter-bank trading between RTGS$ and foreign currency. The interbank rate was introduced at 2.5 RTGS$ to 1 US Dollars and traded at 108.67 RTGS$ to 1 US Dollars as at December 31, 2021 ( December 31, 2020: 81.79 RTGS$). On June 24, 2019 the Government issued S.I. 142 which stated, “Zimbabwe dollar (“RTGS$”) to be the sole currency for legal tender purposes for any transactions in Zimbabwe”. Throughout these announcements and to the date of issue of these financial statements the US dollar has remained the primary currency in which the Group’s Zimbabwean entities operate and the functional currency of these entities.

Previously there was uncertainty as to what currency would be used to settle amounts owed to the Zimbabwe Government. The announcement of S.I. 142 clarified the Zimbabwean Government’s intentions that these liabilities were always denominated in RTGS$ and that RTGS$ would be the currency in which they would be settled. The devaluation of the deferred tax and electricity liabilities contributed the largest portion of the foreign exchange gain set out below.

F- 33

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

13 | Net foreign exchange gain (continued)

In June 2021 the RBZ announced that companies that are listed on the VFEX will receive 100% of the revenue arising from incremental production in US Dollars. Blanket has subsequently received confirmation that the “baseline” level of production for the purposes of calculating incremental production is 148.38 Kg per month (approximately 57,000 ounces per annum). The payment of the increased US Dollars proceeds for incremental production was applied from July 1, 2021 and Blanket has received all amounts due in terms of this revised policy up to the date of approval of these financial statements. The CMCL listing on the VFEX should mean that Blanket will receive approximately 71.5% of its total revenues in US Dollars and the balance in RTGS$.

The table below illustrates the effect the weakening of the RTGS$ and other foreign currencies had on the consolidated statement of profit or loss and other comprehensive income.

|  | 2021 |  |  | 2020 |  |  | 2019 |
Unrealised foreign exchange gain |  |  | 2,755 |  |  |  | 8,367 |  |  |  | 31,411 |
Realised foreign exchange loss |  |  | (1,571 | ) |  |  | (4,062 | ) |  |  | (1,750 | )
Net foreign exchange gain |  |  | 1,184 |  |  |  | 4,305 |  |  |  | 29,661 |

14 | Derivative financial instruments

The fair value of derivative financial instruments not traded in an active market is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where available. The company did not apply hedge accounting to the derivative financial instruments and all fair value losses were recorded in the consolidated statement of profit or loss and other comprehensive income.

|  |  |  |  |  | 2021 |  |  | 2020 |  |  | 2019 |
Fair value losses on derivative financial assets |  |  | 14.1 |  |  |  |  |  |  |  |  |  |  |  |  |
Gold ETF |  |  |  |  |  |  | 105 |  |  |  | 164 |  |  |  | – |
Gold hedge |  |  |  |  |  |  | – |  |  |  | 102 |  |  |  | 601 |
|  |  |  |  |  |  | 105 |  |  |  | 266 |  |  |  | 601 |
Fair value losses on derivative financial liabilities |  |  | 14.2 |  |  |  |  |  |  |  |  |  |  |  |  |
Gold loan |  |  |  |  |  |  | 114 |  |  |  | – |  |  |  | – |
Call option |  |  |  |  |  |  | 21 |  |  |  | – |  |  |  | – |
|  |  |  |  |  |  | 135 |  |  |  | – |  |  |  | – |
Fair value losses on derivative financial instruments |  |  |  |  |  |  | 240 |  |  |  | 266 |  |  |  | 601 |

14.1 | Derivative financial assets

| 2021 | 2020
Derivatives assets: |  |  |  |
Gold exchange-traded fund ("Gold ETF") |  | – |  | 1,184
Gold hedge |  | – |  | –
|  | – |  | 1,184

F- 34

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

14 | Derivative financial instruments (continued)
14.1 | Derivative financial assets (continued)

Gold ETF

In April 2020 the South African subsidiary, Caledonia Mining South Africa Proprietary Limited, purchased a Gold ETF from Standard Bank Limited at a cost of $1,058. The Gold ETF is denominated in South African Rand and the instrument is utilised to invest excess short-term Rands on hand at the South African subsidiary. The Gold ETF’s value tracks the US Dollars spot gold price and was entered into to offset fluctuations in the South African Rand against the US Dollars. The total expense, representing the change in the Rand tracked USD spot gold price, amounted to $105 (2020: $164) for the twelve months ended December 31, 2021. Foreign currency translation gains, due to the fluctuations in the Rand against the US Dollars on the translation of the foreign subsidiary, amounted to ($14) (2020: $100). On May 5, 2021 the Gold ETF was realised for $1,066.

Gold hedge

The Company entered into a hedge in November 2019 at a cost of $379. The hedge was in the form of put options in respect of 4,600 ounces of gold per month for the period January to June 2020 exercisable at a strike price of $1,400 per ounce. At December 31, 2020 the mark-to-market valuation, that represents the fair value of the hedge, amounted to $102. The put options were entered into by the Company for economic hedging purposes to ensure sufficient cash availability for Blanket Mine’s capital investment plan, rather than as a speculative investment. The hedge expired on June 30, 2020.

The Gold ETF and Gold hedge were classified under level 1 of the fair value hierarchy.

14.2 | Derivative financial liabilities

Changes in fair value are recorded on a mark to market basis and recorded as financial liabilities. The table below summarizes the fair value movements in derivative liabilities:

|  | 2021 |  |  | 2020 |  |  | 2019 |
Gold loan – increase in liability |  |  | 114 |  |  |  | – |  |  |  | – |
Call option – increase in liability |  |  | 21 |  |  |  | – |  |  |  | – |
|  |  | 135 |  |  |  | – |  |  |  | – |

The table below summarizes the derivative financial liabilities balances as at December 31:

|  | 2021 |  |  | 2020 |
Derivative liabilities: |  |  |  |  |  |  |  |
Gold loan |  |  | 2,866 |  |  |  | – |
Call option |  |  | 229 |  |  |  | – |
|  |  | 3,095 |  |  |  | – |

F- 35

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

14 | Derivative financial instruments (continued)
14.2 | Derivative financial liabilities (continued)

Gold loan and call option

On December 13, 2021 the Company entered into two separate gold loan and option agreements with Auramet International LLC (“Auramet”).

In terms of the agreements the Group:

| ● | received $3 million less transaction costs from Auramet at inception of the Gold loan agreement;

| ● | is required to make two deliveries of 925 ounces each on May 31, 2022 and June 30, 2022 in repayment of the Gold loan or pay the equivalent in cash; and

| ● | granted call options on 6,000 ounces to Auramet with a strike price of $2,000 per ounce, expiring monthly in equal monthly tranches from June 30, 2022 to November 30,2022.

Accounting for the Gold loan and the Call option transactions:

| ● | At inception the fair value of the Gold loan was calculated at the amount received less the fair value of the Call option.

| ● | As at December 31, 2021 the fair value of the gold loan was calculated by discounting the fair value of the gold deliveries at a forward rate of $1,833 due by a market related discount rate.

| ● | At inception and at December 31, 2021 the Call options were valued at the quoted prices available from the CME Group Inc. at each respective date.

| ● | Differences in the fair values were accounted for as Fair value losses on derivative financial instruments in the consolidated statement of profit or loss and other comprehensive income.

| ● | The Call option was classified as level 1 in the fair value hierarchy and the Gold loan as level 2.

| ● | Derivative liabilities are not designated as hedging instruments.

Proceeds received under the Gold loan and Option agreements were allocated as follows:

December 13, 2021 |  |  |  |
Gross proceeds |  |  | 3,000 |
Transaction cost |  |  | (40 | )
Net proceeds received |  |  | 2,960 |
Fair value of Call options |  |  | 208 |
Fair value of Gold loan |  |  | 2,752 |
December 31, 2021 |  |  |  |
Fair value of Call options |  |  | 229 |
Fair value of Gold loan |  |  | 2,866 |

F-36

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

15 | Leases

Leases as lessee

The Group leases administrative offices. The leases, which the Group normally enters into, typically run for a period of 3 to 6 years, with an option to renew the lease after that date. Two leases for the administrative offices expire in 2024 and one lease in 2025.

Information about leases for which the Group is a lessee is presented below.

i) | Amounts recognised in the statement of financial position

Right of use assets

Right of use assets related to leased properties are presented as part of property, plant and equipment (refer note 18).

|  | 2021 |  |  | 2020 |
Balance at January 1 |  |  | 229 |  |  |  | 337 |
Depreciation |  |  | (115 | ) |  |  | (99 | )
Additions to right of use assets |  |  | 527 |  |  |  | - |
Derecognition of right of use assets |  |  | (172 | ) |  |  | - |
Foreign currency movement |  |  | (22 | ) |  |  | (9 | )
Balance at December 31 |  |  | 447 |  |  |  | 229 |

Lease liabilities

|  | 2021 |  |  | 2020 |
Balance at January 1 |  |  | 239 |  |  |  | 349 |
Additions to lease liability |  |  | 527 |  |  |  | - |
Finance cost |  |  | 24 |  |  |  | 15 |
Lease payments |  |  | (129 | ) |  |  | (118 | )
Foreign currency movement |  |  | (23 | ) |  |  | (7 | )
Derecognition of lease liability |  |  | (173 | ) |  |  | - |
Balance at December 31 |  |  | 465 |  |  |  | 239 |

ii) | Amounts recognised in profit or loss

|  | 2021 |  |  | 2020 |  |  | 2019 |
Finance cost on lease liabilities |  |  | 24 |  |  |  | 15 |  |  |  | 17 |
Unrealised foreign exchange gain |  |  | 1 |  |  |  | (2 | ) |  |  | 4 |
Depreciation |  |  | 115 |  |  |  | 99 |  |  |  | 112 |
|  |  | 140 |  |  |  | 112 |  |  |  | 133 |

iii) | Amounts recognised in statement of cash flows

|  | 2021 |  |  | 2020 |  |  | 2019 |
Total cash outflow for leases - principal |  |  | 129 |  |  |  | 118 |  |  |  | 124 |
Total cash outflow for leases - finance cost |  |  | (24 | ) |  |  | (15 | ) |  |  | (17 | )

F- 37

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

15 | Leases (continued)

iv) | Lease payments

Lease payments payable on leases of right of use assets are as follows:

|  | 2021 |  |  | 2020 |
Less than one year |  |  | 158 |  |  |  | 61 |
One to two years |  |  | 165 |  |  |  | 46 |
Two to three years |  |  | 163 |  |  |  | 46 |
Three to four years |  |  | 46 |  |  |  | 46 |
Four to five years |  |  | – |  |  |  | 40 |
|  |  | 532 |  |  |  | 239 |

16 | Finance income and finance cost

|  | 2021 |  |  | 2020 |  |  | 2019 |
Finance income received - Bank |  |  | 14 |  |  |  | 62 |  |  |  | 146 |
Finance cost - Term loan (note 30) |  |  | 56 |  |  |  | 386 |  |  |  | 165 |
Finance cost - Capitalised to property, plant and equipment (note 18) |  |  | (17 | ) |  |  | (53 | ) |  |  | (165 | )
Unwinding of rehabilitation provision (note 29) |  |  | – |  |  |  | 2 |  |  |  | 20 |
Finance cost - Leases (note 15) |  |  | 24 |  |  |  | 15 |  |  |  | 17 |
Finance cost - Overdraft |  |  | 86 |  |  |  | 17 |  |  |  | 307 |
ZESA interest * |  |  | 226 |  |  |  | – |  |  |  | – |
|  |  | 375 |  |  |  | 367 |  |  |  | 344 |

* | During the period from January 2021 to March 2021 it was unclear in what currency the monthly payments to the Zimbabwe Electricity Supply Authority (“ZESA”) had to be made. In April 2021 Blanket was advised that the payments had to be paid on a 60/40 basis USD/RTGS$. Interest was charged on the outstanding amounts to ZESA during the period January 2021 to March 2021 when payments were withheld.

F-38

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

17 | Tax expense

|  | 2021 |  |  | 2020 |  |  | 2019 |
Tax recognised in profit or loss |  |  |  |  |  |  |  |  |  |  |  |
Current tax |  |  | 9,051 |  |  |  | 9,492 |  |  |  | 7,311 |
Income tax - current year |  |  | 8,769 |  |  |  | 8,969 |  |  |  | 6,802 |
Income tax - change in tax estimates |  |  | (168 | ) |  |  | (54 | ) |  |  | 29 |
Withholding tax - current year |  |  | 450 |  |  |  | 577 |  |  |  | 480 |
Deferred tax expense |  |  | 5,806 |  |  |  | 5,681 |  |  |  | 2,979 |
Origination and reversal of temporary differences |  |  | 5,806 |  |  |  | 5,681 |  |  |  | 2,979 |
Tax expense – recognised in profit or loss |  |  | 14,857 |  |  |  | 15,173 |  |  |  | 10,290 |
Tax recognised in other comprehensive income |  |  |  |  |  |  |  |  |  |  |  |
Income tax - current year |  |  | - |  |  |  | - |  |  |  | - |
Tax expense |  |  | 14,857 |  |  |  | 15,173 |  |  |  | 10,290 |

Unrecognised deferred tax assets

|  | 2021 |  |  | 2020 |  |  | 2019 |
Caledonia Holdings Zimbabwe (Private) Limited |  |  | 1,800 |  |  |  | 593 |  |  |  | 421 |
Greenstone Management Services Holdings Limited |  |  | 516 |  |  |  | 376 |  |  |  | 276 |
Tax losses carried forward |  |  | 2,316 |  |  |  | 969 |  |  |  | 697 |

Taxable losses do not expire for the entities incurring taxable losses within the Group, unless the entities cease trading. Tax losses carried forward relate to Greenstone Management Services Holdings Limited (UK) and Caledonia Holdings Zimbabwe (Private) Limited. Deferred tax assets have not been recognised in these entities as future taxable income is not deemed probable to utilise these losses against.

Tax paid |  | 2021 |  |  | 2020 |  |  | 2019 |
Net income tax payable at January 1 |  |  | (419 | ) |  |  | (163 | ) |  |  | (1,538 | )
Current tax expense |  |  | (9,051 | ) |  |  | (9,492 | ) |  |  | (7,310 | )
Foreign currency movement |  |  | 583 |  |  |  | 2,580 |  |  |  | 3,168 |
Tax paid |  |  | 7,426 |  |  |  | 6,656 |  |  |  | 5,517 |
Net income tax payable at December 31 |  |  | (1,461 | ) |  |  | (419 | ) |  |  | (163 | )

F- 39

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

17 | Tax expense (continued)

Reconciliation of tax rate |  | 2021 |  |  | 2020 |  |  | 2019 |
Profit for the year |  |  | 23,142 |  |  |  | 25,257 |  |  |  | 50,401 |
Total tax expense |  |  | 14,857 |  |  |  | 15,173 |  |  |  | 10,290 |
Profit before tax |  |  | 37,999 |  |  |  | 40,430 |  |  |  | 60,691 |
Income tax at Company's domestic tax rate (1) |  |  | - |  |  |  | - |  |  |  | - |
Tax rate differences in foreign jurisdictions (2) |  |  | 11,847 |  |  |  | 12,405 |  |  |  | 16,232 |
Effect of income tax calculated in RTGS$ as required by PN26 (3) |  |  | 590 |  |  |  | 2,004 |  |  |  | (8,526 | )
Management fee – withholding tax on deemed dividend portion |  |  | 342 |  |  |  | 209 |  |  |  | 224 |
Management fee – non-deductible deemed dividend |  |  | 611 |  |  |  | 570 |  |  |  | 652 |
Management fee – withholding tax - current year |  |  | 148 |  |  |  | 123 |  |  |  | 129 |
Withholding tax on intercompany dividends |  |  | - |  |  |  | 245 |  |  |  | 128 |
Non-deductible expenditure |  |  |  |  |  |  |  |  |  |  |  |
- Royalty expenses (4) |  |  | - |  |  |  | - |  |  |  | 933 |
- Donations |  |  | 311 |  |  |  | 107 |  |  |  | 18 |
- Other non-deductible expenditure |  |  | (170 | ) |  |  | 177 |  |  |  | 21 |
Credit export incentive income exemption |  |  | - |  |  |  | (598 | ) |  |  | (124 | )
Change in income tax rate (5) |  |  | - |  |  |  | (287 | ) |  |  | - |
Change in tax estimates |  |  |  |  |  |  |  |  |  |  |  |
- Zimbabwean income tax |  |  | (166 | ) |  |  | - |  |  |  | 29 |
- South African income tax |  |  | (2 | ) |  |  | (54 | ) |  |  | 63 |
Change in unrecognised deferred tax losses |  |  | 1,346 |  |  |  | 272 |  |  |  | 511 |
Tax expense - recognised in profit or loss |  |  | 14,857 |  |  |  | 15,173 |  |  |  | 10,290 |

| (1) | The tax rate in Jersey, Channel Islands is 0% (2020: 0%, 2019: 0%).

| (2) | The effective tax rate of 39.10% (2020: 37.52%) exceeds the statutory tax rates of subsidiaries of the Company, as certain expenditures are incurred by the Company that is not tax-deductible against taxable income in Zimbabwe and South Africa, where the enacted tax rates are 24.72% (2020: 25.75%) and 28.00% respectively. Further, Zimbabwean legislation requires the Blanket income taxation calculation to be performed in RTGS$ whereas the functional currency in which the profit before tax is calculated in these consolidated financial statements is in US Dollar; the requirement is further described in point 3 below.

| (3) | In 2019 ZIMRA issued PN26 that was affected retrospectively from February 22, 2019. The public notice provided clarity on Section 4 (a) of the Finance Act [Chapter 23.04] of Zimbabwe, which requires a company earning taxable income to pay tax in the same or other specified currency in which taxable income and revenue is earned. PN 26 clarifies that the calculation of taxable income be performed in RTGS$ and that the payment of the tax be in the ratio of the currency that the taxable income and revenue is earned. The reconciling item reconciles the profit before tax calculated using US Dollars as the functional currency of the Zimbabwean entities to taxable income calculated in RTGS$.

| (4) | On August 1, 2019 the Zimbabwean Government announced in the mid-term budget speech that mining royalties will be deductible for income tax purposes. The change came into effect on January 1, 2020.

| (5) | On November 26, 2020 the Zimbabwean Government announced in the 2021 National Budget Statement that the income tax rate will be reduced from 25.75% to 24.72% and will take effect in the 2021 fiscal tax year. This resulted in a change in the estimated deferred tax liability.

F- 40

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

17 | Tax expense (continued)

Recognised deferred tax assets and liabilities

|  | Assets |  |  | Liabilities |  |  | Net |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Property, plant and equipment |  |  | - |  |  |  | - |  |  |  | (9,328 | ) |  |  | (5,380 | ) |  |  | (9,328 | ) |  |  | (5,380 | )
Exploration and evaluation assets |  |  | - |  |  |  | - |  |  |  | (47 | ) |  |  | (29 | ) |  |  | (47 | ) |  |  | (29 | )
Allowance for obsolete stock |  |  | 3 |  |  |  | 13 |  |  |  | - |  |  |  | - |  |  |  | 3 |  |  |  | 13 |
Prepayments |  |  | - |  |  |  | - |  |  |  | (10 | ) |  |  | (3 | ) |  |  | (10 | ) |  |  | (3 | )
Unrealised foreign exchange |  |  | 499 |  |  |  | 530 |  |  |  | - |  |  |  | - |  |  |  | 499 |  |  |  | 530 |
Trade and other payables |  |  | 989 |  |  |  | 636 |  |  |  | - |  |  |  | - |  |  |  | 989 |  |  |  | 636 |
Cash-settled share-based payments |  |  | - |  |  |  | 8 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 8 |
Provisions |  |  | 54 |  |  |  | 60 |  |  |  | - |  |  |  | - |  |  |  | 54 |  |  |  | 60 |
Other |  |  | - |  |  |  | 18 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 18 |
Tax assets/ (liabilities) |  |  | 1,545 |  |  |  | 1,265 |  |  |  | (9,385 | ) |  |  | (5,412 | ) |  |  | *(7,840 | ) |  |  | *(4,147 | )

* | The net deferred tax liability consists of a deferred tax asset of $194 (2020: $87, January 1, 2020: $63) from the South African operation and a net deferred tax liability of $8,034 (2020: $4,234, January 1, 2020: $3,129) due to the Zimbabwean operation. The amounts are in different tax jurisdictions and cannot be offset. The amounts are presented as part of Non-current assets and Non-current liabilities in the Statements of financial position. The deferred tax asset recognised is supported by evidence of probable future taxable income.

Movement in recognised deferred tax assets and liabilities

|  | Balance January 1, 2021 |  |  | Recognised in profit or loss |  |  | Foreign exchange movement |  |  | Balance December 31, 2021 |
Property, plant and equipment |  |  | (5,380 | ) |  |  | (6,439 | ) |  |  | 2,491 |  |  |  | (9,328 | )
Exploration and evaluation assets |  |  | (29 | ) |  |  | (31 | ) |  |  | 13 |  |  |  | (47 | )
Allowance for obsolete stock |  |  | 13 |  |  |  | 3 |  |  |  | (13 | ) |  |  | 3 |
Prepayments |  |  | (3 | ) |  |  | (8 | ) |  |  | 1 |  |  |  | (10 | )
Unrealised foreign exchange |  |  | 530 |  |  |  | 344 |  |  |  | (375 | ) |  |  | 499 |
Trade and other payables |  |  | 639 |  |  |  | 235 |  |  |  | 115 |  |  |  | 989 |
Cash-settled share-based payments |  |  | 8 |  |  |  | (8 | ) |  |  | - |  |  |  | - |
Provisions |  |  | 60 |  |  |  | 123 |  |  |  | (129 | ) |  |  | 54 |
Other |  |  | 15 |  |  |  | (15 | ) |  |  | - |  |  |  | - |
Tax (liabilities)/ assets |  |  | (4,147 | ) |  |  | (5,796 | ) |  |  | 2,103 |  |  |  | (7,840 | )

|  | Balance January 1, 2020 |  |  | Recognised in profit or loss |  |  | Foreign exchange movement |  |  | Balance December 31, 2020 |
Property, plant and equipment |  |  | (4,117 | ) |  |  | (7,174 | ) |  |  | 5,911 |  |  |  | (5,380 | )
Exploration and evaluation assets |  |  | (78 | ) |  |  | (21 | ) |  |  | 70 |  |  |  | (29 | )
Allowance for obsolete stock |  |  | 22 |  |  |  | 14 |  |  |  | (23 | ) |  |  | 13 |
Prepayments |  |  | (4 | ) |  |  | - |  |  |  | 1 |  |  |  | (3 | )
Unrealised foreign exchange |  |  | 309 |  |  |  | 742 |  |  |  | (521 | ) |  |  | 530 |
Trade and other payables |  |  | 739 |  |  |  | 674 |  |  |  | (774 | ) |  |  | 639 |
Cash-settled share-based payments |  |  | 5 |  |  |  | 3 |  |  |  | - |  |  |  | 8 |
Provisions |  |  | 58 |  |  |  | 76 |  |  |  | (74 | ) |  |  | 60 |
Other |  |  | - |  |  |  | 15 |  |  |  | - |  |  |  | 15 |
Tax (liabilities)/ assets |  |  | (3,066 | ) |  |  | (5,671 | ) |  |  | 4,590 |  |  |  | (4,147 | )

F-41

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements
(in thousands of United States Dollars, unless indicated otherwise)

18 | Property, plant and equipment

Cost |  | Land and Buildings |  |  | Mine development, infrastructure and other |  |  | Plant and equipment |  |  | Furniture and fittings |  |  | Motor vehicles |  |  | Solar Plant ~ |  |  | Total |
Balance at January 1, 2020 |  |  | 10,833 |  |  |  | 90,542 |  |  |  | 36,395 |  |  |  | 1,018 |  |  |  | 2,538 |  |  |  | – |  |  |  | 141,326 |
Additions* |  |  | 1 |  |  |  | 19,507 |  |  |  | 4,221 |  |  |  | 219 |  |  |  | 458 |  |  |  | 372 |  |  |  | 24,778 |
Derecognised plant and equipment |  |  | – |  |  |  | – |  |  |  | (238 | ) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (238 | )
Reallocations between asset classes |  |  | 930 |  |  |  | (1,210 | ) |  |  | 280 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Foreign exchange movement |  |  | (7 | ) |  |  | – |  |  |  | (14 | ) |  |  | (2 | ) |  |  | (1 | ) |  |  | 20 |  |  |  | (4 | )
Balance at December 31, 2020 |  |  | 11,757 |  |  |  | 108,839 |  |  |  | 40,644 |  |  |  | 1,235 |  |  |  | 2,995 |  |  |  | 392 |  |  |  | 165,862 |
Balance at January 1, 2021 |  |  | 11,757 |  |  |  | 108,839 |  |  |  | 40,644 |  |  |  | 1,235 |  |  |  | 2,995 |  |  |  | 392 |  |  |  | 165,862 |
Additions* |  |  | 318 |  |  |  | 25,529 |  |  |  | 3,531 |  |  |  | 134 |  |  |  | 176 |  |  |  | 1,581 |  |  |  | 31,269 |
Impairments@ |  |  | – |  |  |  | (65 | ) |  |  | (1,565 | ) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (1,630 | )
Derecognised plant and equipment |  |  | (192 | ) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (192 | )
Reallocations between asset classes # |  |  | 3,120 |  |  |  | (24,913 | ) |  |  | 21,785 |  |  |  | 8 |  |  |  | – |  |  |  | – |  |  |  | – |
Foreign exchange movement |  |  | (25 | ) |  |  | – |  |  |  | (76 | ) |  |  | (35 | ) |  |  | (2 | ) |  |  | (33 | ) |  |  | (171 | )
Balance at December 31, 2021 |  |  | 14,978 |  |  |  | 109,390 |  |  |  | 64,319 |  |  |  | 1,342 |  |  |  | 3,169 |  |  |  | 1,940 |  |  |  | 195,138 |

* | Included in additions is an amount of $19,413 (2020: $6,476) relating to capital work in progress (“CWIP”) and contains $17 ( December 31, 2020: $53) of borrowing costs capitalised from the term loan. As at year end $42,145 of CWIP was included in the cost closing balance (2020: $85,479).
~ | On July 6, 2020 the Board appointed Voltalia as the contractor for the engineering, procuring and constructing of a solar plant to be owned by a subsidiary of the Company and supply Blanket Mine with power. All solar costs that were incurred before July 6, 2020 were accounted for as other expenses and accounted through profit or loss. Solar costs incurred after approval by the Board are accounted for as Property, plant and equipment as it became clear and probable that future economic benefits will flow to the project. The 40-hectare site for the project has been cleared and fenced and is ready for civil work to commence. Construction of the 12MWac solar plant is expected to be completed in the second quarter of 2022. Included in Prepayments is an advance payment to Voltalia to the amount of $1,821 in terms of the EPC agreement and $704 for equipment. These items were delivered at the date of approval of these consolidated financial statements. Also included in Prepayments is an amount of $426 to entities in Zimbabwe for civil and construction work related to the solar plant. Refer to note 21.
@ | Included in impairments are Gensets at a cost of $1,001 and Guide ropes at a total cost of $310. These assets were impaired as they are no longer in a working conditions as intended for the use in production or day to day operations.
# | Included in the reallocation between asset classes is an amount of $18,509 for the Central Shaft.

F- 42

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements
(in thousands of United States Dollars, unless indicated otherwise)

18 | Property, plant and equipment (continued)

Accumulated depreciation and Impairment losses |  | Land and Buildings |  |  | Mine development, infrastructure and other |  |  | Plant and equipment |  |  | Furniture and fittings |  |  | Motor vehicles |  |  | Solar Plant |  |  | Total |
Balance at January 1, 2020 |  |  | 5,413 |  |  |  | 6,325 |  |  |  | 20,050 |  |  |  | 753 |  |  |  | 2,273 |  |  |  | – |  |  |  | 34,814 |
Depreciation for the year |  |  | 1,030 |  |  |  | 648 |  |  |  | 2,691 |  |  |  | 102 |  |  |  | 157 |  |  |  | – |  |  |  | 4,628 |
Accumulated depreciation for derecognised plant and equipment |  |  | – |  |  |  | – |  |  |  | (56 | ) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (56 | )
Foreign exchange movement |  |  | 3 |  |  |  | – |  |  |  | – |  |  |  | (6 | ) |  |  | – |  |  |  | – |  |  |  | (3 | )
Balance at December 31, 2020 |  |  | 6,446 |  |  |  | 6,973 |  |  |  | 22,685 |  |  |  | 849 |  |  |  | 2,430 |  |  |  | – |  |  |  | 39,383 |
Balance at January 1, 2021 |  |  | 6,446 |  |  |  | 6,973 |  |  |  | 22,685 |  |  |  | 849 |  |  |  | 2,430 |  |  |  | – |  |  |  | 39,383 |
Depreciation for the year |  |  | 1,217 |  |  |  | 2,537 |  |  |  | 3,953 |  |  |  | 136 |  |  |  | 203 |  |  |  | – |  |  |  | 8,046 |
Accumulated depreciation for derecognised plant and equipment |  |  | (230 | ) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (230 | )
Accumulated depreciation for impairments |  |  | – |  |  |  | – |  |  |  | (1,133 | ) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (1,133 | )
Foreign exchange movement |  |  | (1 | ) |  |  | – |  |  |  | – |  |  |  | (27 | ) |  |  | (2 | ) |  |  | – |  |  |  | (30 | )
Balance at December 31, 2021 |  |  | 7,432 |  |  |  | 9,510 |  |  |  | 25,505 |  |  |  | 958 |  |  |  | 2,631 |  |  |  | – |  |  |  | 46,036 |
Carrying amounts |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
At December 31, 2020 |  |  | 5,311 |  |  |  | 101,866 |  |  |  | 17,959 |  |  |  | 386 |  |  |  | 565 |  |  |  | 392 |  |  |  | 126,479 |
At December 31, 2021 |  |  | 7,546 |  |  |  | 99,880 |  |  |  | 38,814 |  |  |  | 384 |  |  |  | 538 |  |  |  | 1,940 |  |  |  | 149,102 |

F- 43

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements
(in thousands of United States Dollars, unless indicated otherwise)

18 | Property, plant and equipment (continued)

Economic recovery

Items of property, plant and equipment are depreciated over the LoMP, which includes planned production from inferred resources. These inferred resources are included in the calculation when the economic recovery thereof is demonstrated by the achieved recovered grade relative to the mine’s pay limit for the period 2006 to 2018. The pay limit is 2.10 g/t (2020: 2.10 g/t) while the recovered grade has ranged from 3.38 g/t to 3.36 g/t over the period. All-in-sustaining-cost# has remained consistently below the gold price received over this period resulting in economic recovery of the inferred resources.

# All-in sustaining cost (“AISC”) per ounce is calculated as the on-mine cost per ounce to produce gold (which includes production costs before intercompany eliminations and exploration costs) plus royalty paid, additional costs incurred outside the mine (i.e. at offices in Harare, Johannesburg, London and Jersey), costs associated with maintaining the operating infrastructure and resource base that are required to maintain production at the current levels (sustaining capital investment), the share-based expense arising from the LTIP less silver by-product revenue and the export credit incentive.

F-44

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements
(in thousands of United States Dollars, unless indicated otherwise)

19 | Exploration and evaluation assets

|  | Glen Hume |  |  | Connemara North |  |  | Maligreen |  |  | GG |  |  | Eagle Vulture, Mascot & Penzance |  |  | Sabiwa |  |  | Abercorn |  |  | Valentine |  |  | Total |
Balance at January 1, 2020 |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 3,441 |  |  |  | 3,416 |  |  |  | 282 |  |  |  | – |  |  |  | – |  |  |  | 7,139 |
Acquisition costs: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- Option payments |  |  | 2,500 |  |  |  | 300 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 2,800 |
Exploration costs: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- Consumables and drilling |  |  | 161 |  |  |  | – |  |  |  | – |  |  |  | 28 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 189 |
- Labour |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 35 |  |  |  | 11 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 46 |
- Power |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 19 |  |  |  | 3 |  |  |  | 2 |  |  |  | – |  |  |  | – |  |  |  | 24 |
Reallocate to assets held for sale * |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (500 | ) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (500 | )
Impairment * |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (2,930 | ) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (2,930 | )
Balance at December 31, 2020 |  |  | 2,661 |  |  |  | 300 |  |  |  | – |  |  |  | 3,523 |  |  |  | – |  |  |  | 284 |  |  |  | – |  |  |  | – |  |  |  | 6,768 |
Balance at January 1, 2021 |  |  | 2,661 |  |  |  | 300 |  |  |  | – |  |  |  | 3,523 |  |  |  | – |  |  |  | 284 |  |  |  | – |  |  |  | – |  |  |  | 6,768 |
- Mining claims acquired |  |  | – |  |  |  | – |  |  |  | 4,000 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 4,000 |
Decommissioning asset acquired |  |  | – |  |  |  | – |  |  |  | 135 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 135 |
Exploration costs: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- Consumables and drilling |  |  | 1,074 |  |  |  | 71 |  |  |  | 14 |  |  |  | 16 |  |  |  | – |  |  |  | – |  |  |  | 12 |  |  |  | 31 |  |  |  | 1,218 |
- Contractor |  |  | 42 |  |  |  | 51 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 24 |  |  |  | 117 |
- Labour |  |  | 60 |  |  |  | 41 |  |  |  | 47 |  |  |  | 46 |  |  |  | – |  |  |  | – |  |  |  | 4 |  |  |  | 10 |  |  |  | 208 |
- Power |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 33 |  |  |  | – |  |  |  | 6 |  |  |  | – |  |  |  | – |  |  |  | 39 |
Impairment ~ |  |  | (3,837 | ) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (3,837 | )
Balance at December 31, 2021 |  |  | – |  |  |  | 463 |  |  |  | 4,196 |  |  |  | 3,618 |  |  |  | – |  |  |  | 290 |  |  |  | 16 |  |  |  | 65 |  |  |  | 8,648 |

* | Management determined the fair value of Eagle Vulture, Mascot and Penzance as the future sale price as agreed by independent parties in the sale contract that amounted to $500. The carrying amount of Eagle Vulture, Mascot and Penzance before the impairment was $3,430 and the write down resulted in an impairment expense of $2,930. The $500 carrying value was reallocated to Assets held for sale in December, 2020. The sale was completed on July 27, 2021.
~ | Caledonia has completed sufficient work to establish that the potential orebody at the Glen Hume property will not meet Caledonia’s requirements in terms of size, grade and width. Accordingly, Caledonia will not exercise the option to acquire this property.
The Group voluntarily changed its disclosure policy for exploration and evaluation assets to be disclosed separately as Exploration and evaluation assets rather than as part of Property, plant and equipment (refer to note 4(h)).

F- 45

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

19 | Exploration and evaluation assets (continued)

(a) | Maligreen

On November 3, 2021 the mining claims had been transferred to Caledonia over the Maligreen project ("Maligreen"), a property situated in the Gweru mining district in the Zimbabwe Midlands, for a total cash consideration of US$4 million. The property is estimated to contain a NI 43-101 compliant inferred mineral resource of approximately 940,000 ounces of gold.

Maligreen is a substantial brownfield exploration opportunity with significant historical exploration and evaluation work having been conducted on the property over the last 30 years including:

| ● | An estimated 60,000 meters of diamond core and percussion drilling

| ● | 3.5 tonnes of bulk metallurgical test work

| ● | Aeromagnetic and ground geophysical surveys

As at August 31, 2021, Maligreen is estimated to host a NI 43-101 compliant inferred mineral resource of approximately 940,000 ounces of gold in 15.6 million tonnes at a grade of 1.88g/t. Of the inferred mineral resource 76% (approximately 712,000 ounces) is shallower than 220m indicating the potential for an open pit mining operation. The inferred mineral resource has been estimated using a cut-off grade of 0.4g/t for a potential open pit and 1.5g/t for a potential underground mine (further information on the assumptions used is set out in the news release dated September 23, 2021 and in the technical report dated November 5, 2021 filed on SEDAR (www.sedar.com)). Initial assessments of the inferred mineral resource indicate a favourable grade tonnage curve; by applying a higher cut-off grade of 1.0g/t, the total estimated inferred mineral resource reduces by 12% to approximately 827,000 ounces at a grade of 2.79g/t, a 48% higher grade. These favourable grade tonnage dynamics offer a high level of flexibility in the evaluation of a future mining operation.

The total land area of Maligreen is approximately 550 hectares comprising two historic open pit mining operations which produced approximately 20,000 oz of gold mined from oxides between 2000 and 2002 after which the operation was closed. Caledonia expects to drill an initial 4,800 meters at an estimated cost of US$1.6 million over a period of 18 to 24 months to improve its understanding of the existing resource assess the potential for a mining operation. Further exploration opportunities exist within the claims area and a subsequent exploration programme is under consideration to explore for continuations of the existing inferred mineral resource at depth to the north-west and the strike extension in the northern part of the property.

| (b) | Connemara North

On December 16, 2020 the Company concluded an option agreement (“Connemara North option”) with the representatives of Connemara North to purchase the claims over the Connemara North mining properties situated in Gweru, Zimbabwe. The exercise of the option will be exercisable at the discretion of the Company until May 17, 2022.

An amount of $300 is payable for the Connemara North option and remained outstanding at the date of approval of the consolidated financial statements. The outstanding amount was accounted for as Trade and other payables (Refer note 31).

The Connemara North option gives the Company the right to carry out legal due diligence and conduct drilling and/or other exploratory work over a period of 18 months from the conclusion date to understand the resource body.

F- 46

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

19 | Exploration and evaluation assets (continued)

(c) | Connemara North (continued)

If the Company elects to exercise the option, $600 becomes payable to the Connemara representatives within 7 days of the submission of the transfer documents to the Ministry of Mines and a further $4.4 million within 7 days from confirmation of transfer of ownership by the Ministry of Mines. The first payment of $600 will remain refundable subject to the Ministry of Mines approval. After the purchase, the Connemara representatives will retain a 1% NSR payable quarterly in arrears on the net sale proceeds from the Connemara gold deposits.

(d) | Glen Hume

On November 19, 2020 the Company concluded an option agreement (“Glen Hume option”) with the representatives of Glen Hume, whereby they granted the Company an option for the right to carry out legal due diligence and conduct drilling and/or other exploratory work over a period of 15 months from the conclusion date to understand the resource body of the Glen Hume property, situated in Gweru, Zimbabwe.

After concluding drilling and exploration to the value of $3.8 million the Company decided not to exercise the option over the Glen Hume property as the results of the exploration work indicated that the property does not meet Caledonia’s strategic objectives. This gave rise to an impairment of $3.8 million. No further costs or impairments in respect of Glen Hume are anticipated.

20 | Inventories

|  | 2021 |  |  | 2020 |
Consumable stores |  |  | 21,516 |  |  |  | 16,543 |
Gold in progress |  |  | 243 |  |  |  | 1,166 |
Provision for obsolete stock |  |  | (947 | ) |  |  | (911 | )
|  |  | 20,812 |  |  |  | 16,798 |

Consumable stores at December 31, 2021 from December 31, 2020 increased due to increases to safety stock accumulated during 2021. Additional safety stock were purchased due to potential supply line disruptions in South Africa as a result of the riots and looting that occurred in 2021.

21 | Prepayments

|  | 2021 |  |  | 2020 |
Suppliers - South Africa |  |  | 1,552 |  |  |  | 846 |
- Zimbabwe |  |  | 1,766 |  |  |  | 1,073 |
Solar (note 18) |  |  | 2,951 |  |  |  | – |
Other prepayments |  |  | 661 |  |  |  | 55 |
|  |  | 6,930 |  |  |  | 1,974 |

F-47

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

22 | Cash and cash equivalents

|  | 2021 |  |  | 2020 |
Bank balances |  |  | 17,152 |  |  |  | 19,092 |
Cash and cash equivalents |  |  | 17,152 |  |  |  | 19,092 |
Bank overdrafts used for cash management purposes |  |  | (887 | ) |  |  | – |
Net cash and cash equivalents at year end |  |  | 16,265 |  |  |  | 19,092 |

The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities is disclosed in note 33.

|  |  |  |  |  | Interest rate |
Overdraft facilities |  |  |  |  |  |  |  |
Stanbic Bank - RTGS$ denomination |  |  | 112,000,000 |  |  |  | 32 | %
Stanbic Bank - USD denomination |  |  | 1,000,000 |  |  |  | 10 | %

23 | Assets held for sale

|  | Note |  |  | 2021 |  |  | 2020 |
Non-current assets held for sale |  |  |  |  |  |  |  |  |  |  |  |
Eagle Vulture, Mascot & Penzance |  |  | 23.1 |  |  |  | – |  |  |  | 500 |
Sale of subsidiary |  |  | 23.2 |  |  |  | – |  |  |  | – |

23.1 | Eagle Vulture, Mascot and Penzance

Farvic Consolidated Mines (Pvt) Ltd (“Farvic”) requested permission from the Company to perform drilling on the Eagle Vulture, Mascot and Penzance orebodies to obtain an understanding of the technical feasibility and commercial viability of Eagle Vulture, Mascot and Penzance in 2019. Farvic later expressed their interest in buying Eagle Vulture, Mascot and Penzance in late 2020. Management evaluated the proposition and a price was determined in November of 2020. During February 2021 Farvic and the Group concluded the sale contract at $500 and Blanket relinquished all rights to the properties.

The assets were available for sale as at December 31, 2020 and therefore met the criteria to be classified as held for sale.

Management determined the fair value of these assets at $500 on December 31, 2020, as this was the lower of the fair value less cost to sell and the carrying amount. The carrying amount of Eagle Vulture, Mascot and Penzance, before impairment, at December 31, 2020 was $3,430 and it was classified as an Exploration and evaluation asset. The write down resulted in an impairment expense $2,930 during 2020. The sale was completed on July 27, 2021.

23.2 | Sale of subsidiary

On May 31, 2018 the Group entered into an amended share sale agreement with SH Mineral Investments Proprietary Limited (“SH Minerals”) to sell the shares and claims of Eersteling Gold Mining Company Limited (“Eersteling”), a South African subsidiary previously consolidated as part of the Group, that has been on care and maintenance since 1997. The amended share sale agreement allowed for a purchase price of $3,000 which would be settled by three payments of $1,000 payable on the completion date, 12 and 18 months after the completion date. On January 31, 2019 all suspensive conditions for the sale were met and the Group transferred the registered and beneficial ownership of Eersteling to SH Minerals. During 2021 $340 (2020: $900) was received as payment towards the purchase price. SH minerals was unable to make the final payment outstanding due to the closure of the operation during the South African lock-down period and the death of two of the purchaser’s principals. Operations at Eersteling appear to have been suspended again in late 2021. As it was no longer clear that the receivable of $761 can be recovered, it was impaired.

F- 48

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

23 | Assets held for Sale (continued)
23.2 | Sale of subsidiary (continued)

Details of the disposal are as follows:

|  | 2019 |
Carrying amounts of net assets over which control was lost: |  |  |  |
Non-current assets |  |  |  |
Property, plant and equipment |  |  | 227 |
Current assets |  |  |  |
Trade and other receivables |  |  | 84 |
Total assets |  |  | 311 |
Non-current liabilities |  |  |  |
Rehabilitation provision |  |  | 650 |
Current liabilities |  |  |  |
Trade and other payables |  |  | 8 |
Total liabilities |  |  | 658 |
Consideration receivable: |  |  |  |
Cash received |  |  | 1,000 |
Deferred consideration (at January 31, 2019) |  |  | 1,953 |
Total consideration |  |  | 2,953 |
Profit on sale of subsidiary: |  |  |  |
Net liabilities derecognised |  |  | 347 |
Cumulative exchange differences in respect of the net liabilities of the subsidiary reclassified from equity on loss of control of subsidiary |  |  | 2,109 |
Fair value consideration receivable (at January 31, 2019) |  |  | 2,953 |
Profit on sale of subsidiary |  |  | 5,409 |

24 | Trade and other receivables

|  | 2021 |  |  | 2020 |
Bullion sales receivable |  |  | 4,528 |  |  |  | 1,311 |
VAT receivables |  |  | 3,162 |  |  |  | 2,278 |
Deferred consideration on the disposal of subsidiary (Note 23.2) |  |  | – |  |  |  | 1,100 |
Deposits for stores, equipment and other receivables |  |  | 248 |  |  |  | 273 |
|  |  | 7,938 |  |  |  | 4,962 |

The Group's exposure to credit and currency risks, and impairment losses related to trade and other receivables are disclosed in note 33. The net carrying value of trade receivables was considered a reasonable approximation of fair value and are short-term in nature. No provision for expected credit losses were recognised as all scheduled payments were received as expected up to the date of approval of these financial statements, except for the deferred consideration on the disposal of subsidiary. The deferred consideration on the disposal of subsidiary was impaired (refer to note 23.2). The Bullion sales receivable and part of the VAT receivable were received after year-end

F-49

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

25 | Share capital

Authorised

Unlimited number of ordinary shares of no par value.

Unlimited number of preference shares of no par value.

Issued ordinary shares

|  | Number of fully paid shares |  |  | Amount |
January 1, 2020 |  |  | 10,763,041 |  |  |  | 56,065 |
Shares issued: |  |  |  |  |  |  |  |
- share-based payment - employees (note 1(a)) |  |  | 25,553 |  |  |  | 216 |
- options exercised |  |  | 5,000 |  |  |  | 30 |
- equity raise* |  |  | 597,963 |  |  |  | 12,538 |
- Blanket shares purchased from Fremiro (note 5) |  |  | 727,266 |  |  |  | 5,847 |
December 31, 2020 |  |  | 12,118,823 |  |  |  | 74,696 |
Shares issued: |  |  |  |  |  |  |  |
- options exercised |  |  | 18,000 |  |  |  | 165 |
- equity raise# |  |  | 619,783 |  |  |  | 7,806 |
December 31, 2021 |  |  | 12,756,606 |  |  |  | 82,667 |

* | The Company raised equity for the construction of the solar plant by way of an At The Market (“ATM”) equity offer on the NYSE American. Gross proceeds of $13,000 were raised pursuant to the ATM sales agreement with Cantor Fitzgerald & Co. at a transaction cost of $462.
# | Gross proceeds of $7,834 with a transaction cost of $28 were raised by issuing depository receipts on the VFEX in December 2021.

26 | Reserves

Foreign currency translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations with functional currencies that differ from the presentation currency.

Share-based payment reserve

The share-based payment reserve comprises the fair value of equity instruments granted to employees, directors and service providers under share option plans (refer to note 12) and equity instruments issued to Blanket’s indigenous shareholders under Blanket Mine’s Indigenisation Transaction (refer note 5).

Contributed surplus

The contributed surplus reserve comprises the reduction in stated capital as approved by shareholders at the special general meeting on January 24, 2013 to be able to commence dividend payments.

Reserves

|  | 2021 |  |  | 2020 |
Foreign currency translation reserve |  |  | (9,325 | ) |  |  | (8,794 | )
Equity-settled share-based payment reserve |  |  | 14,513 |  |  |  | 14,513 |
Contributed surplus |  |  | 132,591 |  |  |  | 132,591 |
Total |  |  | 137,779 |  |  |  | 138,310 |

F-50

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

27 | Earnings per share

Weighted average number of shares – Basic earnings per share |  |  |  |  |  |  |  |  |
(in number of shares) |  | 2021 |  |  | 2020 |  |  | 2019 |
Issued shares at the beginning of year (note 25) |  |  | 12,118,823 |  |  |  | 10,763,041 |  |  |  | 10,603,153 |
Weighted average shares issued |  |  | 51,462 |  |  |  | 940,489 |  |  |  | 138,736 |
Weighted average number of shares at December 31 |  |  | 12,170,285 |  |  |  | 11,703,530 |  |  |  | 10,741,889 |

Weighted average number of shares - Diluted earnings per share |  |  |  |  |  |  |  |  |
(in number of shares) |  | 2021 |  |  | 2020 |  |  | 2019 |
Weighted average at December 31 |  |  | 12,170,285 |  |  |  | 11,703,530 |  |  |  | 10,741,889 |
Effect of dilutive options |  |  | 6,933 |  |  |  | 13,173 |  |  |  | 5,229 |
Weighted average number of shares (diluted) at December 31 |  |  | 12,177,218 |  |  |  | 11,716,703 |  |  |  | 10,747,118 |

The average market value of the Company’s shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the year during which the options were outstanding. Options of 18,842 (2020: 14,827, 2019: 32,771) were excluded from the dilutive earnings per share calculation as these options were anti-dilutive.

The quantity of options outstanding as at year end that were out of the money amounted to Nil (2020: Nil, 2019: 18,000) options.

The calculation of total basic and diluted earnings per share for the year ended December 31, 2021 was based on the adjusted profit attributable to shareholders as follows:

|  | 2021 |  |  | 2020 |  |  | 2019 |
Profit for the year attributable to owners of the Company (basic and diluted) |  |  | 18,405 |  |  |  | 20,780 |  |  |  | 42,018 |
Blanket Mine Employee Trust Adjustment |  |  | (326 | ) |  |  | (485 | ) |  |  | (986 | )
Profit attributable to ordinary shareholders (basic and diluted) |  |  | 18,079 |  |  |  | 20,295 |  |  |  | 41,032 |
Basic earnings per share - $ |  |  | 1.49 |  |  |  | 1.73 |  |  |  | 3.82 |
Diluted earnings per share - $ |  |  | 1.48 |  |  |  | 1.73 |  |  |  | 3.81 |

Basic earnings are adjusted for the amounts that accrue to other equity holders of subsidiaries upon the full distribution of post-acquisition earnings to shareholders.

Diluted earnings are calculated on the basis that the unpaid ownership interests of Blanket Mine’s indigenous shareholders are effectively treated as options whereby the weighted average fair value for the period of the Blanket Mine shares issued to the indigenous shareholders and which are subject to settlement of the loan accounts is compared to the balance of the loan accounts and any excess portion is regarded as dilutive. The difference between the number of Blanket Mine shares subject to the settlement of the loan accounts and the number of Blanket Mine shares that would have been issued at the average fair value, is treated as the issue of shares for no consideration and regarded as dilutive shares. The calculated dilution is taken into account with additional earnings attributable to the dilutive shares in Blanket Mine, if any. The interest of the NIEEF shareholding was anti-dilutive (i.e., the value of the options was less than the outstanding loan balance). Accordingly, there was no adjustment to fully diluted earnings attributable to shareholders.

F-51

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

28 | Non-controlling interests

Blanket Mine’s NCI share recognised at an effective share of 13.2% (2020: 13.2%, 2019: 16.2%)

|  | 2021 |  |  | 2020 |  |  | 2019 |
Current assets |  |  | 33,634 |  |  |  | 24,864 |  |  |  | 21,386 |
Non-current assets |  |  | 154,003 |  |  |  | 133,908 |  |  |  | 115,610 |
Current liabilities |  |  | (17,261 | ) |  |  | (7,339 | ) |  |  | (8,630 | )
Non-current liabilities |  |  | (11,535 | ) |  |  | (8,065 | ) |  |  | (9,085 | )
Net assets of Blanket Mine (100%) |  |  | 158,841 |  |  |  | 143,368 |  |  |  | 119,281 |
Carrying amount of NCI of 13.2% (2020: 13.2%, 2019: 16.2%) |  |  | 19,260 |  |  |  | 16,524 |  |  |  | 16,302 |
Revenue |  |  | 121,329 |  |  |  | 100,002 |  |  |  | 75,826 |
Profit after tax |  |  | 35,911 |  |  |  | 33,361 |  |  |  | 51,746 |
Total comprehensive income of Blanket Mine (100%) |  |  | 35,911 |  |  |  | 33,361 |  |  |  | 51,746 |
Profit allocated to NCI of 13.2% (2020: 13.2%, 2019: 16.2%) |  |  | 4,737 |  |  |  | 4,477 |  |  |  | 8,383 |
Dividend allocated to NCI of 13.2% (2020: 13.2%, 2019: 16.2%) |  |  | (2,001 | ) |  |  | (655 | ) |  |  | (426 | )

29 | Provisions

Site restoration

Site restoration relates to the estimated cost of closing down the mines and represents the site and environmental restoration costs, estimated to be paid throughout the period up until closure due to areas of environmental disturbance present at the reporting date as a result of mining activities. Regarding Blanket Mine the costs of site restoration are discounted based on the estimated life of mine. Site restoration costs at Blanket Mine are capitalised to mineral properties on initial recognition and depreciated systematically over the estimated life of the mine.

Reconciliation of site restoration provision |  | 2021 |  |  | 2020 |
Balance January 1 |  |  | 3,567 |  |  |  | 3,346 |
Unwinding of discount |  |  | – |  |  |  | 2 |
Change in estimate - adjustment capitalised in Property, plant and equipment |  |  | (408 | ) |  |  | 219 |
Acquisition - Maligreen |  |  | 135 |  |  |  | – |
Balance December 31 |  |  | 3,294 |  |  |  | 3,567 |

The discount rates currently applied in calculating the present value of the Blanket Mine provision is 1.94% (2020: 1.45%), based on a risk-free rate and cash flows estimated at an average 2.26% inflation (2020: 2.05%). The gross rehabilitation costs, before discounting, amounted to $3,087 (2020: $3,389) for Blanket Mine as at December 31, 2021.

F-52

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

30 | Loans and borrowings

|  | 2021 |  |  | 2020 |
Balance at January 1 |  |  | 408 |  |  |  | 2,471 |
Cash flows |  |  |  |  |  |  |  |
Repayment |  |  |  |  |  |  |  |
- Capital |  |  | (361 | ) |  |  | (574 | )
- Finance cost |  |  | (69 | ) |  |  | (388 | )
Unrealised foreign exchange |  |  | (34 | ) |  |  | (1,487 | )
Non-cash flow |  |  |  |  |  |  |  |
Finance cost |  |  | 56 |  |  |  | 386 |
Balance at December 31 |  |  | - |  |  |  | 408 |
Short-term portion of loan facility |  |  | - |  |  |  | 408 |

Finance cost are accounted for in note 16 on the effective interest rate method.

Terms and repayment schedule

The terms and conditions of outstanding loans are as follows on December 31:

|  |  |  |  |  |  |  |  |  |  | 2021 |  |  | 2020 |
| Currency |  | Nominal interest rate |  |  | Year of maturity |  |  | Face value |  |  | Carrying value |  |  | Face value |  |  | Carrying value |
Unsecured bank loan - Stanbic | RTGS$ |  |  | 50 | % |  |  | 2021 |  |  |  | - |  |  |  | - |  |  |  | 87 |  |  |  | 87 |
Unsecured bank loan - First Capital | RTGS$ |  |  | 55 | % |  |  | 2021 |  |  |  | - |  |  |  | - |  |  |  | 321 |  |  |  | 321 |
Total |  |  |  |  |  |  |  |  |  |  | - |  |  |  | - |  |  |  | 408 |  |  |  | 408 |

The Stanbic loan was repaid as a single bullet payment in December 2021 and the First Capital loan in September 2021.

F-53

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

31 | Trade and other payables

|  | 2021 |  |  | 2020 |
Trade payables and accruals |  |  | 2,503 |  |  |  | 1,897 |
Electricity accrual |  |  | 888 |  |  |  | 735 |
Audit fee |  |  | 260 |  |  |  | 273 |
Shareholders for dividend (Non-controlling interest) |  |  | – |  |  |  | 208 |
Other payables |  |  | 749 |  |  |  | 1,209 |
Connemara North - exploration option |  |  | – |  |  |  | 300 |
Financial liabilities |  |  | 4,400 |  |  |  | 4,622 |
Production and management bonus accrual - Blanket Mine |  |  | 899 |  |  |  | 467 |
Other employee benefits |  |  | 657 |  |  |  | 794 |
Leave pay |  |  | 2,410 |  |  |  | 2,098 |
Bonus provision |  |  | 645 |  |  |  | – |
Accruals |  |  | 946 |  |  |  | 683 |
Non-financial liabilities |  |  | 5,557 |  |  |  | 4,042 |
Total |  |  | 9,957 |  |  |  | 8,664 |

The Group's exposure to credit and currency risks and impairment losses related to trade and other receivables are disclosed in note 33.

The Group voluntarily changed the disclosure policy for lease liabilities to be disclosed separately rather than under Trade and other payables. The new disclosure policy was adopted from December, 2020 and has been applied retrospectively. Refer to note 15.

F-54

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

32 | Cash flow information

Non-cash items and information presented separately on the cash flow statement:

|  | 2021 |  |  | 2020 |  |  | 2019 |
Operating profit |  |  | 38,360 |  |  |  | 40,735 |  |  |  | 60,889 |
Adjustments for: |  |  |  |  |  |  |  |  |  |  |  |
Impairment of property, plant and equipment |  |  | 497 |  |  |  | – |  |  |  | 144 |
Impairment of exploration and evaluation assets - Glen Hume (note 19) |  |  | 3,837 |  |  |  | 2,930 |  |  |  | – |
Expected credit losses on deferred consideration on the disposal of subsidiary (notes 23.2 and 24) |  |  | 761 |  |  |  | – |  |  |  | – |
Profit on sale of subsidiary |  |  | – |  |  |  | – |  |  |  | (5,409 | )
Unrealised foreign exchange gains (note 13) |  |  | (2,754 | ) |  |  | (8,367 | ) |  |  | (31,307 | )
Cash-settled share-based expense (note 12.1) |  |  | 477 |  |  |  | 1,413 |  |  |  | 689 |
Cash-settled share-based expense included in production costs (note 8) |  |  | 692 |  |  |  | 634 |  |  |  | 107 |
Non-cash portion of cash-settled share-based expense |  |  | (420 | ) |  |  | (1 | ) |  |  | (1,384 | )
Depreciation |  |  | 8,046 |  |  |  | 4,628 |  |  |  | 4,434 |
Fair value loss on derivative assets (note 14.1) |  |  | 105 |  |  |  | 266 |  |  |  | (102 | )
Fair value loss on derivative liabilities (note 14.1) |  |  | 135 |  |  |  | – |  |  |  | – |
Disposal of property, plant and equipment |  |  | – |  |  |  | – |  |  |  | 63 |
Derecognition of property, plant and equipment |  |  | (38 | ) |  |  | 182 |  |  |  | – |
Cash generated from operations before working capital changes |  |  | 49,698 |  |  |  | 42,420 |  |  |  | 28,124 |
Inventories |  |  | (4,016 | ) |  |  | (5,707 | ) |  |  | (1,655 | )
Prepayments |  |  | (4,272 | ) |  |  | 816 |  |  |  | (2,099 | )
Trade and other receivables |  |  | (4,746 | ) |  |  | 539 |  |  |  | 393 |
Trade and other payables |  |  | 2,039 |  |  |  | (101 | ) |  |  | (878 | )
Cash generated from operations |  |  | 38,703 |  |  |  | 37,967 |  |  |  | 23,885 |

33 | Financial Instruments and risk management

The Group has exposure to the following risks from its use of financial instruments:

● | Credit risk;

● | Liquidity risk;

● | Currency risk;

● | Interest rate risk; and

● | Market risk

This note present information about the Group’s exposure to each of the above risks and the Group’s objectives, policies and processes for measuring and managing risk. Further quantitative disclosures are included throughout these consolidated financial statements. The Group is exposed in varying degrees to a variety of financial instrument related risks by virtue of its activities. The overall financial risk management program focuses on the preservation of capital and protecting current and future Group assets and cash flows by reducing exposure to risks posed by the uncertainties and volatilities of financial markets.

F- 55

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

33 | Financial Instruments and risk management (continued)

The Board of Directors has the responsibility to ensure that an adequate financial risk management policy is established and to approve the policy. The Group’s Audit Committee oversees management’s compliance with the Group’s financial risk management policy.

Gold price hedges were entered into to manage the possible effect of gold price fluctuations. The derivative financial instrument was entered into by the Company for economic hedging purposes and not as a speculative investment. The fair value of the Group’s financial instruments approximates their carrying value due to the short period to maturity.

The types of risk exposure and the way in which such exposures are managed are described below:

(a) | Credit risk

Exposure to credit risk

Credit risk includes the risk of a financial loss to the Group if a gold sales customer fails to meet its contractual obligation. Gold sales were made to Fidelity in Zimbabwe during the year.

The carrying amount of financial assets as disclosed in the statements of financial position and related notes represents the maximum credit exposure. The maximum exposure to credit risk for trade and other receivables at the reporting date by geographic region was:

Carrying amount |  | 2021 |  |  | 2020 |
Zimbabwe |  |  | 4,753 |  |  |  | 1,581 |
Jersey, Channel Islands |  |  | – |  |  |  | 1,100 |
Other regions |  |  | 23 |  |  |  | 3 |
|  |  | 4,776 |  |  |  | 2,684 |

The maximum exposure to credit risk for cash and cash equivalents at the reporting date by geographic region was:

|  | 2021 |  |  | 2020 |
Zimbabwe |  |  | 3,470 |  |  |  | 5,116 |
Jersey, Channel Islands |  |  | 13,045 |  |  |  | 11,244 |
Other regions |  |  | 637 |  |  |  | 2,732 |
|  |  | 17,152 |  |  |  | 19,092 |

(b) | Liquidity risk

Liquidity risk is the risk that will not enable the Group to meet its financial obligations as they fall due. The Group manages its liquidity risk by ensuring sufficient cash availability to meet its likely cash requirements, after taking into account cash flows from operations and the Group’s holdings of cash and cash equivalents. The Group believes that these sources will be sufficient to cover the anticipated cash requirements. Senior management is also actively involved in the reviewing and approving of planned expenditures by regularly monitoring cash flows from operations and anticipated investing and financing activities.

The following are the contractual maturities of financial liabilities, including contractual interest payments and excluding the impact of netting agreements.

F- 56

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

33 | Financial Instruments and risk management (continued)

(b) | Liquidity risk (continued)

Non-derivative financial liabilities

December 31, 2021 |  | Carrying amount |  |  | 12 months or less |
Trade and other payables |  |  | 4,400 |  |  |  | 4,400 |
Term loan facility |  |  | - |  |  |  | - |
|  |  | 4,400 |  |  |  | 4,400 |

December 31, 2020 |  | Carrying amount |  |  | 12 months or less |
Trade and other payables |  |  | 4,622 |  |  |  | 4,622 |
Term loan facility |  |  | 408 |  |  |  | 408 |
|  |  | 5,030 |  |  |  | 5,030 |

(c) | Currency risk

The Group is exposed to currency risk on inter-company sales and purchases that are denominated in a currency other than the respective functional currencies of Group entities. The Group does not use financial instruments to hedge its exposure to currency risk. To reduce exposure to currency transaction risk, the Group regularly reviews the currency (i.e. RTGS$ or Foreign currency) in which it spends its cash to identify and avoid specific expenditures in currencies that experience inflationary pressures. The Group aims to maintain cash and cash equivalents in US Dollars to manage foreign exchange exposure. In 2020 the Group invested in a Gold ETF to avoid fluctuations in South African Rand (refer to note 14.1) where cash spend is held in anticipation of South African Rand based expenses. Management consider the need for any financial instrument on a forward going basis to hedge risk.

The fluctuation of the US Dollar in relation to other currencies that entities within the Group may transact in will consequently have an effect upon the profitability of the Group and may also effect the value of the Group’s assets and liabilities. As noted below, the Group has certain financial assets and liabilities denominated in currencies other than the functional currency of the Company. To reduce exposure to currency transaction risk, the Group regularly reviews the currency in which it spends its cash to identify and avoid specific expenditures in currencies that experience inflationary pressures. The Group invested in a Gold ETF to avoid fluctuations in South African Rands. Further, the Group aims to maintain cash and cash equivalents in US Dollar to avoid foreign exchange exposure and to meet short‐term liquidity requirements.

F- 57

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

33 | Financial Instruments and risk management (continued)
(c) | Currency risk (continued)

Sensitivity analysis

As a result of the Group’s monetary assets and liabilities denominated in foreign currencies which is different to the functional currency of the underlying entities, the profit or loss and equity in the underlying entities could be affected by movements between the functional currency and the foreign currency. The table below indicates consolidated monetary assets/(liabilities) in the Group that have a different functional currency and foreign currency.

|  | 2021 |  |  | 2020 |
|  | $'000 |  |  | $'000 |
|  | Functional currency |  |  | Functional currency |
|  | ZAR |  |  |  |  |  |  | ZAR |  |  |  |  |
Cash and cash equivalents |  |  | 59 |  |  |  | 259 |  |  |  | 59 |  |  |  | 1,959 |
Trade and other receivables |  |  | - |  |  |  | 2,293 |  |  |  | - |  |  |  | 249 |
Trade and other payables |  |  | - |  |  |  | (166 | ) |  |  | - |  |  |  | (174 | )
Term loan |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 408 |
Overdraft |  |  | - |  |  |  | (887 | ) |  |  | - |  |  |  | - |
|  |  | 59 |  |  |  | 1,499 |  |  |  | 59 |  |  |  | 2,442 |

A reasonably possible strengthening or weakening of 5% of the various functional currencies against the foreign currencies would have the following equal or opposite effect on profit or loss and equity for the Group:

|  | 2021 |  |  | 2020 |
|  | $'000 |  |  | $'000 |
|  | Functional currency |  |  | Functional currency |
|  | ZAR |  |  |  |  |  |  | ZAR |  |  |  |  |
Cash and cash equivalents |  |  | 3 |  |  |  | 40 |  |  |  | 3 |  |  |  | 103 |
Trade and other receivables |  |  | - |  |  |  | 109 |  |  |  | - |  |  |  | 12 |
Trade and other payables |  |  | - |  |  |  | (8 | ) |  |  | - |  |  |  | (8 | )
Term loan |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 19 |
Overdraft |  |  | - |  |  |  | (42 | ) |  |  | - |  |  |  | - |
|  |  | 3 |  |  |  | 99 |  |  |  | 3 |  |  |  | 126 |

(d) | Interest rate risk

The Group's interest rate risk arises from Loans and borrowings, overdraft facility and cash held. The Loans and borrowings, overdraft facility and cash held have variable interest rates. Variable rates expose the Group to cash flow interest rate risk. The Group has not entered into interest rate swap agreements and mitigates the interest rate risk by remaining in a positive consolidated net cash position.

The Group’s assets and liabilities exposed to interest rate fluctuations as at year end is summarised as follows:

|  | 2021 |  |  | 2020 |
Cash and cash equivalents |  |  | 17,152 |  |  |  | 19,092 |
Term loan |  |  | – |  |  |  | (408 | )
Overdraft |  |  | 887 |  |  |  | – |

F- 58

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

33 | Financial Instruments and risk management (continued)
(d) | Interest rate risk (continued)

Interest rate risk arising from borrowings is offset by interest from available cash and cash equivalents. The table below summarises the effect of a change in finance cost on the Group’s profit or loss and equity, had the rates charged differed.

Sensitivity analysis - Cash and cash equivalents |  | 2021 |  |  | 2020 |
Increase by 100 basis points |  |  | 172 |  |  |  | 191 |
Decrease by 100 basis points |  |  | (172 | ) |  |  | (191 | )
Sensitivity analysis - Term loan |  |  |  |  |  |  |  |
Increase by 100 basis points |  |  | - |  |  |  | 4 |
Decrease by 100 basis points |  |  | - |  |  |  | (4 | )
Sensitivity analysis - Overdraft |  |  |  |  |  |  |  |
Increase by 100 basis points |  |  | 9 |  |  |  | - |
Decrease by 100 basis points |  |  | (9 | ) |  |  | - |

(e) | Market risk

Market risk is the risk that changes in the gold price will affect the Group’s consolidated statements of financial position and statements of profit or loss and other comprehensive income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Group regularly monitors its market risk and evaluates the options available. Post year end management entered into a cap and collar hedge to hedge its exposure to the gold price, refer to note 41.1 and on December 13, 2021 into a call option (refer to note 14.2).

Sensitivity analysis

A reasonably possible strengthening (weakening) of the gold price will have an impact on the revenue of the Group and the fair value of the gold loan and call option at December 31, 2021. This would have affected the measurement of financial instruments by the amounts as indicated below. This analysis assumes that all other variables remain constant.

As at December 31, 2021 an increase or decrease of 5% of the gold price would have the following equal or opposite effect on the:

Consolidated statement of financial position:

|  | Increase |  |  | Decrease |
Derivative financial liabilities - Gold loan |  |  | 143 |  |  |  | (143 | )
Derivative financial liabilities - Call option |  |  | 11 |  |  |  | (11 | )
|  |  | 154 |  |  |  | (154 | )

Consolidated statement of profit or loss and other comprehensive income:

|  | Increase |  |  | Decrease |
Fair value loss on derivative financial instruments - Gold loan |  |  | 143 |  |  |  | (143 | )
Fair value loss on derivative financial instruments - Call option |  |  | 11 |  |  |  | (11 | )
|  |  | 154 |  |  |  | (154 | )

F- 59

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

33 | Financial Instruments and risk management (continued)
(f) | Market risk (continued)

The Group’s revenues had full exposure to the gold price up to December 13, 2021 when the Gold call option agreement was concluded (refer note 14.2).

34 | Dividends

|  | 2021 |  |  | 2020 |  |  | 2019 |
Dividends paid to owners of the Company (excluding NCI) |  |  | 6,068 |  |  |  | 3,887 |  |  |  | 2,969 |

Quarterly dividend per share history:

Declaration date |  | cents per share |
January 10, 2019 |  |  | 6.875 |
April 11, 2019 |  |  | 6.875 |
July 11, 2019 |  |  | 6.875 |
October 10, 2019 |  |  | 6.875 |
January 16, 2020 |  |  | 7.5 |
May 14, 2020 |  |  | 7.5 |
July 16, 2020 |  |  | 8.5 |
October 15, 2020 |  |  | 10.0 |
January 14, 2021 |  |  | 11.00 |
April 15, 2021 |  |  | 12.00 |
July 15, 2021 |  |  | 13.00 |
October 14, 2021 |  |  | 14.00 |

35 | Contingencies

The Group may be subject to various claims that arise in the normal course of business. Management believes there are no contingent liabilities to report.

F-60

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

36 | Related parties

Directors of the company, as well as certain executives, are considered key management. For entities within the Group refer to note 37.

Employee contracts between Caledonia Mining South Africa Proprietary Limited, the Company and key management, include an option for respective key management to terminate such employee contract in the event of a change in control of the Company and to receive a severance payment equal to two years’ compensation. If this was triggered as at December 31, 2021 the severance payment would have amounted to $8,214 (2020: $8,338, 2019: $6,259). A change in control would constitute:

| ● | the acquisition of more than 50% of the shares; or

| ● | the acquisition of right to exercise the majority of the voting rights of shares; or

| ● | the acquisition of the right to appoint the majority of the board of directors; or

| ● | the acquisition of more than 50% of the assets of the Group.

Key management personnel and director transactions:

A number of related parties transacted with the Group in the reporting period. The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows:

|  | 2021 |  |  | 2020 |  |  | 2019 |
Key management salaries and bonuses |  |  | 3,245 |  |  |  | 2,915 |  |  |  | 2,362 |
Cash-settled share-based expense* |  |  | 540 |  |  |  | 1,280 |  |  |  | 723 |
|  |  | 3,785 |  |  |  | 4,195 |  |  |  | 3,085 |

Employees, officers, directors, consultants and other service providers also participate in the OEICP (see note 12.1(a)). Group entities are set out in note 37.

Refer to note 5 and note 28 for transactions with non-controlling interests. Refer to note 38 for management fees between Caledonia Mining South Africa Proprietary Limited and Blanket Mine (1983) (Private) Limited.

* Amount inclusive of $123 (2020: $295, 2019: $107) classified as production costs.

F-61

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

37 | Group entities

| Functional currency | Country of incorporation |  | Legal shareholding |  |  | Intercompany balances with holding company |
|  |  |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Caledonia Holdings Zimbabwe (Private) Limited | $ | Zimbabwe |  |  | 100 |  |  |  | 100 |  |  |  | - |  |  |  | - |
Caledonia Mining Services (Private) Limited | $ | Zimbabwe |  |  | 100 |  |  |  | 100 |  |  |  | - |  |  |  | - |
Fintona Investments Proprietary Limited | ZAR | South Africa |  |  | 100 |  |  |  | 100 |  |  |  | (14,859 | ) |  |  | (14,859 | )
Caledonia Mining South Africa Proprietary Limited | ZAR | South Africa |  |  | 100 |  |  |  | 100 |  |  |  | 1,406 |  |  |  | 612 |
Greenstone Management Services Holdings Limited | $ | United Kingdom |  |  | 100 |  |  |  | 100 |  |  |  | 22,916 |  |  |  | 20,818 |
Blanket Mine (1983) (Private) Limited (2) | $ | Zimbabwe |  |  | 64 |  |  |  | 64 |  |  |  | 5,765 |  |  |  | 3,980 |
Blanket Employee Trust Services (Private) Limited (BETS) (1) | $ | Zimbabwe |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |

(1) BETS and the Community Trust are consolidated as structured entities.

(2) Refer to note 5 for the effective shareholding. NCI has a 13.2% (2020: 13.2%, 2019: 16.2%) interest in cash flows of Blanket only.

38 | Operating Segments

The Group's operating segments have been identified based on geographic areas. 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 reports on at least a quarterly basis. Zimbabwe and South Africa describe the operations of the Group's reportable segments. The Zimbabwe operating segment comprises Caledonia Holdings Zimbabwe (Private) Limited and subsidiaries Blanket Mine (1983) (Private) Limited and Caledonia Mining Services (Private) Limited. The South African geographical segment comprises a gold mine that is on care and maintenance (and now sold), as well as sales made by Caledonia Mining South Africa Proprietary Limited to the Blanket Mine. The holding company (Caledonia Mining Corporation Plc) and Greenstone Management Services Holdings Limited (a UK company) responsible for administrative functions within the Group are taken into consideration in the strategic decision-making process of the CEO and are therefore included in the disclosure below. Reconciling amounts do not represent a separate segment. 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 report that are reviewed by the Group's CEO. 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.

F- 62

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

38 | Operating Segments (continued)

Information about reportable segments

For the twelve months ended December 31, 2021 |  | Zimbabwe |  |  | South Africa |  |  | Inter-group eliminations adjustments |  |  | Corporate and other reconciling amounts |  |  | Total |
Revenue |  |  | 121,329 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 121,329 |
Inter-segmental revenue |  |  | – |  |  |  | 21,662 |  |  |  | (21,662 | ) |  |  | – |  |  |  | – |
Royalty |  |  | (6,083 | ) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (6,083 | )
Production costs |  |  | (53,117 | ) |  |  | (19,902 | ) |  |  | 19,893 |  |  |  | – |  |  |  | (53,126 | )
Depreciation |  |  | (8,348 | ) |  |  | (120 | ) |  |  | 466 |  |  |  | (44 | ) |  |  | (8,046 | )
Other income |  |  | 47 |  |  |  | (1 | ) |  |  | – |  |  |  | – |  |  |  | 46 |
Other expenses |  |  | (3,241 | ) |  |  | – |  |  |  | – |  |  |  | (3,895 | ) |  |  | (7,136 | )
Administrative expenses |  |  | (128 | ) |  |  | (2,867 | ) |  |  | (2 | ) |  |  | (6,094 | ) |  |  | (9,091 | )
Management fee |  |  | (2,908 | ) |  |  | 2,908 |  |  |  | – |  |  |  | – |  |  |  | – |
Cash-settled share-based expense |  |  | – |  |  |  | 29 |  |  |  | 691 |  |  |  | (1,197 | ) |  |  | (477 | )
Net foreign exchange gain (loss) |  |  | 1,182 |  |  |  | (295 | ) |  |  | (92 | ) |  |  | 389 |  |  |  | 1,184 |
Fair value loss on derivative assets and liabilities |  |  | – |  |  |  | (105 | ) |  |  | – |  |  |  | (135 | ) |  |  | (240 | )
Net finance cost |  |  | (1,614 | ) |  |  | (2 | ) |  |  | – |  |  |  | 1,255 |  |  |  | (361 | )
Profit before tax |  |  | 47,119 |  |  |  | 1,307 |  |  |  | (706 | ) |  |  | (9,721 | ) |  |  | 37,999 |
Tax expense |  |  | (14,356 | ) |  |  | (652 | ) |  |  | 151 |  |  |  | – |  |  |  | (14,857 | )
Profit after tax |  |  | 32,763 |  |  |  | 655 |  |  |  | (555 | ) |  |  | (9,721 | ) |  |  | 23,142 |

As at December 31, 2021 |  | Zimbabwe |  |  | South Africa |  |  | Inter-group eliminations adjustments |  |  | Corporate and other reconciling amounts |  |  | Total |
Geographic segment assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current (excluding intercompany) |  |  | 34,440 |  |  |  | 2,457 |  |  |  | (162 | ) |  |  | 16,198 |  |  |  | 52,933 |
Non-Current (excluding intercompany) |  |  | 159,612 |  |  |  | 2,315 |  |  |  | (4,880 | ) |  |  | 897 |  |  |  | 157,944 |
Expenditure on property, plant and equipment (note 18) |  |  | 30,575 |  |  |  | 1,713 |  |  |  | (1,019 | ) |  |  | – |  |  |  | 31,269 |
Expenditure on evaluation and exploration assets (note 19) |  |  | 5,554 |  |  |  | – |  |  |  | – |  |  |  | 163 |  |  |  | 5,717 |
Intercompany balances |  |  | 34,512 |  |  |  | 9,131 |  |  |  | (91,697 | ) |  |  | 48,054 |  |  |  | – |
Geographic segment liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current (excluding intercompany) |  |  | (10,042 | ) |  |  | (1,606 | ) |  |  | – |  |  |  | (6,040 | ) |  |  | (17,688 | )
Non-current (excluding intercompany) |  |  | (11,535 | ) |  |  | (313 | ) |  |  | 322 |  |  |  | (1,107 | ) |  |  | (12,633 | )
Intercompany balances |  |  | (12,414 | ) |  |  | (35,467 | ) |  |  | 91,697 |  |  |  | (43,816 | ) |  |  | – |

F- 63

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

38 | Operating Segments (continued)

For the twelve months ended December 31, 2020 |  | Zimbabwe |  |  | South Africa |  |  | Inter-group eliminations adjustments |  |  | Corporate and other reconciling amounts |  |  | Total |
Revenue |  |  | 100,002 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 100,002 |
Inter-segmental revenue |  |  | – |  |  |  | 23,214 |  |  |  | (23,214 | ) |  |  | – |  |  |  | – |
Royalty |  |  | (5,007 | ) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (5,007 | )
Production costs |  |  | (44,032 | ) |  |  | (20,318 | ) |  |  | 20,639 |  |  |  | – |  |  |  | (43,711 | )
Depreciation |  |  | (4,920 | ) |  |  | (91 | ) |  |  | 424 |  |  |  | (41 | ) |  |  | (4,628 | )
Other income |  |  | 4,751 |  |  |  | 14 |  |  |  | – |  |  |  | – |  |  |  | 4,765 |
Other expenses |  |  | (5,180 | ) |  |  | (114 | ) |  |  | – |  |  |  | (21 | ) |  |  | (5,315 | )
Administrative expenses |  |  | (156 | ) |  |  | (2,237 | ) |  |  | 10 |  |  |  | (5,614 | ) |  |  | (7,997 | )
Management fee |  |  | (2,492 | ) |  |  | 2,492 |  |  |  | – |  |  |  | – |  |  |  | – |
Cash-settled share-based expense |  |  | – |  |  |  | (114 | ) |  |  | 634 |  |  |  | (1,933 | ) |  |  | (1,413 | )
Net foreign exchange gain (loss) |  |  | 4,618 |  |  |  | 132 |  |  |  | (272 | ) |  |  | (173 | ) |  |  | 4,305 |
Fair value loss on derivative assets and liabilities |  |  | – |  |  |  | (164 | ) |  |  | – |  |  |  | (102 | ) |  |  | (266 | )
Net finance cost |  |  | (352 | ) |  |  | 47 |  |  |  | – |  |  |  | – |  |  |  | (305 | )
Dividends (paid) received |  |  | (2,198 | ) |  |  | (1,355 | ) |  |  | – |  |  |  | 3,553 |  |  |  | – |
Profit before tax |  |  | 45,034 |  |  |  | 1,506 |  |  |  | (1,779 | ) |  |  | (4,331 | ) |  |  | 40,430 |
Tax expense |  |  | (14,446 | ) |  |  | (854 | ) |  |  | 380 |  |  |  | (253 | ) |  |  | (15,173 | )
Profit after tax |  |  | 30,588 |  |  |  | 652 |  |  |  | (1,399 | ) |  |  | (4,584 | ) |  |  | 25,257 |

As at December 31, 2020 |  | Zimbabwe |  |  | South Africa |  |  | Inter-group eliminations adjustments |  |  | Corporate and other reconciling amounts |  |  | Total |
Geographic segment assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current (excluding intercompany) |  |  | 27,070 |  |  |  | 5,320 |  |  |  | (194 | ) |  |  | 12,390 |  |  |  | 44,586 |
Non-Current (excluding intercompany) |  |  | 133,568 |  |  |  | 716 |  |  |  | (4,237 | ) |  |  | 3,287 |  |  |  | 133,334 |
Expenditure on property, plant and equipment (note 18) |  |  | 26,391 |  |  |  | 151 |  |  |  | (1,887 | ) |  |  | 123 |  |  |  | 24,778 |
Expenditure on evaluation and exploration assets (note 19) |  |  | 98 |  |  |  | – |  |  |  | – |  |  |  | 2,961 |  |  |  | 3,059 |
Intercompany balances |  |  | 17,482 |  |  |  | 6,752 |  |  |  | (69,144 | ) |  |  | 44,910 |  |  |  | – |
Geographic segment liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current (excluding intercompany) |  |  | (6,831 | ) |  |  | (1,797 | ) |  |  | – |  |  |  | (1,336 | ) |  |  | (9,964 | )
Non-current (excluding intercompany) |  |  | (8,065 | ) |  |  | – |  |  |  | 264 |  |  |  | (2,112 | ) |  |  | (9,913 | )
Intercompany balances |  |  | – |  |  |  | (34,020 | ) |  |  | 69,144 |  |  |  | (35,124 | ) |  |  | – |

Major customer

Revenues from Fidelity amounted to $121,329 (2020: $100,002) for the twelve months ended December 31, 2021. Refer to note 7.

F-64

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

39 | Defined Contribution Plan

Under the terms of the Mining Industry Pension Fund (“Fund”) in Zimbabwe, eligible employees contribute a fixed percentage of their eligible earnings to the Fund. Blanket Mine makes a matching contribution plus an inflation levy as a fixed percentage of eligible earnings of these employees. The total contribution by Blanket Mine for the year ended December 31, 2021 was $898 (2020: $796, 2019: $506).

40 | COVID-19

Due to the worldwide COVID-19 outbreak, material uncertainties may come into existence that could influence management’s going concern assumption. This may affect Management’s accuracy of predicting the impact that COVID-19 may have on:

| ● | global gold prices;

| ● | demand for gold and the ability to refine and sell gold produced;

| ● | the severity and the length of potential measures taken by governments to manage the spread of the disease, and their effect on labour availability and supply lines;

| ● | availability of government supplies, such as water and electricity;

| ● | local currency purchasing power; or

| ● | ability to obtain funding.

With potential lockdowns by Governments across the globe the Group’s supply chain has continued to function at a level that is adequate to augment the Group’s inventories, which management believes are sufficient to maintain normal production without interruption and accordingly the current situation bears no impact on management’s going concern assumption.

Further management had to incur additional costs to ensure the wellbeing of its employees and made donations to stakeholders in Zimbabwe to assist in curbing the effects of COVID-19. The cost related to these expenditures are disclosed in notes 9 and 13.

Work on the Central Shaft project from April 2020 was delayed by restrictions on the movement of specialised personnel and the transport of equipment due to the coronavirus pandemic. The Central Shaft was commissioned in the first quarter of 2021 instead of the fourth quarter of 2020. The delay in commissioning affected production for 2021and is expected to result in higher planned capital expenditure for 2022. There is no change to the target production rate of 80,000 ounces in from 2022 onwards and at the date of approval of the consolidated financial statements the severity of the effects of COVID-19 appears to be diminishing in the jurisdictions where the Company operates.

At the date of the authorisation of the financial statements management is of the opinion that the effects of COVID-19 have been considered in making significant judgements and estimates, valuations and evaluating our going concern principle.

F-65

Caledonia Mining Corporation Plc Notes to the Consolidated Financial Statements For the years ended December 31, 2021, 2020 and 2019 (in thousands of United States Dollars, unless indicated otherwise

41 | Subsequent events
41.1 | Cap and collar hedge

On February 17, 2022 the Company entered into a zero cost contract to hedge 20,000 ounces of gold over a period of 5 months from March to July 2022. The hedging contract has a cap of $1,940 and a collar of $1,825 over 4,000 ounces of gold per month expiring at the end of each month over the 5-month period.

On March 9, 2022 in response to a very volatile gold price the Company purchased a matching quantity of call options at a strike price above the cap at a total cost of $796,000 over 4,000 ounces of gold per month at strike prices of $2,100 per ounce from March 2022 to May 2022 and $2,200 per ounce from June 2022 to July 2022 in order to limit margin exposure and reinstate gold price upside above the strike price. The future impact of the hedges is indeterminable at the date of issue of these consolidated financial statements and will be quantified in the condensed consolidated interim financial statements as at March 31, 2022.

41.2 | Connemara North

On conclusion of management’s drilling program it was decided not to exercise the option over the Connemara North claims as the results of the exploration work indicated that the property does not meet Caledonia’s strategic objectives. The decision to not exercise the option won’t have an impact on theses consolidated financial statements as the information required to make the decision was not available by December 31, 2021. The decision will impair the Exploration and evaluation assets and increase the impairment expense by $463 in the consolidated financial statements as at March 31, 2022.

The financial effects of the above and the results of the first quarter of 2022 are available on Caledonia’s website (www.caledoniamining.com).

F-66

SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.

Date May 17, 2022

CALEDONIA MINING CORPORATION PLC
By: | /s/ Mark Learmonth
| Mark Learmonth Chief Financial Officer

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