EX-99.2 3 exh_992.htm EXHIBIT 99.2

Exhibit 99.2

CALEDONIA MINING CORPORATION PLC |  | May 12, 2025

Management’s Discussion and Analysis

This management’s discussion and analysis (“MD&A”) of the consolidated operating results and financial position of Caledonia Mining Corporation Plc (“Caledonia” or "the Company”) is for the quarter ended March 31, 2025 (“Q1 2025” or the “Quarter”). It should be read in conjunction with the Unaudited Condensed Consolidated Interim Financial Statements of Caledonia for the Quarter (the “Interim Financial Statements”) and the Audited Consolidated Financial Statements of Caledonia for December 31, 2024, which are available from SEDAR+ at www.sedarplus.ca or from Caledonia’s website at www.caledoniamining.com. The Interim Financial Statements and related notes have been prepared in accordance with International Financial Reporting Accounting Standards as issued by the International Accounting Standards Board (“IFRS”). In this MD&A, the terms “Caledonia”, "the Company”, "the Group”, “we”, “our” and “us” refer to the consolidated operations of Caledonia Mining Corporation Plc and its subsidiaries unless otherwise specifically noted or the context requires otherwise.

Note that all currency references in this document are in US Dollars (also “$”, “US$” or “USD”), unless stated otherwise. The MD&A is focused on material matters.

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TABLE OF CONTENTS

1. OVERVIEW | 4
2. SUMMARY | 4
3. SUMMARY FINANCIAL RESULTS | 9
3.1 Revenue analysis | 10
3.2 Production, other cost and other income analysis | 11
3.3 Cash flow analysis | 19
3.3.3 Financing activities | 20
3.4 Analysis of financial position | 22
3.5 Supplementary financial information | 23
4. OPERATIONS | 24
4.1. Safety, Health and Environment (“SHE”) | 24
4.2. Social Investment and Contribution to the Zimbabwean Economy - Blanket | 26
4.3. Gold Production - Blanket | 27
4.4. Capital Projects - Blanket | 28
4.5. Indigenisation | 29
4.6. Bilboes | 29
4.7. Zimbabwe Commercial Environment | 30
4.8. Solar plant | 33
4.9. Opportunities and Outlook | 33
5. EXPLORATION | 35
6. INVESTING | 36
7. LIQUIDITY AND CAPITAL RESOURCES | 37
8. OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL COMMITMENTS AND CONTINGENCIES | 37
9. ADJUSTED EARNINGS PER SHARE | 38
10. RELATED PARTY TRANSACTIONS | 39
11. RESTATEMENT OF COMPARATIVE INFORMATION | 39
12. INTERNAL CONTROLS OVER FINANCIAL REPORTING | 40
12.1 Disclosure Controls and Procedures | 40
12.2 Changes in internal control over financial reporting | 41
12.3 Limitation of DC&P and ICFR | 41
13. CRITICAL ACCOUNTING ESTIMATES | 41
13.1. Site restoration provisions | 41
13.2. Exploration and evaluation (“E&E”) expenditure | 41
13.3. Income taxes | 42

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13.4. Impairment | 42
13.5. Depreciation | 42
13.6. Mineral reserves and resources | 42
14. FINANCIAL INSTRUMENTS | 43
14.1. Commodity risk | 43
14.2. Credit risk | 43
14.3. Liquidity risk | 43
14.4. Currency risk | 44
14.5. Interest rate risk | 44
15. SECURITIES OUTSTANDING | 44
16. RISK ANALYSIS | 44
17. FORWARD LOOKING STATEMENTS | 45
18. QUALIFIED PERSON | 46

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1. OVERVIEW

Caledonia is a Zimbabwean-focused exploration, development, and mining corporation. Caledonia owns a 64% stake in the gold-producing Blanket Mine (“Blanket”), and 100% stakes in the Bilboes sulphide project and the Motapa and Maligreen gold exploration projects, all situated in Zimbabwe. Caledonia’s shares are listed on the NYSE American LLC (“NYSE American”), depositary interests in Caledonia’s shares are admitted to trading on AIM of the London Stock Exchange plc and depositary receipts in Caledonia’s shares are listed on the Victoria Falls Stock Exchange (“VFEX”) (all under the symbols “CMCL”).

2. SUMMARY

| Q1 | Comment |
2025 | 2024 |
Gold produced (oz) | 19,106 | 17,476 | Gold produced in the Quarter was 9.3% higher than the first quarter of 2024 (the “comparative” or “comparable quarter” or “Q1 2024”). 18,671 ounces of gold were produced at Blanket in the Quarter (Q1 2024: 17,050 ounces), a 9.5% increase from the comparable quarter due to higher milled tonnes offset by lower grade and lower gold recovery. 435 ounces of gold were produced from the Bilboes oxide mine in the Quarter (Q1 2024: 426 ounces). Although the mine was placed on care and maintenance at the end of September 2023, leaching of the heap leach pads continues for as long as it makes a cash contribution. |
On-mine cost per ounce ($/oz)1 | 1,202 | 1,065 | On-mine cost per ounce in the Quarter increased by 12.9% compared to the comparable quarter due to higher production costs at Blanket mainly on labour, power and consumable costs. |
All-in sustaining cost (“AISC”) per ounce1 | 1,797 | 1,350 | The AISC per ounce in the Quarter increased by 33.1% compared to the comparative quarter, predominantly due to the higher on-mine costs, increased sustaining capex and administrative expenses. AISC includes the benefit of the solar plant electricity saving ($46 per ounce for the Quarter) which will not recur following the sale of the solar plant in April 2025. |
Average realised gold price ($/oz)1 | 2,896 | 2,040 | The average realised gold price reflects international spot prices. |
Gross profit2 ($’000) | 26,926 | 13,815 | Gross profit for the Quarter increased from the comparative quarter, predominantly due to the higher gold price and ounces sold. |

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| Q1 | Comment |
2025 | 2024 |
Net profit (loss) attributable to shareholders ($’000) | 8,915 | 1,486* | Net profit attributable to shareholders is higher due to higher gross profit and lower foreign exchange losses for the Quarter compared to the comparative quarter, partly offset by higher administrative expenses. |
Basic IFRS earnings (loss) per share (“EPS”) (cents) | 44.6 | 7.3* | Basic IFRS EPS reflects the movement in IFRS profit attributable to shareholders. |
Adjusted EPS (cents)1 | 58.5 | 9.7* | Adjusted EPS excludes inter alia unrealised intercompany foreign exchange gains and losses, deferred tax and fair value movements on derivative financial instruments. |
Net cash from operating activities ($’000) | 13,079 | 4,887 | Net cash from operating activities increased in the Quarter compared to the comparative quarter due to higher operating profit offset by investing activities. |
Net cash and cash equivalents ($’000) | (4,572) | (14,160) | Net cash increased due to the higher cash inflow from operating activities in the Quarter compared to the comparative quarter. |

1 Non-IFRS measures such as “On-mine cost per ounce”, “AISC”, “average realised gold price” and “adjusted EPS” are used throughout this document. Refer to section 3.2. and section 7 of this MD&A for a discussion of non-IFRS measures.

2 Gross profit is after deducting royalties, production costs and depreciation but before administrative expenses, other income, interest and finance charges and taxation.

* Restated - Refer to section 11 and section 12.

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Production at Blanket

Gold production at Blanket for the Quarter was 18,671 ounces, higher than the 17,050 ounces produced in the comparative quarter. The increase was due to higher tonnes milled of 201,755 tonnes, offset by a lower grade.

Blanket sold 18,953 ounces in the Quarter. This represents a 2.7% increase from the comparable quarter, when 18,450 ounces were sold. The ounces sold in the Quarter include a net movement of 283 ounces of gold work in progress.

Solar plant sale

On April 11, 2025, the Company sold its Zimbabwe subsidiary Caledonia Mining Services (Private) Limited ("CMS"), to CrossBoundary Energy Holdings ("CBE") for a pre-tax consideration of $22.35 million which was paid in cash. CMS owns and operates the 12.2MWac solar plant that supplies power to Blanket Mine. Under the terms of the sale, the solar plant will continue to provide Blanket Mine with power under an exclusive power purchase agreement, ensuring a reliable renewable energy source for the mine.

The construction of the solar plant was initially financed by a registered offering of Caledonia's shares in the USA in 2020, which raised $13 million through the issue of 597,963 shares. Caledonia's consolidated net debt as at April 9, 2025 (i.e. immediately before the transfer of the cash consideration on April 10, 2025) was $3.8 million (December 31, 2024: net debt $8.7 million). Accounting for receipt of the cash consideration, Caledonia's pro forma consolidated net cash balance was $18.6 million. The majority of the proceeds of the sale have been invested in short and medium-term interest-earning deposit accounts and will be retained to invest in further growth opportunities.

Bilboes feasibility study

Caledonia has been progressing work on a feasibility study for the Bilboes project, initially due for publication in the Quarter. While ongoing work confirms the project has attractive economics, several new developments plus higher indicated capital costs have prompted the Company to defer the finalisation of the feasibility study in order to undertake further work to allow for the evaluation of key, and certain new factors that we expect could positively impact project economics. Caledonia remains committed to maximising Caledonia’s net present value per share: this means identifying the optimal balance between growth and equity dilution, having regard to an acceptable degree of debt funding.

Exploration at Motapa

After the encouraging results from the 2024 exploration programme, as announced on November 11, 2024, in terms of strike width, length and grade, a further $2.8 million has been allocated to exploration activities at Motapa for the 2025 year. With Motapa's location adjacent to Bilboes, significant synergies could be obtained should a viable resource body be identified through the planned exploration programme.

The 2025 exploration programme for Motapa encompasses the following

· | Motapa North: Reverse Circulation ("RC") and Diamond Drilling ("DD") programme of 18,465 meters and 970 meters respectively focused on defining an open pit mineral resource in the near-term.

· | Motapa Central: RC and DD programme of 5,385 meters and 510 meters respectively at the Mpudzi section, targeting a near-term oxide mineral resource which may be amenable to leaching at the nearby Bilboes leach pad.

· | Motapa South: RC and DD programme of 2,000 meters and 300 meters respectively, targeting a potential oxide zone.

The planned exploration for 2025 is further discussed in section 5.

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2025 Production, cost and capital expenditure

Blanket’s gold production guidance for 2025 is 74,000 to 78,000 ounces. This reflects the current mine scheduling, which anticipates that Blanket will continue to mine lower-grade areas in 2025.

Blanket’s on-mine cost per ounce is forecast at $1,050 - $1,150 (up from $950 to $1,050 per ounce in 2024), while AISC per ounce is expected to be in the range of $1,690 - $1,790 (up from $1,450 - $1,550 per ounce in 2024). Management is confident that Blanket will achieve its on-mine cost per ounce and AISC per ounce guidance for 2025. Cost guidance for 2025 reflects higher labour, HR and IT expenses and increased sustaining capital expenditure. Increased expenditure in these areas is part of the ongoing modernisation of the business, building a foundation for the extended operating life at Blanket, growth arising from Bilboes and Motapa, and future profitability through cost reductions. The 2025 on-mine cost per ounce includes $20 per ounce of environmental, social and governance ("ESG") cost.

The 2025 capital expenditure programme totals $41.0 million, with $34.1 million allocated to Blanket and $6.9 million at Bilboes and Motapa. These investments aim to modernise operations and improve mining efficiency at Blanket. While there will be short-term cost pressures, the long-term goal is to reduce costs, improve profitability and operational resilience and extend Blanket's mine life and thereby ensure the continued success of Blanket. All expenditure will be funded from cash generation and cash reserves with no anticipated impact on the dividend. Capital expenditure for 2025 is further discussed in section 4.9.

Change in directors and management

On February 14, 2025 Caledonia announced that Mr. Stefan Buys and Ms. Lesley Goldwasser had joined the Company’s board of directors (“the Board”) as independent non-executive directors. Mr. Johan Holtzhausen, who has served on the Board since 2013, did not seek reappointment by shareholders at the annual general meeting of shareholders which was held on May 6, 2025 and therefore retired from the Board and as chair of the Audit Committee with effect from that meeting. Ms. Tariro Gadzikwa, an independent non-executive director, was appointed by the Board to take over from Mr. Holtzhausen as chair of the Audit Committee immediately after the annual general meeting.

On March 31, 2025, Mr. Chester Goodburn stepped down as Chief Financial Officer and was replaced by Mr. Ross Jerrard.

During the Quarter, Mr. Admire Makuvaro was appointed as Group Head of Projects. Mr. Makuvaro has several decades of experience in constructing large scale mining and metallurgical processing operations; his immediate focus will be on assisting in the development and subsequent construction of the Bilboes sulphide project, but he will also be responsible for other large capital projects in the Group.

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Strategy and Outlook: increased focus on growth opportunities

The immediate strategic focus is to:

| • | maintain production at Blanket at the targeted range of 74,000 to 78,000 ounces of gold for 2025 and at a similar level for 2026, whilst modernising operations and improving mining and operational cost efficiencies;

| • | Engage in further exploration at Blanket with the objectives to upgrade existing inferred mineral resources to measured and indicated mineral resources so that Blanket’s life of mine may be extended and to commence exploration on other target areas on Blanket’s lease area which are outside the current mine footprint;

| • | continue to evaluate development and funding options for the Bilboes sulphide project; and

| • | continue with exploration activities at Motapa with a view to identifying sulphide and oxide mineral resources. Any sulphide mineral resources would eventually be treated as part of the Bilboes sulphide project; oxide mineral resources may create short term, relatively short-life revenue opportunities.

The strategy and outlook of Caledonia is further discussed in section 4.9 of this MD&A.

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3. SUMMARY FINANCIAL RESULTS

The table below sets out the consolidated profit or loss for the Quarter and the comparative periods prepared under IFRS.

Condensed Consolidated Statements of profit or loss and Other comprehensive income (Unaudited)
($'000's) |  | 3 months ended March 31,
|  |  | 2025 |  |  |  | 2024 |  |  |  | 2023 |
|  |  |  |  |  |  | Restated* |  |  |  | Restated* |
Revenue |  |  | 56,178 |  |  |  | 38,528 |  |  |  | 29,435 |
Royalty |  |  | (2,771 | ) |  |  | (1,934 | ) |  |  | (1,480 | )
Production costs |  |  | (22,622 | ) |  |  | (18,960 | ) |  |  | (19,850 | )
Depreciation |  |  | (3,859 | ) |  |  | (3,819 | ) |  |  | (2,255 | )
Gross profit |  |  | 26,926 |  |  |  | 13,815 |  |  |  | 5,850 |
Net foreign exchange (loss) gain |  |  | (1,252 | ) |  |  | (4,882 | ) |  |  | 36 |
Administrative expenses |  |  | (4,598 | ) |  |  | (2,611 | ) |  |  | (5,938 | )
Net derivative financial instrument expense |  |  | (1,592 | ) |  |  | (302 | ) |  |  | (434 | )
Equity-settled share-based credit/(expense) |  |  | 144 |  |  |  | (201 | ) |  |  | (110 | )
Cash-settled share-based expense |  |  | (158 | ) |  |  | (53 | ) |  |  | (280 | )
Other expenses |  |  | (843 | ) |  |  | (600 | ) |  |  | (640 | )
Other income |  |  | 66 |  |  |  | 164 |  |  |  | 18 |
Operating profit (loss) |  |  | 18,693 |  |  |  | 5,330 |  |  |  | (1,498 | )
Finance income |  |  | 6 |  |  |  | 6 |  |  |  | 5 |
Finance cost |  |  | (900 | ) |  |  | (732 | ) |  |  | (772 | )
Profit (loss) before tax |  |  | 17,799 |  |  |  | 4,604 |  |  |  | (2,265 | )
Tax expense |  |  | (6,636 | ) |  |  | (2,530 | ) |  |  | (2,380 | )
Profit (loss) for the period |  |  | 11,163 |  |  |  | 2,074 |  |  |  | (4,645 | )
Other comprehensive income |  |  |  |  |  |  |  |  |  |  |  |
Items that are or may be reclassified to profit or loss |  |  |  |  |  |  |  |  |  |  |  |
Exchange differences on translation of foreign operations |  |  | 207 |  |  |  | (144 | ) |  |  | (369 | )
Total comprehensive income for the period |  |  | 11,370 |  |  |  | 1,930 |  |  |  | (5,014 | )
Profit (loss) attributable to: |  |  |  |  |  |  |  |  |  |  |  |
Owners of the Company |  |  | 8,915 |  |  |  | 1,486 |  |  |  | (5,356 | )
Non-controlling interests |  |  | 2,248 |  |  |  | 588 |  |  |  | 711 |
Profit (loss) for the period |  |  | 11,163 |  |  |  | 2,074 |  |  |  | (4,645 | )
Total comprehensive income attributable to: |  |  |  |  |  |  |  |  |  |  |  |
Owners of the Company |  |  | 9,122 |  |  |  | 1,342 |  |  |  | (5,725 | )
Non-controlling interests |  |  | 2,248 |  |  |  | 588 |  |  |  | 711 |
Total comprehensive income for the period |  |  | 11,370 |  |  |  | 1,930 |  |  |  | (5,014 | )
Earnings (loss) per share (cents) |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings (loss) per share |  |  | 44.6 |  |  |  | 7.3 |  |  |  | (32.2 | )
Diluted earnings (loss) per share |  |  | 44.6 |  |  |  | 7.3 |  |  |  | (32.2 | )
Adjusted earnings per share (cents) |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 58.5 |  |  |  | 9.7 |  |  |  | (26.3 | )
Dividends paid per share# |  |  | - |  |  |  | 14.0 |  |  |  | 14.0 |

* Refer to section 11 and section 12, # Refer section 3.3.3. |  |

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3.1 Revenue analysis

The table below reconciles “Average gold price per ounce” to the revenue shown in the financial statements which have been prepared under IFRS.

Reconciliation of average realised gold price per ounce
($’000’s, unless otherwise indicated)
|  |  | 3 months ended Mar 31, |
|  |  | 2025 |  |  |  | 2024 |
Revenue (IFRS) |  |  | 56,178 |  |  |  | 38,528 |
Revenues from sales of silver |  |  | (32 | ) |  |  | (26 | )
Revenues from sales of gold |  |  | 56,146 |  |  |  | 38,502 |
Gold ounces sold (oz) |  |  | 19,388 |  |  |  | 18,876 |
Average realised gold price per ounce (US$/oz) |  |  | 2,896 |  |  |  | 2,040 |

Revenue in the Quarter was 45.8% higher than the comparative quarter due to a 42.0% increase in the average realised price of gold sold and a 2.7% increase in ounces sold. Sales in the Quarter exclude 3,159 ounces (Q1 2024: 1,657) of gold that were held as work-in-progress and sold early in April 2025, and include 3,442 ounces of gold sold that were held as work-in-progress as at December 31, 2024. Blanket accumulated an ore stockpile of approximately 15,000 tonnes as at March 31, 2025.

The royalty rate payable to the Zimbabwe Government was unchanged at 5%.

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3.2 Production, other cost and other income analysis

3.2.1 Cost per ounce

Cost per ounce of gold sold
(US$/ounce) |  |  |  |
|  | Bilboes Oxide Mine |  | Blanket |  | Consolidated
|  | 3 months ended |  | 3 months ended |  | 3 months ended
|  |  | Mar 31 |  |  | Mar 31 |  |  | Mar 31 |
|  |  | 2025 |  |  |  | 2024 |  |  |  | 2025 |  |  |  | 2024 |  |  |  | 2025 |  |  |  | 2024 |
On-mine cost per ounce3 |  |  | 2,114 |  |  |  | 1,820 |  |  |  | 1,181 |  |  |  | 1,048 |  |  |  | 1,202 |  |  |  | 1,065 |
AISC per ounce3 |  |  | 2,288 |  |  |  | 1,900 |  |  |  | 1,785 |  |  |  | 1,337 |  |  |  | 1,797 |  |  |  | 1,350 |
All-in cost per ounce3 |  |  | 2,288 |  |  |  | 1,900 |  |  |  | 1,855 |  |  |  | 1,433 |  |  |  | 1,914 |  |  |  | 1,470 |

Non-IFRS performance measures such as “on-mine cost per ounce”, “AISC per ounce,” and “all-in cost per ounce” are used in this document. Management believes these measures assist investors and other stakeholders in understanding the economics of gold mining over the life cycle of a mine. These measures are calculated on the principles set out by the World Gold Council and are further explained below.

1. On-mine cost per ounce3, which shows the on-mine costs of producing an ounce of gold and includes direct costs that are incurred on day-to-day activity for the mine and excludes once-off retirement and severance costs. ESG costs were included in the on-mine cost as well as in the comparative amounts due to the increased focus on ESG;

2. AISC per ounce3, which shows the on-mine cost per ounce plus royalty paid, additional costs incurred outside the mine (i.e., at offices in Harare, Bulawayo, Johannesburg and Jersey), capital costs required to maintain production at the current levels (sustaining capital investment), the share-based expense (or credit) arising from the awards made to employees under the 2015 Omnibus Equity Incentive Compensation Plan (“OEICP”) less silver by-product revenue; and

3. All-in cost per ounce3, which shows the AISC per ounce plus the costs associated with activities that are undertaken with a view to increasing production (expansion capital investment). Exploration and evaluation costs were included in the all-in cost as well as in the comparative amounts.

A narrow focus on the direct costs of production does not reflect the cost of gold production under IFRS and adds certain capital and other costs. The table below reconciles non-IFRS cost measures to the production costs shown in the financial statements prepared under IFRS.

3 On-mine cost per ounce, AISC per ounce, and all-in cost per ounce are non-IFRS measures.

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Cost per ounce of gold sold |  |  |  |
(US$/ounce) |  |  |  |
|  |  |  |  |  |  |  | Motapa and Bilboes |  |  |  |
|  | Bilboes Oxide Mine |  | Blanket |  | Sulphide Project |  | Consolidated
|  | 3 months ended |  | 3 months ended |  | 3 months ended |  | 3 months ended
|  | Mar 31 |  | Mar 31 |  | Mar 31 |  | Mar 31
|  |  | 2025 |  |  |  | 2024 |  |  |  | 2025 |  |  |  | 2024 |  |  |  | 2025 |  |  |  | 2024 |  |  |  | 2025 |  |  |  | 2024 |
Production cost (IFRS) |  |  | 936 |  |  |  | 784 |  |  |  | 21,686 |  |  |  | 18,176 |  |  |  | - |  |  |  | - |  |  |  | 22,622 |  |  |  | 18,960 |
Cash-settled share-based expense |  |  | (17 | ) |  |  | (9 | ) |  |  | (248 | ) |  |  | (90 | ) |  |  | - |  |  |  | - |  |  |  | (265 | ) |  |  | (99 | )
Less exploration and safety costs |  |  | - |  |  |  | - |  |  |  | (255 | ) |  |  | (220 | ) |  |  | - |  |  |  | - |  |  |  | (255 | ) |  |  | (220 | )
On-mine admin costs, employee incentives and intercompany adjustments |  |  | - |  |  |  | - |  |  |  | 888 |  |  |  | 1,119 |  |  |  | - |  |  |  | - |  |  |  | 888 |  |  |  | 1,119 |
Corporate social responsibility ("CSR") costs |  |  | - |  |  |  | - |  |  |  | 305 |  |  |  | 346 |  |  |  | - |  |  |  | - |  |  |  | 305 |  |  |  | 346 |
On-mine production cost |  |  | 919 |  |  |  | 775 |  |  |  | 22,376 |  |  |  | 19,331 |  |  |  | - |  |  |  | - |  |  |  | 23,295 |  |  |  | 20,106 |
Gold sales (oz) |  |  | 435 |  |  |  | 426 |  |  |  | 18,953 |  |  |  | 18,450 |  |  |  | - |  |  |  | - |  |  |  | 19,388 |  |  |  | 18,876 |
On-mine cost per ounce ($/oz) |  |  | 2,114 |  |  |  | 1,820 |  |  |  | 1,181 |  |  |  | 1,048 |  |  |  | - |  |  |  | - |  |  |  | 1,202 |  |  |  | 1,065 |
Royalty |  |  | 59 |  |  |  | 43 |  |  |  | 2,712 |  |  |  | 1,891 |  |  |  | - |  |  |  | - |  |  |  | 2,771 |  |  |  | 1,934 |
Exploration, remediation and permitting cost |  |  | - |  |  |  | - |  |  |  | 37 |  |  |  | 26 |  |  |  | - |  |  |  | - |  |  |  | 37 |  |  |  | 26 |
Sustaining capital expenditure# |  |  | - |  |  |  | - |  |  |  | 5,759 |  |  |  | 2,581 |  |  |  | - |  |  |  | - |  |  |  | 5,759 |  |  |  | 2,581 |
Sustaining administrative expenses& |  |  | - |  |  |  | - |  |  |  | 4,049 |  |  |  | 1,873 |  |  |  | - |  |  |  | - |  |  |  | 4,049 |  |  |  | 1,873 |
Silver by-product credit |  |  | - |  |  |  | - |  |  |  | (32 | ) |  |  | (26 | ) |  |  | - |  |  |  | - |  |  |  | (32 | ) |  |  | (26 | )
Cash-settled share-based payment expense included in production cost |  |  | 17 |  |  |  | (9 | ) |  |  | 248 |  |  |  | 108 |  |  |  | - |  |  |  | - |  |  |  | 265 |  |  |  | 99 |
Cash-settled share-based payment expense |  |  | - |  |  |  | - |  |  |  | 158 |  |  |  | 53 |  |  |  | - |  |  |  | - |  |  |  | 158 |  |  |  | 53 |
Equity-settled share-based payment expense |  |  | - |  |  |  | - |  |  |  | (144 | ) |  |  | 201 |  |  |  | - |  |  |  | - |  |  |  | (144 | ) |  |  | 201 |
Procurement margin included in on-mine cost* |  |  | - |  |  |  | - |  |  |  | (1,323 | ) |  |  | (1,373 | ) |  |  | - |  |  |  | - |  |  |  | (1,323 | ) |  |  | (1,373 | )
AISC |  |  | 995 |  |  |  | 809 |  |  |  | 33,840 |  |  |  | 24,665 |  |  |  | - |  |  |  | - |  |  |  | 34,835 |  |  |  | 25,474 |

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Cost per ounce of gold sold |  |  |  |
(US$/ounce) |  |  |  |
|  |  |  |  |  |  |  | Motapa and Bilboes |  |  |  |
|  | Bilboes Oxide Mine |  | Blanket |  | Sulphide Project |  | Consolidated
|  | 3 months ended |  | 3 months ended |  | 3 months ended |  | 3 months ended
|  | Mar 31 |  | Mar 31 |  | Mar 31 |  | Mar 31
|  |  | 2025 |  |  |  | 2024 |  |  |  | 2025 |  |  |  | 2024 |  |  |  | 2025 |  |  |  | 2024 |  |  |  | 2025 |  |  |  | 2024 |
Gold sales (oz) |  |  | 435 |  |  |  | 426 |  |  |  | 18,953 |  |  |  | 18,450 |  |  |  | - |  |  |  | - |  |  |  | 19,388 |  |  |  | 18,876 |
AISC per ounce ($/oz) |  |  | 2,288 |  |  |  | 1,900 |  |  |  | 1,785 |  |  |  | 1,337 |  |  |  | - |  |  |  | - |  |  |  | 1,797 |  |  |  | 1,350 |
Non-sustaining administrative expenses& |  |  | - |  |  |  | - |  |  |  | 542 |  |  |  | 738 |  |  |  | - |  |  |  | - |  |  |  | 542 |  |  |  | 738 |
E&E Assets - Motapa |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 341 |  |  |  | 124 |  |  |  | 341 |  |  |  | 124 |
E&E Assets - Bilboes |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 623 |  |  |  | 372 |  |  |  | 623 |  |  |  | 372 |
Permitting and exploration expenses |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | 17 |  |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | 17 |
Non-sustaining capital expenditure# |  |  | - |  |  |  | - |  |  |  | 771 |  |  |  | 1,017 |  |  |  | - |  |  |  | - |  |  |  | 771 |  |  |  | 1,017 |
AIC |  |  | 995 |  |  |  | 809 |  |  |  | 35,158 |  |  |  | 26,437 |  |  |  | 964 |  |  |  | 496 |  |  |  | 37,117 |  |  |  | 27,742 |
Gold sales (oz) |  |  | 435 |  |  |  | 426 |  |  |  | 18,953 |  |  |  | 18,450 |  |  |  | - |  |  |  | - |  |  |  | 19,388 |  |  |  | 18,876 |
All-in costs per ounce |  |  | 2,288 |  |  |  | 1,900 |  |  |  | 1,855 |  |  |  | 1,433 |  |  |  | - |  |  |  | - |  |  |  | 1,914 |  |  |  | 1,470 |

* The on-mine cost reflects the cost incurred on-mine to produce gold. The procurement margin on consumable sales between CMSA and Blanket is not deducted from on-mine cost as the cost represents 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 AISC and all-in cost as these numbers represent the consolidated costs at a group level, excluding intercompany profit margins.

& Administrative expenses relate to costs incurred by the Group to provide services for mining and related activities. Administrative expenses are allocated between AISC and All-in cost.

# Non-sustaining costs are primarily those costs incurred at ‘new operations’ and costs related to ‘major projects at existing operations’ where these projects will materially benefit the operation. All other costs related to existing operations are considered sustaining.

13

On-mine cost per ounce

On-mine costs comprise electricity, labour, consumables, administrative, and other costs directly related to production, such as insurance, Blanket's software licensing, ESG and security.

Analysis of on-mine production costs between Blanket and Bilboes (non IFRS)
($’000’s) |  | 3 months ended
|  | Mar 31,
|  |  | 2025 |  |  |  | 2024 |
Blanket |  |  | 22,376 |  |  |  | 19,331 |
Bilboes |  |  | 919 |  |  |  | 775 |
Total |  |  | 23,295 |  |  |  | 20,106 |
On-mine cost per ounce ($/oz) |  |  | 1,202 |  |  |  | 1,065 |

On-mine production cost per ounce increased by 12.9% in the Quarter compared to the comparative quarter.

The increase in on-mine cost per ounce in the Quarter, compared to the comparative quarter, is illustrated in the graph below.

At Blanket, on-mine production cost increased by 15.8% from $1,048 per ounce in the comparative quarter to $1,181 in the Quarter. On-mine cost at Blanket exclusive of CSR projects cost amounted to $1,165 per ounce.

14

Labour cost increased by $63 per ounce due to a higher headcount, 2025 inflationary increases, production bonuses paid and overtime worked. Higher production bonuses were paid in the Quarter due to the surpassing of production targets set for the Quarter. Bonus payments were paid at maximum achievement level after record first quarter production and tonnage milled which alleviated the effect of lower grades on ounces. A new clocking system is being implemented in the second quarter of 2025 and is expected to improve the monitoring of the labour force and reduce inefficient labour allocation in future.

Consumable costs per ounce at Blanket in the Quarter increased by $33 due to higher repair and maintenance costs at the metallurgical plant and underground equipment in the Quarter compared to the comparative quarter.

Other production costs increased by $39 per ounce due to inflationary increases in ZiG-denominated security, telecom expenses and water levies. Licenses for new IT software acquired in 2024 as part of the ongoing modernisation of the business also contributed to the increase in other production costs.

Power costs per ounce decreased by $1.50 due to reduced reactive energy penalty charges after power factor correction equipment was installed in November 2024. Management is evaluating the current electricity infrastructure usage and is looking at alternative sources of energy that will supplement the current electricity mixture with a view to increasing reliability and quality of supply as well as reducing cost over the mine life of Blanket.

The cost of heap leaching activities at Bilboes marginally increased from the comparative quarter by $5. Leaching activities related to the heap leach pad have covered the care and maintenance cost of the existing Bilboes infrastructure and the leaching will continue for as long as it makes a positive cash contribution after the cost of leaching is incurred. Bilboes is discussed further in section 4.9.

15

AISC

AISC includes inter alia administrative expenses incurred outside Zimbabwe and excludes the intercompany procurement margin and deducts the solar power intercompany profit as this reflects the consolidated cost incurred at the Group level. AISC per ounce for the Quarter was 33.1% higher than the comparative quarter predominantly due to higher on-mine costs, increased administrative and sustaining capital expenditure. Sustaining capital expenditure includes underground capital development, IT software installation predominantly to enhance the on-mine resource management planning abilities, exploration at Blanket, electrical and surface engineering (as detailed in section 3.4). More of the Blanket capital expenditure is allocated to sustaining capital expenditure rather than to expansion (non-sustaining) capital investment which is included in the calculation of all-in cost.

The increase in AISC per ounce in the Quarter compared to the comparative quarter is illustrated in the graph below:

All-in cost

All-in cost includes investment in capital expansion projects at Blanket and exploration and evaluation expenditure on projects. Capital projects at Blanket are discussed in section 4.4 and exploration and evaluation projects are discussed in section 5 for Bilboes and Motapa.

16

3.2.2 Administrative Expenses

Administrative expenses are detailed in note 8 to the Interim Financial Statements and include the costs of Caledonia’s offices and personnel in Harare, Johannesburg, Bulawayo, the UK and Jersey, which provide the following functions: feasibility study, technical services, finance, procurement, investor relations, corporate development, legal and company secretarial.

Analysis of Administrative expenses
($’000’s) |  | 3 months ended
|  | Mar 31,
|  |  | 2025 |  |  |  | 2024 |
Investor relations |  |  | 173 |  |  |  | 135 |
Professional consulting fees and advisory services |  |  | 396 |  |  |  | 244 |
Listing fees |  |  | 121 |  |  |  | 149 |
Directors’ fees (Caledonia and Blanket) |  |  | 210 |  |  |  | 189 |
Employee costs |  |  | 1,686 |  |  |  | 1,355 |
Employee costs – settlements group |  |  | 786 |  |  |  | - |
Employee costs – bonuses group |  |  | 458 |  |  |  | (150 | )
Other |  |  | 768 |  |  |  | 689 |
Total |  |  | 4,598 |  |  |  | 2,611 |

Administrative expenses in the Quarter were 76.1% higher than the comparative quarter, primarily driven by an increase in employee headcount and a settlement payment to the previous Chief Financial Officer. Additionally, costs that were reclassified as administrative costs in the second quarter of 2024 contributed to the rise. The inclusion of a bonus provision for 2025 further amplified employee costs, contrasting with the comparable quarter, which included a reversal of the bonus accrual for 2023 and no additional accruals for 2024. Investments aimed at enhancing the capacity and broadening the role of the HR function also played a key role in the increase.

3.2.3 Depreciation, foreign exchange (losses) gains and other expenses

The depreciation charge in the Quarter marginally increased to the comparable quarter, because of the higher production ounces in the Quarter over which a large part of the cost base is depreciated partly offset by no depreciation on assets that were fully impaired in the last quarter of 2024.

Net foreign exchange movements in the Quarter relate to profits and losses arising on monetary assets and liabilities that are held in currencies other than the USD - principally the ZiG and, to a lesser extent, the South African Rand and the British Pound. The total net foreign exchange loss in the Quarter amounted to $1.3 million, and the net losses were predominantly due to the marginal devaluation of the ZiG rate against the USD, which contributed $1.0 million to the overall exchange losses for the period. Foreign exchange losses on the ZiG were predominantly incurred on the ZiG-denominated prepayments, receivables for gold sales and VAT refunds which reduced in value in US Dollar terms between the date they were recognised. Exchange losses of $0.1 million were also realised on ZiG to USD conversions on the Willing Buyer Willing Seller (WBWS) platform where conversions of $1.4 million were made in the Quarter. Unrealised foreign exchange losses on South African Rand-denominated intercompany loans of approximately $0.3 million were incurred due to the weakening of the South African Rand in the Quarter. The foreign exchange losses on intercompany loans are not expected to have a cash flow effect in the short term.

CSR cost amounted to $0.3 million in the Quarter. CSR is further discussed in section 4.2.

Other expenses include Intermediate Monetary Transaction Tax of $0.5 million for the Quarter that is chargeable on the transfer of physical money, electronically or by any other means and is charged at 2% per transaction performed in Zimbabwe.

17

The net derivative financial instrument expense relates to the put options purchased in February 2025 at a strike price of $2,600 per ounce.

3.2.4 Tax expense

Analysis of consolidated tax expense for the Quarter
($’000’s) |  |  | Blanket |  |  |  | South Africa |  |  |  | UK |  |  |  | Bilboes and CHZ |  |  |  | Total |
Income tax |  |  | 6,534 |  |  |  | (93 | ) |  |  | – |  |  |  | – |  |  |  | 6,441 |
Withholding tax |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  |  |
Management fee |  |  | – |  |  |  | 33 |  |  |  | – |  |  |  | – |  |  |  | 33 |
Deemed dividend |  |  | 72 |  |  |  | – |  |  |  | – |  |  |  | (9 | ) |  |  | 63 |
CHZ dividends to GMS-UK |  |  | – |  |  |  | – |  |  |  | 160 |  |  |  | – |  |  |  | 160 |
Deferred tax |  |  | (99 | ) |  |  | 38 |  |  |  | – |  |  |  | – |  |  |  | (61 | )
|  |  | 6,507 |  |  |  | (22 | ) |  |  | 160 |  |  |  | (9 | ) |  |  | 6,636 |

The overall effective taxation rate for the Quarter was 37.3% (Q1 2024: 55.0%). The effective tax rate bears little relationship to reported consolidated profit before tax.

The effective consolidated tax rate is higher than the enacted rate of Zimbabwean income tax due to the following reasons:

| · | The rate of income tax in Jersey, the tax domicile of the parent company of the Group (i.e. the Company), is zero, which means there is no tax benefit to be realised by offsetting expenses incurred in Jersey against profit. Such expenses include administrative expenses and expenses incurred in respect of derivatives, and share-based payments;

| · | Management fees charged to Blanket by the shared services centres in Bulawayo and in South Africa are not fully deductible for income tax purposes and incur withholding tax;

| · | The Johannesburg office from time-to-time makes an intercompany profit, which results in a South African income tax expense. On consolidation, inter-company profits are eliminated, but the tax expense remains.

The effective taxation rate for Blanket was 28.3% (2024: 30.0%), which closely corresponds to the enacted Zimbabwean income tax rate applicable in the Quarter of 25.75%.

From January 1, 2023 the Zimbabwean taxable income was calculated and paid in the proportion in which income was received.

From July 1, 2024, where a taxpayer's income is earned more than 50% in USD, the taxable income is calculated and paid on a USD50:ZiG50 basis.

Deferred tax predominantly comprises the difference between the accounting and tax treatments of capital investment expenditure. Most of the tax expense comprised income tax and deferred tax incurred in Zimbabwe.

South African income tax arises on intercompany profits arising at Caledonia Mining South Africa Proprietary Limited (“CMSA”) on goods sold and intergroup services rendered. CMSA made a loss for the Quarter, accordingly the South African income tax is a credit.

Zimbabwe withholding tax arose on the management fees paid to CMSA and on dividends paid from Caledonia Holdings Zimbabwe (Private) Limited (“CHZ”) to the Company’s subsidiary in the UK Greenstone Management Services Holdings Limited (“GMS-UK”).

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3.2.5 Basic EPS

Basic IFRS EPS for the Quarter improved by 510.9% from a profit of 7.3 cents in the comparative quarter to a profit of 44.6 cents in the Quarter. Adjusted EPS for the Quarter excludes inter alia the effect of intercompany foreign net exchange movements and deferred tax. Adjusted EPS increased from a profit of 9.7 cents in the comparative quarter to 58.5 cents for the Quarter. A reconciliation from Basic IFRS EPS to adjusted EPS is set out in section 9.

3.3 Cash flow analysis

The table below sets out the summarised cash flows for the quarters ended March 31, 2025 and 2024 prepared under IFRS.

Summarised Consolidated Statements of Cash Flows (Unaudited)
($’000’s) |  | 3 months ended
|  | Mar 31,
|  |  | 2025 |  |  |  | 2024 |
Net cash inflow from operating activities |  |  | 13,341 |  |  |  | 4,887 |
Net cash used in investing activities |  |  | (10,071 | ) |  |  | (4,411 | )
Net cash from / (used in) financing activities |  |  | 819 |  |  |  | (2,757 | )
Net increase / (decrease) in cash and cash equivalents |  |  | 4,089 |  |  |  | (2,281 | )
Effect of exchange rate fluctuations on cash and cash equivalents |  |  | 7 |  |  |  | (847 | )
Net cash and cash equivalents at the beginning of the period |  |  | (8,668 | ) |  |  | (11,032 | )
Net cash and cash equivalents at the end of the period |  |  | (4,572 | ) |  |  | (14,160 | )

3.3.1 Operating Activities

Cash flows from operating activities in the Quarter are detailed in note 24 to the Interim Financial Statements. Cash inflows from operations before working capital changes in the Quarter were $24.8 million, compared to $10.5 million in the comparable quarter.

($’000’s) |  | 3 months ended |
|  |  | Mar 31 |
|  |  | 2025 |  |  |  | 2024 |
Cash generated from operations before working capital changes |  |  | 24,843 |  |  |  | 10,508 |

Cash flows from operations before working capital changes were 136.4% higher for the Quarter predominantly due to higher gold prices received on gold sales and increased sales ounces.

The working capital movements in the Quarter resulted in a $6.4 million outflow. Inventory levels were higher due to the 15,000 tonne stockpile that was accumulated at March 31, 2025. The stockpile reflects the significant improvement in mine performance in the Quarter, which now exceeds milling capacity, as discussed in section 4.3. Increased inventory spares were required to sustainably operate Blanket’s rock breakers, crushers, pneumatic air compressors, generators and trackless mining machinery. A VAT receipt of $4.9 million was delayed by the Zimbabwean revenue authority ("ZIMRA") and applied against our revenue royalty tax payments. This resulted in a dual deduction of revenue royalties by ZIMRA and Fidelity Gold Refinery (Private) Limited ("FGR") on behalf of ZIMRA in the Quarter. Subsequently, permission was received to apply the VAT receivable against our other taxes payable in the Quarter, and $2.3m was offset against income tax and withholding tax. A balance of $2.6 million will be utilised against taxes payable in the second quarter of 2025.

19

Prepayments increased during the Quarter, as ZiG prepayments were made to suppliers to reduce cash held in ZiG and thereby mitigate the effects of devaluations in the ZiG. This strategy resulted in an additional $2.7 million in prepayments made by March 31, 2025 to lock in prices of goods denominated in ZiG.

3.3.2 Investing activities

The acquisition of property, plant and equipment relates to the investment at Blanket as discussed further in section 4.4; the investment in exploration and evaluation assets relates to the exploration work at Motapa and Maligreen.

3.3.3 Financing activities

Financing activities for the Quarter include dividends of $1.4 million paid to Blanket’s minority shareholders. During the Quarter, additional loan notes to the value of $2.5 million were issued. The net amount of loan notes received, excluding transaction costs, was $2.4 million. As previously advised, Caledonia has re-phased the declaration and payment of dividends to co-incide with the scheduled board meetings to approve the publication of Caledonia's quarterly results. Accordingly, whereas Caledonia paid a dividend of 14 cents per share in the first quarter of 2024, in 2025, Caledonia declared a dividend of 14 cents per share on March 24, 2025 which was paid on April 17, 2025.

3.3.4 The effect of exchange rate fluctuations

The effect of exchange rate fluctuations on cash held reflects gains or losses on cash balances held in currencies other than the US Dollar. The effect on cash balances forms part of an overall foreign exchange gain or loss arising on all affected monetary assets and liabilities.

20

3.3.5 Overdraft facilities and term loans

Operating and investing activities at Blanket in the Quarter were funded by Blanket's operating cash flows and from Blanket’s overdraft facilities which were as set out below at March 31, 2025.

Overdraft facilities
Lender |  | Date drawn |  | Principal value |  | Balance drawn at March 31, 2025 |  | Repayment terms |  | Security |  | Expiry
Stanbic Bank Limited |  | Mar-24 |  | ZiG7 million |  | Nil |  | On demand |  | Unsecured |  | Jun-25
Stanbic Bank Limited |  | Mar-24 |  | $4 million |  | $2.5 million |  | On demand |  | Unsecured |  | Jun-25
CABS Bank |  | Oct-24 |  | $1 million |  | $0.7 million |  | On demand |  | Unsecured |  | Oct-25
Ecobank |  | Mar-24 |  | $6 million |  | $5.9 million |  | On demand |  | Unsecured |  | Feb-26
Nedbank |  | Apr-24 |  | $7 million |  | $4.2 million |  | On demand |  | Unsecured |  | Apr-26
Term Loans
Lender |  | Date drawn |  | Principal value |  | Balance drawn at March 31, 2025 |  | Repayment terms |  | Security |  | Expiry
CABS Bank |  | Oct-24 |  | $3 million |  | $2.7 million |  | Quarterly |  | Unsecured |  | Mar-27
Letter of credit |  |  |  |  |  |  |  |  |  |  |  |
Lender |  | Date drawn |  | Principal value |  | Balance drawn at March 31, 2025 |  | Repayment terms |  | Security |  | Expiry
Stanbic Bank Limited |  |  |  | $3 million |  | Nil |  |  |  |  |  | Jun-25

Potential asset-based financing of $1.6 million for vehicles being finalised with Nedbank.

3.3.6 Hedging

From December 2022 the Company had the following put options to hedge gold price risk:

Purchase date |  |  | Ounces hedged |  |  |  | Strike price |  |  | Period of hedge
December 22, 2022 |  |  | 16,672 |  |  |  | 1,750 |  |  | December 2022 - May 2023
May 22, 2023 |  |  | 28,000 |  |  |  | 1,900 |  |  | June - December 2023
December 19, 2023 |  |  | 12,000 |  |  |  | 1,950 |  |  | January - March 2024
March 7, 2024 |  |  | 12,000 |  |  |  | 2,050 |  |  | April - June 2024
April 10, 2024 |  |  | 12,000 |  |  |  | 2,100 |  |  | July - September 2024
October 4, 2024 |  |  | 12,000 |  |  |  | 2,600 |  |  | October - December 2024
February 3, 2025 |  |  | 43,439 |  |  |  | 2,600 |  |  | February - December 2025

The put options were entered into to protect the Company against gold prices lower than the strike price over the period hedged. The options are “out-of-the-money" put options which lock in a minimum price over the number of ounces that are subject to the hedge for an initial option price. Caledonia has historically engaged in hedging to lock in a gold price so that Caledonia could continue its planned investment activities and maintain the dividend. Following receipt of the proceeds of the sale of the solar plant in April 2025, Caledonia's net cash position has improved. Accordingly, Caledonia does not intend to engage in further hedging for the foreseeable future.

21

3.3.7 Bonds (loan notes)

In December 2022, a proposal for CMS (the company owning the solar power plant) to issue bonds up to a value of $12 million in the form of loan notes was approved. The decision was taken to optimise the capital structure of the Group and provide additional debt instruments to the Zimbabwean financial market. The bonds have a fixed interest rate of 9.5% payable bi-annually and have a tenor of 3 years from the date of issue. The bond repayments are guaranteed by the Company, and up to the date of this MD&A, $11.5 million of bonds have been issued to Zimbabwean commercial entities. In anticipation of the sale of CMS (which owns the solar plant), the bonds were transferred to CHZ, a wholly owned subsidiary of Caledonia, so that Caledonia could maintain and develop its relationships with Zimbabwe’s institutional debt investors.

3.4 Analysis of financial position

The table below sets out the consolidated statements of Caledonia’s financial position at the end of the Quarter, December 31, 2024 and December 31, 2023 prepared under IFRS.

Summarised Consolidated Statements of Financial Position ($’000’s) (Unaudited)
As at |  |  | Mar 31 |  |  |  | Dec 31 |  |  |  | Dec 31 |
|  |  | 2025 |  |  |  | 2024 |  |  |  | 2023 |
|  |  |  |  |  |  |  |  |  |  | *Restated |
Total non-current assets |  |  | 290,914 |  |  |  | 287,046 |  |  |  | 274,074 |
Income tax receivable |  |  | 216 |  |  |  | 355 |  |  |  | 1,120 |
Inventories |  |  | 25,317 |  |  |  | 23,768 |  |  |  | 20,304 |
Derivative financial assets |  |  | – |  |  |  | – |  |  |  | 88 |
Trade and other receivables |  |  | 17,268 |  |  |  | 12,675 |  |  |  | 9,952 |
Prepayments |  |  | 7,776 |  |  |  | 6,748 |  |  |  | 2,538 |
Cash and cash equivalents |  |  | 8,728 |  |  |  | 4,260 |  |  |  | 6,708 |
Assets held for sale |  |  | 13,520 |  |  |  | 13,512 |  |  |  | 13,519 |
Total assets |  |  | 363,739 |  |  |  | 348,364 |  |  |  | 328,303 |
Total non-current liabilities |  |  | 71,405 |  |  |  | 68,505 |  |  |  | 63,970 |
Cash-settled share-based payment |  |  | 674 |  |  |  | 634 |  |  |  | 920 |
Income tax payable |  |  | 4,363 |  |  |  | 2,958 |  |  |  | 10 |
Lease liabilities |  |  | 140 |  |  |  | 95 |  |  |  | 167 |
Loans and borrowings |  |  | 1,455 |  |  |  | 1,174 |  |  |  | – |
Loan notes |  |  | 1,093 |  |  |  | 855 |  |  |  | 665 |
Trade and other payables |  |  | 28,222 |  |  |  | 26,647 |  |  |  | 20,503 |
Overdrafts |  |  | 13,300 |  |  |  | 12,928 |  |  |  | 17,740 |
Liabilities associated with assets held for sale |  |  | 118 |  |  |  | 104 |  |  |  | 128 |
Total liabilities |  |  | 120,770 |  |  |  | 113,900 |  |  |  | 104,103 |
Total equity |  |  | 242,969 |  |  |  | 234,464 |  |  |  | 224,200 |
Total equity and liabilities |  |  | 363,739 |  |  |  | 348,364 |  |  |  | 328,303 |

Property, plant and equipment additions at Blanket amounted to $5.6 million in the Quarter (rehabilitation change in estimate excluded and inclusive of intercompany mark-up). The additions during the Quarter predominantly related to:

• | New tailings storage facility ("TSF") (second phase) - $0.8 million;
• | Capital development at 30 and 34 levels - $1.8 million;
• | Information technology infrastructure - $0.1 million;
• | Deep drilling and exploration - $0.3 million;
• | Electrical engineering - $0.6 million; and
• | Mill and surface engineering - $1.5 million.

22

The total capital expenditure for 2025 at Blanket is planned at $34.1 million and full year spend is expected to be within the guidance levels.

Inventory, trade receivables, prepayments and trade payables are discussed under section 3.3.

Overdrafts are used for short-term working capital funding requirements in Zimbabwe. Expiration dates and terms of the overdrafts and short-term loans are set out in section 3.3.5.

For details on the solar plant that was held for sale at the end of the Quarter, refer to section 4.8.

The table below illustrates the distribution of the consolidated cash across the jurisdictions where the Group holds its cash:

As at |  |  | Jun 30, |  |  |  | Sep 30, |  |  |  | Dec 31, |  |  |  | Mar 31, |
|  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2025 |
Zimbabwe |  |  | (3,393 | ) |  |  | (11,375 | ) |  |  | (10,251 | ) |  |  | (7,109 | )
South Africa |  |  | 750 |  |  |  | 1,754 |  |  |  | 1,539 |  |  |  | 961 |
UK/Jersey |  |  | 1,277 |  |  |  | 1,986 |  |  |  | 44 |  |  |  | 1,518 |
Dubai |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 58 |
Total net cash and cash equivalents |  |  | (1,366 | ) |  |  | (7,635 | ) |  |  | (8,668 | ) |  |  | (4,572 | )

3.5 Supplementary financial information

The following information is provided for each of the eight most recent quarterly periods ending on the dates specified. The amounts are extracted from underlying financial statements that have been prepared using accounting policies consistent with IFRS.

|  |  | Jun 30, |  |  |  | Sep 30, |  |  |  | Dec 31, |  |  |  | Mar 31, |  |  |  | Jun 30, |  |  |  | Sep 30, |  |  |  | Dec 31, |  |  |  | Mar 31, |
($’000’s except per |  |  | 2023 |  |  |  | 2023 |  |  |  | 2023 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2025 |
share amounts) |  |  | *Restated |  |  |  | *Restated |  |  |  | *Restated |  |  |  | *Restated |  |  |  | *Restated |  |  |  | *Restated |  |  |  |  |  |  |  |  |
Revenue |  |  | 37,027 |  |  |  | 41,187 |  |  |  | 38,661 |  |  |  | 38,528 |  |  |  | 50,107 |  |  |  | 46,868 |  |  |  | 47,515 |  |  |  | 56,178 |
(Loss)/profit attributable to owners of the Company |  |  | (2,927 | ) |  |  | 3,823 |  |  |  | (3,402 | ) |  |  | 1,486 |  |  |  | 8,283 |  |  |  | 2,264 |  |  |  | 5,865 |  |  |  | 8,915 |
EPS – basic (cents) |  |  | (13.5 | ) |  |  | 20.7 |  |  |  | (18.7 | ) |  |  | 7.3 |  |  |  | 42.2 |  |  |  | 12.0 |  |  |  | 29.7 |  |  |  | 44.6 |
EPS – diluted (cents) |  |  | (13.5 | ) |  |  | 20.7 |  |  |  | (18.7 | ) |  |  | 7.3 |  |  |  | 42.2 |  |  |  | 12.0 |  |  |  | 29.7 |  |  |  | 44.6 |
Net cash and cash equivalents |  |  | (2,097 | ) |  |  | (3,192 | ) |  |  | (11,032 | ) |  |  | (14,160 | ) |  |  | (1,366 | ) |  |  | (7,635 | ) |  |  | (8,668 | ) |  |  | (4,572 | )

* Refer to section 11 and section 12.

23

4. OPERATIONS

4.1. Safety, Health and Environment (“SHE”)

4.1.1. Blanket

Blanket Safety Statistics |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Leading Indicators | Q2 |  |  |  | Q3 |  |  |  | Q4 |  |  |  | Q1 |  |  |  | Q2 |  |  |  | Q3 |  |  |  | Q4 |  |  |  | Q1 |
|  |  | 2023 |  |  |  | 2023 |  |  |  | 2023 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2025 |
Accident-Free Days |  |  | 78 |  |  |  | 85 |  |  |  | 89 |  |  |  | 82 |  |  |  | 81 |  |  |  | 85 |  |  |  | 88 |  |  |  | 83 |
Near Misses |  |  | 3 |  |  |  | 3 |  |  |  | 7 |  |  |  | 12 |  |  |  | 2 |  |  |  | 4 |  |  |  | 9 |  |  |  | 21 |
Total Injury Frequency Rate |  |  | 1.4 |  |  |  | 0.8 |  |  |  | 0.4 |  |  |  | 0.9 |  |  |  | 1.3 |  |  |  | 0.9 |  |  |  | 0.4 |  |  |  | 0.6 |
Audits |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 86 |  |  |  | 79 |  |  |  | 587 |  |  |  | 529 |  |  |  | 42 |
Inspections |  |  | 132 |  |  |  | 46 |  |  |  | 73 |  |  |  | 129 |  |  |  | 158 |  |  |  | 552 |  |  |  | 734 |  |  |  | 854 |
No. of Employees Inducted |  |  | 656 |  |  |  | 688 |  |  |  | 607 |  |  |  | 614 |  |  |  | 985 |  |  |  | 1,008 |  |  |  | 827 |  |  |  | 978 |
Safety Meetings |  |  | 71 |  |  |  | 67 |  |  |  | 74 |  |  |  | 53 |  |  |  | 82 |  |  |  | 128 |  |  |  | 123 |  |  |  | 123 |
No. of Employees Trained |  |  | 345 |  |  |  | 477 |  |  |  | 672 |  |  |  | 1,245 |  |  |  | 1,615 |  |  |  | 1,682 |  |  |  | 1,793 |  |  |  | 4,933 |
Planned Job Observations |  |  | 1,036 |  |  |  | 1,030 |  |  |  | 1,097 |  |  |  | 739 |  |  |  | 1,155 |  |  |  | 2,762 |  |  |  | 2,440 |  |  |  | 1,963 |
Workplace Conditions |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5,195 |  |  |  | 4,890 |  |  |  | 5,805 |

Blanket Safety Statistics |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Lagging Indicators | Q2 |  |  |  | Q3 |  |  |  | Q4 |  |  |  | Q1 |  |  |  | Q2 |  |  |  | Q3 |  |  |  | Q4 |  |  |  | Q1 |
|  |  | 2023 |  |  |  | 2023 |  |  |  | 2023 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2025 |
Loss of Life |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | - |
Lost Time Injuries |  |  | 6 |  |  |  | 1 |  |  |  | 2 |  |  |  | 1 |  |  |  | - |  |  |  | 1 |  |  |  | 2 |  |  |  | 4 |
Restricted Work Activity Cases |  |  | 8 |  |  |  | 3 |  |  |  | 1 |  |  |  | 5 |  |  |  | 9 |  |  |  | 2 |  |  |  | 1 |  |  |  | 2 |
Medical Aid Case Injuries |  |  | 1 |  |  |  | 1 |  |  |  | 1 |  |  |  | 1 |  |  |  | 3 |  |  |  | 3 |  |  |  | 1 |  |  |  | 2 |
First Aid |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | - |
Total Injuries |  |  | 15 |  |  |  | 5 |  |  |  | 4 |  |  |  | 8 |  |  |  | 12 |  |  |  | 8 |  |  |  | 4 |  |  |  | 8 |
Shifts Lost |  |  | 104 |  |  |  | 130 |  |  |  | 182 |  |  |  | 32 |  |  |  | - |  |  |  | 6,018 |  |  |  | 110 |  |  |  | 337 |

Under the direction of the Chief Operating Officer, who was appointed in May 2024, management initiated a comprehensive review of safety procedures and safety training following which several measures have been or are being implemented.

| • | A Group SHE Manager has been recruited who introduced a proactive approach to safety which focuses on leading safety indicators such as the number of planned job observations and workplace condition inspections and an increase in the number of employees who have been trained to reinforce hazard awareness and compliance with safety protocols.

| • | Accident investigation procedures have been reviewed to improve the Root Cause Analysis and a digital tracking system is now being introduced to enhance the monitoring of follow-up actions.

| • | Real-time camera monitoring of high-risk areas is being introduced.

| • | The “Stop, Look, Assess and Manage” (SLAM) methodology was introduced as a proactive, task-based risk assessment tool to ensure that workers assess hazards before they commence any task.

| • | In January 2025 a 10-point accident mitigation plan was developed and implemented. By the end of the Quarter, implementation of the plan was 90% complete and the rate of new reported incidents decreased.

| • | A Visible Felt Leadership programme has been introduced – with benefits not only in terms of improved safety performance, but also for increased operating effectiveness.

| • | Baseline risk assessments have been completed, and bowtie analyses are being prepared for the top 20 identified risks.

| • | Measures have been put in place to improve the readiness to deal with emergency situations.

24

The Total Injury Frequency Rate (“TIFR”) increased in the Quarter compared to the previous quarter, but it was lower than the average TIFR over a longer period.

4.1.2. Bilboes oxide mine

Bilboes Oxide Mine Safety Statistics
Classification |  |  | Q2 |  |  |  | Q3 |  |  |  | Q4 |  |  |  | Q1 |  |  |  | Q2 |  |  |  | Q3 |  |  |  | Q4 |  |  |  | Q1 |
|  |  | 2023 |  |  |  | 2023 |  |  |  | 2023 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2025 |
Minor Injury |  |  | 2 |  |  |  | - |  |  |  | - |  |  |  | 2 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Lost time injury |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Occupational illness |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total |  |  | 2 |  |  |  | - |  |  |  | - |  |  |  | 2 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Incidents |  |  | 15 |  |  |  | 2 |  |  |  | 4 |  |  |  | 1 |  |  |  | 1 |  |  |  | 5 |  |  |  | 6 |  |  |  | - |
Near misses |  |  | 5 |  |  |  | 2 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 3 |
Total Injury Frequency Rate |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |

The Bilboes oxide mine has been on care and maintenance since the end of the third quarter of 2023.

4.1.3 Environment – Blanket

Water management

Quarterly water consumption (000's m3) |  |  | Q1 |  |  |  | Q2 |  |  |  | Q3 |  |  |  | Q4 |  |  |  | Q1 |
|  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2025 |
Water abstracted |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Surface water (Blanket dam) |  |  | 303 |  |  |  | 357 |  |  |  | 380 |  |  |  | 410 |  |  |  | 316 |
Ground water |  |  | 192 |  |  |  | 208 |  |  |  | 185 |  |  |  | 233 |  |  |  | 247 |
Water abstracted (surface and ground) |  |  | 496 |  |  |  | 566 |  |  |  | 564 |  |  |  | 643 |  |  |  | 564 |
Recycled water |  |  | 143 |  |  |  | 191 |  |  |  | 188 |  |  |  | 199 |  |  |  | 240 |
Water consumption |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Plant water usage |  |  | 279 |  |  |  | 327 |  |  |  | 345 |  |  |  | 317 |  |  |  | 237 |
Underground, gardens, car wash, losses |  |  | 186 |  |  |  | 195 |  |  |  | 171 |  |  |  | 166 |  |  |  | 148 |
Domestic consumption |  |  | 188 |  |  |  | 242 |  |  |  | 228 |  |  |  | 156 |  |  |  | 145 |
Total water use |  |  | 652 |  |  |  | 764 |  |  |  | 744 |  |  |  | 640 |  |  |  | 529 |

Quarter-on-quarter comparisons of water abstracted, and water consumption are not helpful due to the seasonality of rainfall.

During the Quarter, total water abstraction from surface and groundwater sources was 563,535m3, and 194,193m3 of water recycled from the TSF was recycled back to the plant. Recycled water comprised 82% of the plant’s water use in the Quarter (237,397m3). Recycled water has increased significantly during 2024, as water recycling has improved due to the lining of the new TSF, which prevents seepage to groundwater, facilitating the flow of recycled water.

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4.2. Social Investment and Contribution to the Zimbabwean Economy - Blanket

Blanket’s investment in CSR projects which are not directly related to the operation of the mine or the welfare of Blanket’s employees, the payments made to the Gwanda Community Share Ownership Trust (“GCSOT”) in terms of Blanket’s indigenisation, and payments of taxation and other non-taxation charges to the Zimbabwe Government and its agencies are set out in the table below.

Payments to the Community and the Zimbabwe Government
($’000’s)
Period |  | Year |  | CSR Investment |  | Payments to GCSOT |  | Payments to Zimbabwe Government (excl. royalties) |  | Royalties |  | Total
Year |  |  |  | 2013 |  |  |  | 2,147 |  |  |  | 2,000 |  |  |  | 15,354 |  |  |  | 4,412 |  |  |  | 23,913 |
Year |  |  |  | 2014 |  |  |  | 35 |  |  |  | – |  |  |  | 12,319 |  |  |  | 3,522 |  |  |  | 15,876 |
Year |  |  |  | 2015 |  |  |  | 50 |  |  |  | – |  |  |  | 7,376 |  |  |  | 2,455 |  |  |  | 9,881 |
Year |  |  |  | 2016 |  |  |  | 12 |  |  |  | – |  |  |  | 10,637 |  |  |  | 2,923 |  |  |  | 13,572 |
Year |  |  |  | 2017 |  |  |  | 5 |  |  |  | – |  |  |  | 11,988 |  |  |  | 3,498 |  |  |  | 15,491 |
Year |  |  |  | 2018 |  |  |  | 4 |  |  |  | – |  |  |  | 10,140 |  |  |  | 3,426 |  |  |  | 13,570 |
Year |  |  |  | 2019 |  |  |  | 47 |  |  |  | – |  |  |  | 10,357 |  |  |  | 3,854 |  |  |  | 14,258 |
Year |  |  |  | 2020 |  |  |  | 1,689 |  |  |  | 184 |  |  |  | 12,526 |  |  |  | 5,007 |  |  |  | 19,406 |
Year |  |  |  | 2021 |  |  |  | 1,163 |  |  |  | 948 |  |  |  | 16,426 |  |  |  | 6,083 |  |  |  | 24,620 |
Year |  |  |  | 2022 |  |  |  | 888 |  |  |  | 1,200 |  |  |  | 12,060 |  |  |  | 7,124 |  |  |  | 21,272 |
Year |  |  |  | 2023 |  |  |  | 1,491 |  |  |  | 550 |  |  |  | 11,871 |  |  |  | 7,316 |  |  |  | 21,228 |
Year |  |  |  | 2024 |  |  |  | 1,291 |  |  |  | 1,425 |  |  |  | 11,948 |  |  |  | 9,081 |  |  |  | 23,745 |
Q1 |  |  |  | 2025 |  |  |  | 305 |  |  |  | 375 |  |  |  | 9,104 |  |  |  | 2,700 |  |  |  | 12,484 |

CSR initiatives fall under seven pillars of education, health, women empowerment and agriculture, environment, charity, youth empowerment and conservation.

The main CSR programme at Blanket relates to the refurbishment of the clinic (including the provision of solar power), the construction of the waiting mother’s shelter, the secondary schools, and the youth centre at Sitezi, which is located approximately 17km from Blanket. Activities in respect of these projects during the Quarter include:

| • | The renovation of Sitezi Secondary School is now largely complete other than the administration block. Work completed includes the renovation of classrooms (including specialist facilities for science and computer science), provision of classroom furniture and equipment, the installation of solar power and the refurbishment of toilet facilities. The school was connected to the internet through a Starlink setup and coverage is being extended to cover all buildings on the site.

| • | The clinic and waiting mothers’ shelter at Sitezi clinic is now complete and ready for handover. The work completed includes the installation of a solar plant and inverters to maintain cold chains for medical supplies and samples at the clinic and the provision of lighting and energy supply to the facility. Extension of power supply to staff cottages is underway.

| • | Work on upgrading the Sabiwa Stadium to meet the requirements of the Zimbabwe Football Association for Division 1/Premier Soccer League stadia in the country is 98% complete. Work in the Quarter included the completion of four sportsperson’s and two official's changing rooms. The stadium, which had been used exclusively by Sabiwa High School, will cater for footballing activities for the entire local community.

| • | 24 student attachees benefited from work experience, each attachee receiving a living allowance during their attachment.

| • | Blanket launched its first graduate trainee recruitment programme in the Quarter and 30 students were successfully placed out of more than 4,000 applications. 11 of the students are female and 10 are from the local Gwanda and surrounding community. 4 houses were renovated in the Quarter to accommodate some of the graduate trainees. Laptops and accessories were also acquired for the graduate trainees.

| • | Blanket undertook road repairs of a section of the old Gwanda Road, which had been undercut by artisanal miners, posing danger of road collapse. Blanket also performed waste rock filling for Gwakwe, Mtshazo and Sibona roads which had become impassable due to the rains.

| • | A $375,000 dividend was paid to GCSOT in the Quarter. GCSOT has a 10% shareholding in Blanket.

26

Further information on Blanket’s CSR activities is included in the annual ESG reports which are published on Caledonia’s website.

The increase in payments to the Zimbabwe government reflects an increase in corporate taxes, Pay-As-You-Earn taxes, Intermediate Monetary Transaction Tax and customs duties paid in the Quarter.

4.3. Gold Production - Blanket

A table showing quarterly gold production since the second quarter of 2023:

|  |  | Q2 |  |  |  | Q3 |  |  |  | Q4 |  |  |  | Q1 |  |  |  | Q2 |  |  |  | Q3 |  |  |  | Q4 |  |  |  | Q1 |
|  |  | 2023 |  |  |  | 2023 |  |  |  | 2023 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2025 |
Gold Produced (oz) |  |  | 17,436 |  |  |  | 21,772 |  |  |  | 20,172 |  |  |  | 17,050 |  |  |  | 20,773 |  |  |  | 18,992 |  |  |  | 19,841 |  |  |  | 18,671 |

Gold production at Blanket for the Quarter was 9.5% higher than the comparable quarter. Gold production excludes approximately 1,500 ounces of gold contained in the ore stockpile at the end of the Quarter.

4.3.1 Mining Operations – Blanket

The table below shows tonnes broken and hoisted from Blanket in the Quarter and the preceding 7 quarters.

|  |  | Q2 |  |  |  | Q3 |  |  |  | Q4 |  |  |  | Q1 |  |  |  | Q2 |  |  |  | Q3 |  |  |  | Q4 |  |  |  | Q1 |
(Tonnes 000's) |  |  | 2023 |  |  |  | 2023 |  |  |  | 2023 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2025 |
Broken ore |  |  | 201.2 |  |  |  | 222.0 |  |  |  | 226.9 |  |  |  | 191.4 |  |  |  | 203.0 |  |  |  | 228.0 |  |  |  | 229.0 |  |  |  | 218.5 |
Hoisted ore |  |  | 180.6 |  |  |  | 200.1 |  |  |  | 203.8 |  |  |  | 158.1 |  |  |  | 198.3 |  |  |  | 202.3 |  |  |  | 213.5 |  |  |  | 211.3 |

Tonnes broken and hoisted in the Quarter increased compared to the comparative quarter after the introduction of revised management structures in late 2024 which increased the direct supervision of underground mining, tramming and hoisting activities. Tramming activities also improved as result of a reduction in the downtime of tramming equipment and the better synchronization of tramming crews.

The improved rate of mining and hoisting in the Quarter exceeded milling capacity, which meant that at the end of the Quarter approximately 15,000 tonnes of ore were stockpiled on surface (Dec 31, 2024: 8,487 tonnes) representing approximately 6 days of target mill throughput. Management intends to maximise mine production to further build the ore stockpile to create a buffer to absorb unforeseen interruptions to mining activities and to allow milling to continue uninterrupted during scheduled engineering work on winders and shafts.

27

4.3.2 Milling Operations - Blanket

Blanket - Production Statistics
|  |  | Year |  |  |  | Tonnes Milled (t) |  |  |  | Gold Head (Feed) Grade (g/t Au) |  |  |  | Gold Recovery (%) |  |  |  | Gold Produced (oz) |
Year |  |  | 2021 |  |  |  | 665,628 |  |  |  | 3.36 |  |  |  | 93.9 |  |  |  | 67,476 |
Year |  |  | 2022 |  |  |  | 752,033 |  |  |  | 3.56 |  |  |  | 93.8 |  |  |  | 80,775 |
Q1 |  |  | 2023 |  |  |  | 170,721 |  |  |  | 3.11 |  |  |  | 93.8 |  |  |  | 16,036 |
Q2 |  |  | 2023 |  |  |  | 179,087 |  |  |  | 3.22 |  |  |  | 94 |  |  |  | 17,436 |
Q3 |  |  | 2023 |  |  |  | 208,902 |  |  |  | 3.46 |  |  |  | 93.7 |  |  |  | 21,772 |
Q4 |  |  | 2023 |  |  |  | 211,730 |  |  |  | 3.17 |  |  |  | 93.6 |  |  |  | 20,172 |
Year |  |  | 2023 |  |  |  | 770,440 |  |  |  | 3.25 |  |  |  | 93.8 |  |  |  | 75,416 |
Q1 |  |  | 2024 |  |  |  | 175,101 |  |  |  | 3.23 |  |  |  | 93.9 |  |  |  | 17,050 |
Q2 |  |  | 2024 |  |  |  | 208,682 |  |  |  | 3.31 |  |  |  | 93.7 |  |  |  | 20,773 |
Q3 |  |  | 2024 |  |  |  | 205,975 |  |  |  | 3.07 |  |  |  | 93.4 |  |  |  | 18,992 |
Q4 |  |  | 2024 |  |  |  | 207,721 |  |  |  | 3.18 |  |  |  | 93.6 |  |  |  | 19,841 |
Year |  |  | 2024 |  |  |  | 797,479 |  |  |  | 3.20 |  |  |  | 93.6 |  |  |  | 76,656 |
Q1 |  |  | 2025 |  |  |  | 201,755 |  |  |  | 3.09 |  |  |  | 93.6 |  |  |  | 18,671 |
April |  |  | 2025 |  |  |  | 63,381 |  |  |  | 3.42 |  |  |  | 93.7 |  |  |  | 6,530 |

Gold production for the Quarter was 9.5% higher than the comparative quarter due to the higher tonnes milled, the benefit of which was partially offset by lower grade and lower recovery. Gold production in April was 6,530 ounces.

Tonnes milled in the Quarter equated to an average throughput of 99.7 tonnes per hour (tph), compared to the anticipated rate of 97.8 tph. Average milling throughput in April was 99.1 tph.

The grade for the Quarter was lower than target and necessitated the plant to use its sprint capacity to achieve target gold production. Grade was particularly low in January but improved towards the end of the Quarter, the grade achieved in March was 3.3g/t. The improvement in the grade continued in April, with a grade of 3.42g/t achieved.

4.4. Capital Projects - Blanket

The main capital projects are ongoing mine development to provide access to new mining areas and the completion of the new TSF.

On-mine capital development includes the infrastructure which will allow for three new production levels (26, 30 and 34 levels); a fourth level (38 level) is to be added in due course via a twin decline that commenced in February 2024. 5,301 meters of development were achieved in the Quarter against a plan of 5,096 meters.

The TSF is being built on a modular basis to spread the cost over a longer period, and to ensure that the first phase could receive material before the old TSF reached its full capacity. Work on the TSF commenced in March 2023, the first phase of the project was completed at the end of February 2024 and deposition on the new TSF commenced on October 30, 2024. All of Blanket’s tailings have been deposited on the new facility from the beginning of 2025. Work on the TSF was adversely affected in the Quarter due to very heavy rains in the early part of the Quarter and a delay in the receipt of lining materials. The delay is not expected to have any adverse effect on scheduled production.

Refer to section 4.9 for the 2025 capital expenditure.

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4.5. Indigenisation

As set out in previous MD&As, transactions that implemented the indigenisation of Blanket (which expression in this section and in certain other sections throughout this MD&A refers to the Zimbabwe company that owns Blanket) were completed on September 5, 2012 following which Caledonia owned 49% of Blanket.

Following the appointment of President Mnangagwa in 2017, the requirement for gold mining companies to be indigenised was removed by a change in legislation with effect from 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 Fremiro’s 15% shareholding in Blanket for a gross consideration of $16.7 million, which was 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. This transaction was completed on January 20, 2020 following which Caledonia has a 64% shareholding in Blanket and Fremiro held approximately 6.3% of Caledonia’s enlarged issued share capital.

As a 64% shareholder, Caledonia receives 64% of Blanket’s dividends plus the repayment of vendor facilitation loans which were extended by Blanket to certain of the indigenous shareholders. The outstanding balance of the facilitation loans at March 31, 2025 was $10.3 million (December 31, 2024: $10.3 million). The facilitation loans (including interest thereon) are repaid by way of the sacrifice of most of the dividends from Blanket: 80% of the dividends declared by Blanket which are attributable to the beneficiaries of the facilitation loans are used to repay such loans and the remaining 20% unconditionally accrues to the respective indigenous shareholders. GCSOT, which holds 10% of Blanket, repaid all of its facilitation loan in September 2021, accordingly it now receives its entire entitlement to Blanket dividends without further deductions.

The facilitation loans are not shown as receivables in Caledonia’s financial statements in terms of IFRS. These loans are effectively equity instruments as their only means of repayment is via dividend distributions from Blanket. Caledonia continues to consolidate Blanket for accounting purposes. Further information on the accounting effects of indigenisation at Blanket is set out in note 5 to the Interim Financial Statements.

4.6. Bilboes

Sulphides feasibility study

The main objective at Bilboes is to construct a large, multiple open-pit operation to extract and process sulphide mineralisation. A feasibility study in respect of the Bilboes sulphide project was prepared by the previous owners which targeted mine and processing operations to produce an average of 168,000 ounces of gold per annum over a 10-year life of mine. Caledonia does not regard this previous study as a current feasibility study.

In June 2024, Caledonia announced a revised development plan for Bilboes in the form of a Preliminary Economic Analysis (“PEA”).

Caledonia has been progressing work on a new feasibility study for the Bilboes project, initially due for publication in the Quarter. While ongoing work confirms the project has attractive economics, several new developments plus higher indicated capital costs have prompted the Company to defer the finalisation of the feasibility study in order to undertake further work to allow for the evaluation of key, and certain new, factors that we expect could positively impact project economics. These include:

| • | Engage with the authorities to explore the potential sale of concentrate to reduce up-front capital expenditure by removing the immediate need for a BIOX processing circuit;

| • | Potential relocation of the TSF to a more suitable location, including considering a location on Caledonia’s Motapa property, immediately adjacent to Bilboes, which, due to the topography of the area, could reduce initial construction costs;

| • | Incorporate Motapa into the Bilboes feasibility study, following the encouraging results announced in 2024 and in light of further exploration work being done this year;

| • | Re-assess a smaller-scale development approach, taking into account both economic returns and deliverability; and

| • | Explore near-term revenue opportunities across the portfolio.

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Caledonia remains committed to maximising Caledonia’s net present value per share: this means identifying the optimal balance between growth and equity dilution, having regard to an acceptable degree of debt funding. Funding solutions are being progressed in tandem with work on the new feasibility study. It is anticipated that funding will include elements of non-recourse project funding, mezzanine funding and loans against Caledonia’s other assets. Finalisation of funding structures will only be possible after publication of the feasibility study and the timing will be subject to the timing imposed by prospective funders.

4.7. Zimbabwe Commercial Environment

Monetary Conditions

The current situation in Zimbabwe can be summarised as follows:

| • | Blanket produces doré gold that it is obliged to deliver to FGR, a subsidiary of the Mutapa Investment Fund (a sovereign wealth fund of the Zimbabwe state), which refines the gold to a purity of 99.5% on a toll-treatment basis. With effect from April 2023 and until February 6, 2025, 25% of the resultant gold was sold to FGR and the remaining 75% exported by Caledonia to a refiner of its choice outside Zimbabwe for final processing. During the Quarter, gold exports were sold to Al-Etihad Gold Refinery and Stonex Financial Limited. The sale proceeds for the gold sold via the offshore refiners are paid in US Dollars to Blanket’s commercial bankers in Zimbabwe within 48 hours of delivery. Management believes this sales mechanism reduces the risk associated with selling and receiving payment from a single refining source in Zimbabwe. It also creates the opportunity to use more competitive offshore refiners, and it may allow for the Company to raise debt funding secured against offshore gold sales. 25% of Blanket's gold is sold to FGR at a price that reflects the prevailing London Bullion Market Association price and the official ZiG/USD exchange rate on the date of sale. Payment is made by FGR to Blanket in ZiG (from April 5, 2024) within 14 days of the sale. FGR deducts a refining fee of 1.24% from the ZiG sale proceeds; FGR collects half of the 5% royalty which is payable to the Government of Zimbabwe in physical gold which is deducted from the amount exported and the balance is paid in USD and ZiG proportionately to the revenue split between USD and ZiG (as discussed further below).

| • | On February 6, 2025, the RBZ issued a Monetary Policy Statement which, inter alia, included provision that with immediate effect exporters such as Blanket are required to “surrender” 30% of their export proceeds in return for ZiG. This means the arrangement outlined above has changed such that Blanket exports 70% of its gold production and sells the remaining 30% to FGR for ZiG-denominated consideration.

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| • | The interbank RTGS$/USD and ZiG/USD exchange rates at each quarter end and at the latest practicable date prior to the publication of this MD&A are set out below.

Interbank Exchange Rates |  |
|  |  | (RTGS$:US$1) |  |  |  | (ZiG:US$1) |
December 31, 2023 |  |  | 6,104.72 |  |  |  |  |
March 31, 2024 |  |  | 22,055.47 |  |  |  |  |
April 5, 2024 |  |  | 30,674.32 |  |  |  | 13.56 |
June 30, 2024 |  |  |  |  |  |  | 13.70 |
July 31, 2024 |  |  |  |  |  |  | 13.79 |
August 8, 2024 |  |  |  |  |  |  | 13.80 |
September 30,2024 |  |  |  |  |  |  | 24.88 |
December 31, 2024 |  |  |  |  |  |  | 25.80 |
March 31, 2025 |  |  |  |  |  |  | 26.77 |
April, 28 2025 |  |  |  |  |  |  | 26.81 |

The interbank exchange rate was relatively stable during the Quarter.

Devaluation of the ZiG (RTGS$ replaced by the ZiG with effect from April 5, 2024) means that net monetary assets held in ZiG (previously RTGS$) will devalue in USD terms. In the ordinary course of its business, Caledonia has net ZiG-denominated assets comprising ZiG-denominated cash and receivables (primarily for the gold sold to FGR and VAT receivables) and ZiG liabilities (mainly comprising taxes payable). During the Quarter, Blanket incurred net realised foreign exchange losses of $0.7 million due to the devaluation of the ZiG. These losses adversely affected cash generated. To reduce the exposure to such losses, management has engaged in aggressive ZiG-denominated procurement to reduce its ZiG-denominated cash. This activity frequently results in Blanket making prepayments in respect of consumables and supplies denominated in ZiG, which also adversely affects cash generation. During the Quarter, Blanket participated to a greater extent in the “Willing-Buyer-Willing-Seller" foreign exchange market and realised conversions of $1.4m, which has seen an increase in liquidity.

ZiG cash balances at March 31, 2025 amounted to a USD equivalent of $1.6 million and $2.5 million at April 30, 2025.

Electricity supply

Blanket requires approximately 24MW of electricity to maintain all mining and processing operations.

Blanket obtains approximately 20% of its power requirements from a captive solar plant, which was owned by Caledonia’s subsidiary CMS at the end of the Quarter but was sold, through the sale of CMS, after the end of the Quarter. The solar plant was commissioned in March 2023 at a cost of approximately $14.2 million. In general, the solar plant has operated better than anticipated. The solar plant does not provide any power at night and output is severely restricted if there is anything other than unbroken sunshine. Solar output was adversely affected in the Quarter by an increased incidence of cloudy days due to the onset of the rainy season. In addition, during the Quarter, a component failure impaired the production capacity of the solar plant for 8 days, which coincided with a period of very poor performance due to overcast conditions. 6,613Gwh of power was provided by the solar plant in the Quarter.

In the ordinary course of events, the remainder of Blanket’s power is imported into Zimbabwe (mainly from Mozambique) and is “wheeled” through the Zimbabwe grid to Blanket. Due to the very poor condition of the grid - particularly in Blanket’s location – the grid power provided to Blanket is subject to frequent interruptions. In addition, power obtained through the grid is subject to frequent surges and dips in voltage which, if not controlled, cause severe damage to Blanket’s electrical equipment.

In recent years, Blanket has increased its diesel generating capacity to 18MW of installed capacity which was sufficient to maintain all operations and capital projects but only on a stand-by basis. Electricity produced by diesel generators costs approximately 45 cents/kWh compared to 12.8 cents/kWh for grid power.

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During the Quarter Blanket consumed 32.9GWh of power compared to a plan of 31.5GWh. The higher-than-expected consumption was due to higher hoisting and milling and unbudgeted loads which includes mine de-watering following exceptionally heavy rains in the Quarter.

The following initiatives have been implemented by Blanket to alleviate the power challenges:

| • | 2019: installed two 10MVA auto tap transformers on the Zimbabwe Electricity Supply Authority ("ZESA") supply line to protect equipment at No. 4 shaft and the main metallurgical plant from voltage fluctuations on the incoming grid supply (cost: $0.488m).

| • | 2019: two further 10MVA auto tap transformers were installed to protect equipment at Central shaft (cost: $0.488m).

| • | Caledonia’s 12.2MWac solar plant was commissioned in early 2023 at a cost of $14.2 million and provides approximately 20% of Blanket’s average daily electricity demand.

| • | In April 2023 Blanket entered into a power supply agreement with the Intensive Energy Users Group (“IEUG”) and the Zimbabwean power utility to allow the IEUG to obtain power outside of Zimbabwe and strengthen the Zimbabwean power grid. As a result of this arrangement, Blanket has paid a lower tariff for energy supplied by IEUG but, as noted above, it has not improved the power quality received at Blanket.

| • | In November 2024 power factor correction equipment was installed at a cost of $1.5 million. In the long term this equipment is expected to reduce diesel consumption, although, as noted above, due to the other difficulties with power supply in late 2024, diesel consumption was higher than usual to compensate for poor supply from the solar plant and from the grid. The power factor correction equipment has reduced penalty charges incurred by ZESA, and has so far resulted in savings of approximately $75,000 per month.

In addition to the above, the capital budget for 2025 includes provision to re-configure the Central shaft winder so that it uses less power: the capital cost of this exercise is approximately $2.4 million with an anticipated saving of approximately $1.2 million per annum. Investigations are underway to reduce Blanket's overall electricity consumption by using the available shafts and machinery more efficiently. Management is also evaluating other options to improve the overall quality of Blanket’s power supply to enhance operational resilience and reduce costs.

Water supply

Blanket uses water in the metallurgical process. Blanket is situated in a semi-arid region and rainfall typically only occurs in the period November to February. The 2024/2025 rainy season was better than usual; accordingly, management does not expect any shortage of water for the remainder of 2025. Nevertheless, initiatives are under way to reduce water consumption.

Taxation

The main elements of the Zimbabwe tax regime insofar as it affects Blanket and Caledonia are as follows:

| • | A royalty is levied on gold revenues at a rate of 5%.

| • | Income tax is levied at 25.75% (2024: 25.75%) on taxable income as adjusted for tax deductions in the tax year. The main adjustments to taxable income for the purposes of calculating tax are the add-back of depreciation and most of the management fees paid by Blanket to CMSA. There is a deduction of 100% of all capital expenditure incurred in the year of assessment. As noted above, the royalty is deductible for income tax purposes. The calculation of taxable income is performed using financial accounts prepared in USD and split between USD and ZiG (before April 5, 2024, the RTGS$) based on the currency in which the transactions are denominated.

| • | Withholding tax is levied on certain remittances from Zimbabwe i.e. dividend payments from Zimbabwe to the UK and payments of management fees from Blanket to CMSA.

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4.8. Solar plant

As noted in section 4.7, Blanket suffers from unstable grid power and power outages. In 2020, the Company raised $13 million (before commission and expenses) to fund the construction of a 12.2MWac solar plant through the sale of 597,963 shares at an average price of $21.74 per share. The solar plant was fully commissioned in early February 2023 at a construction cost of $14.3 million; the plant provides approximately 20% of Blanket’s total electricity requirement.

In December 2022, the Board approved a proposal for CMS (which owns the solar plant) to issue bonds up to a value of $12.0 million in the form of loan notes (the “bonds”). The decision was taken to optimise the capital structure of the Group and provide additional debt instruments to the Zimbabwean financial market. The bonds have an interest rate of 9.5% payable bi-annually and have a tenor of 3 years from the date of issue. The bond repayments are guaranteed by the Company and up to the date of this MD&A $11.5 million of bonds have been issued to Zimbabwean commercial entities. In anticipation of the sale of the solar plant and in the interest of maintaining an ongoing relationship with Zimbabwean institutional debt providers, the bonds were transferred to CHZ so that CHZ is now the issuer of the bonds.

Due to the unique operating environment in Zimbabwe and Caledonia’s significant in-country expertise, Caledonia opted to build the solar plant using its own resources rather than relying on an external party to build and own the solar plant. As the solar plant is now fully commissioned and is working as planned, Caledonia no longer needs to own the solar plant, provided it retains long term access to the power it produces. After a structured sale process, Caledonia concluded the sale of the solar plant to CBE just after the end of the Quarter for a gross consideration of $22.35 million. The new owners will continue to exclusively supply Blanket with electricity from the plant. This transaction realised a profit on Caledonia's investment in the plant. The proceeds of the sale will be retained by the Company for reinvestment in Caledonia’s core business of gold mining that should yield higher returns to our shareholders.

4.9. Opportunities and Outlook

Production and cost guidance

Blanket production guidance for 2025 is 74,000 to 78,000 ounces of gold. This reflects the current mine scheduling, which anticipates that Blanket will continue to mine lower-grade areas.

Blanket on-mine cost per ounce is forecast at $1,050 - $1,150 (up from $950 to $1,050 per ounce in 2024), while AISC per ounce is expected to be in the range of $1,690 - $1,790 (up from $1,450 to $1,550 per ounce in 2024). Management is confident that Blanket will achieve its on-mine cost per ounce and AISC per ounce guidance for 2025. Cost guidance for 2025 reflects higher labour, HR and IT expenses and increased sustaining capital expenditure. Increased expenditure in these areas is part of the ongoing modernisation of the business, building a foundation for the extended operating life at Blanket, growth arising from Bilboes and Motapa, and future profitability through cost reductions. The 2025 on-mine cost per ounce includes $20 per ounce of ESG cost.

Capital expenditure

The 2025 capital expenditure programme totals $41.0 million, with $34.1 million allocated to Blanket and $5.8 million at Bilboes and Motapa. These investments aim to modernise operations and improve mining efficiency at Blanket. While there will be short-term cost pressures, the long-term goal is to reduce costs, improve profitability, and ensure the continued success of Blanket over its recently increased life of mine. All expenditure will be funded from cash generation and cash reserves with no anticipated impact on the dividend.

Key projects include:

| • | Blanket development: $6.6 million to carry out planned development of 4,663 meters including an additional 590 meters to improve flexibility and access higher grade areas from the previously reported life of mine plan.

| • | Efficiency improvements: $3.4 million for energy-saving initiatives at Blanket.

| • | Operational resilience: $4.8 million to complete the TSF and $0.7 million for IT upgrades as the business continues to modernise its systems and processes.

| • | Exploration and project development: $5.8 million towards exploration at Motapa, building on encouraging results in 2024 and to complete the feasibility study at Bilboes.

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Caledonia Group 2025 Capital Expenditure Forecast
| $'million |  |
Capital development | 6.6 |  | 4,663 meters of planned capital development includes an additional 590 meters to improve flexibility and access higher grade areas.
Milling | 6.8 |  | Includes $4.8m on Phase 2 of the new TSF and $1.6m to improve metallurgical plant controls.
Engineering | 11.0 |  | Includes conversion of Central shaft winder from AC to DC operation at a cost of $2.4m (expected to realise annual power savings of $1.2m from 2026); and $1m to identify an energy solution at Blanket to improve resilience and reduce costs due to the continued deterioration of the grid.
Mineral resource management | 1.8 |  | Exploration drilling at Blanket.
IT infrastructure | 1.1 |  | New software to improve mine planning; installation of a clocking system to enhance labour efficiency.
Safety, health and environment | 2.5 |  | Includes $0.9m to improve underground ventilation.
Mining and other capital equipment | 1.4 |  | Includes acquisition of locomotives and granby cars to improve tramming.
Rollovers from 2024 | *2.9 |  | Capital items from the 2024 budget rolled over to 2025.
Total Blanket | 34.1 |  |
Motapa drilling | 2.8 |  | Following encouraging results from the 2024 exploration campaign, 2025 exploration will focus on the Mpudzi and Motapa North target areas.
Bilboes | 3.0 |  | Further work to complete the feasibility study.
Other | 1.1 |  | Group IT and license renewals.
Total Group | 41.0 |  |

*The roll-overs were revised to $2.9 million from the published $3.7 million in the Company’s announcement on January 14, 2025.

The 2026 and 2027 capital expenditure at Blanket is expected to be $22 million and $27.2 million respectively. The capital expenditure in these years includes expenditure to increase capital development to increase production flexibility that should result in more consistent grades and increase the stock-pile over time. It also includes an on-surface conveyor belt that is expected to reduce ore handling cost and IT and drilling equipment that is planned to improve decision making and availability of information as well as reduced exploration cost in the future. Additional raise bore holes and ventilation are planned to improve safety underground in these years.

Further expenditure at Bilboes and Motapa will depend on the strategic prioritisation of the uses of cash and the outcome of further work in 2025 on the feasibility study and exploration respectively.

Dividend

Caledonia has paid a quarterly dividend since 2012. Dividends were typically declared and paid in January, April, July and October of each year. To streamline the administration relating to board processes, dividends are now expected to be declared at the same time as the publication of quarterly results i.e. in the middle of March, May, August, and November. Payment of the dividends will be subject to the usual regulatory and administrative procedures i.e. approximately four weeks after the dividend has been declared.

This change noted above relates only to the timing of future dividends; this change does not denote any change in the Company's dividend policy.

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The Board will consider the continuation of the dividend as appropriate in line with other investment opportunities and its prudent approach to risk management including with regard to Blanket maintaining a reasonable level of production; receiving payment in full and on-time for all gold sales; being able to make the necessary local and international payments and being able to replenish its supplies of consumables and other items.

Strategy

The immediate strategic focus is to:

| • | maintain production at Blanket at the targeted range of 74,000 to 78,000 ounces of gold for 2025 and at a similar level for 2026, whilst modernising operations and improving mining and operational cost efficiencies;

| • | Engage in further exploration at Blanket with the objectives to upgrade existing inferred mineral resources to measured and indicated mineral resources so that Blanket’s life of mine may be extended and to commence exploration on other target areas on Blanket’s lease area which are outside the current mine footprint;

| • | complete the new feasibility study on the Bilboes sulphide project, continue to evaluate funding solutions, raise funding and commence development of the sulphide project; and

| • | continue with exploration activities at Motapa with a view to identifying sulphide and oxide mineral resources. Any sulphide mineral resources would eventually be treated as part of the Bilboes sulphide project; oxide mineral resources may create short term, relatively short-life revenue opportunities.

5. EXPLORATION

Caledonia’s exploration activities are focused on Blanket and Motapa.

Blanket

Deep exploration drilling continues at Blanket primarily targeting the down dip continuations of the Eroica, Blanket and AR South mineralised zones. In addition to these zones, drilling has been planned to commence on the down-dip continuation of the Lima mineralised zone.

Results of the drilling program continue to be highly encouraging for the continuation of the mineralised zone to 34 level and beyond with intersected grades and widths generally higher than included in the life of mine plan. Further results from the deep drilling at Blanket are anticipated to be published during the second quarter of 2025. The drilling could potentially upgrade confidence in the mineral resource classification from inferred to indicated mineral resources. Deeper drilling serves to increase the delineation of the mineralised zones thereby potentially increasing the inferred mineral resource base.

Blanket has commenced a surface exploration project within the area held under the Blanket mining lease. The program is targeting the Banded Iron Formation (“BIF”) which strikes in a north-westerly direction and has been exploited at the nearby Vumbachikwe and Sabiwa gold mines. The BIF extends from the southern boundary of the Blanket lease area through to the northern boundary and beyond.

Initial work comprised Induced Polarisation (“IP”) and Ground Magnetic (“GM”) surveys over a selected area. These surveys delineated anomalous zones over a 600-metre strike length which subsequent surface reconnaissance mapping and pitting has shown to be quartz filled shear zones hosted within the BIF.

Planned activities for 2025 include:

• Surface trenching at 50 metres spacing over the strike length of 600 metres.

• Reverse Circulation (“RC”) drilling focused on defining the potential of shallow oxide mineral resources.

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Motapa

$2.8 million has been allocated to the 2025 work program at Motapa which targets four main areas/projects:

| • | Motapa North: sulphide resource delineation. The historic oxide open pits at Motapa North (Pluvius 1-5, Boomgate, Jupiter and Shawl) are located approximately 250 meters south of the shared Bilboes/Motapa boundary and a few hundred meters further from the planned metallurgical facility at Bilboes. The 2024 drilling campaign identified grades of up to 6.36g/t1. The focus of further exploration in 2025 is to define a sulphide open pit mineral resource in the near-term along the 2,750-meter strike length with drill section lines planned at a 25-meter spacing.

| • | Motapa Spent Heap Leach. Evaluation to assess whether larger particles (up to 150mm in size) on the old heap leach pad may not have been fully leached; if any remaining gold could be recovered by re-crushing to expose un-leached surfaces; and whether re-leaching is commercially viable.

| • | Mpudzi near-surface oxides. The Mpudzi section, located in the Motapa Central area, has no historical open pits; exploration drilling in 2024 encountered shallow, high-grade oxide mineralisation up to 10.95 g/t1 with deeper drill holes showing the continuation of these zones at depth. Exploration in 2025 will target defining a near-term oxide mineral resource which may be amenable to leaching at the nearby Bilboes leach pad and continue to delineate the deeper sulphide zones.

| • | Motapa South. Limited exploration took place at Motapa South in 2024 as efforts were focused on the north and central areas because of their proximity to Bilboes. However, a potential oxide zone, which has no historical open pits, has recently been delineated through trenching activities and the 2025 exploration campaign includes fast-track infill trenches and shallow drilling on this zone.

Exploration activities at Motapa re-started in the Quarter following a suspension of activity during the wet season during which exploration activity is difficult.

1. Full results of the 2024 drilling campaign are set out in the announcement dated November 11, 2024

6. INVESTING

An analysis of investments is set out below.

($’000’s) |  |  | 2022 |  |  |  | 2023 |  |  |  | 2024 |  |  |  | 2025 |
|  |  | Year |  |  |  | Year |  |  |  | Year |  |  |  | Q1 |
Property, plant and equipment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Blanket |  |  | 34,267 |  |  |  | 28,240 |  |  |  | 27,109 |  |  |  | 6,515 |
Solar |  |  | 12,198 |  |  |  | 163 |  |  |  | — |  |  |  | — |
Other |  |  | 967 |  |  |  | 1,203 |  |  |  | 472 |  |  |  | 15 |
Total investment – property, plant and equipment |  |  | 47,432 |  |  |  | 29,606 |  |  |  | 27,581 |  |  |  | 6,530 |
Exploration and evaluation assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bilboes |  |  | — |  |  |  | 73,375 |  |  |  | 1,327 |  |  |  | 839 |
Connemara North |  |  | 4 |  |  |  | — |  |  |  | — |  |  |  | — |
Maligreen |  |  | 1,430 |  |  |  | 372 |  |  |  | 35 |  |  |  | 30 |
Motapa |  |  | 7,844 |  |  |  | 2,748 |  |  |  | 1,641 |  |  |  | 355 |
Other Satellite properties |  |  | 120 |  |  |  | — |  |  |  | 50.8 |  |  |  | — |
Total investment – exploration and evaluation assets |  |  | 9,398 |  |  |  | 76,693 |  |  |  | 3,054 |  |  |  | 1,224 |

The acquisition of property, plant and equipment relates to the investment at Blanket as discussed further in section 4.4; the investment in exploration and evaluation assets related to the feasibility study work performed at Bilboes of $0.8 million (2024: $1.3 million), exploration work at Motapa of $0.4 million (2024: $1.6 million) and Maligreen of $30,000 (2024: $35,000) during the Quarter.

Investment in property, plant and equipment at Blanket is discussed in section 4.9 of this MD&A; investment in exploration and evaluation assets is as set out in section 5.

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7. LIQUIDITY AND CAPITAL RESOURCES

An analysis of Caledonia’s capital resources is set out below.

Liquidity and Capital Resources |  |  |  |  |  |  |  |  |  |  |  |  |  |
($’000’s) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Dec 31 |  |  |  | Mar 31 |  |  |  | Jun 30 |  |  |  | Sep 30, |  |  |  | Dec 31 |  |  |  | Mar 31 |
As at |  |  | 2023 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2024 |  |  |  | 2025 |
Net cash and cash equivalents |  |  | (11,032 | ) |  |  | (14,160 | ) |  |  | (1,366 | ) |  |  | (7,635 | ) |  |  | (8,668 | ) |  |  | (4,572 | )
Net working capital |  |  | 14,096 |  |  |  | 9,320 |  |  |  | 21,511 |  |  |  | 18,368 |  |  |  | 15,923 |  |  |  | 23,460 |

Movements in Caledonia’s net cash, overdraft and working capital and an analysis of the sources and uses of Caledonia’s cash are discussed in section 3 of this MD&A. The overdraft and term facilities are held by Blanket with Zimbabwean banks with security and repayment periods as detailed in section 3.3.5. The Group’s liquid assets as at March 31, 2025 plus anticipated cash flows exceeded its planned and foreseeable commitments as set out in section 8.

8. OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL COMMITMENTS AND CONTINGENCIES

There are no off-balance sheet arrangements apart from the facilitation loans which are not reflected as loans receivable for IFRS purposes (refer to note 5 of the Interim Financial Statements). The Company had the following contractual obligations at March 31, 2025:

Payments due by period |  |  |  |  |  |  |  |  |  |  |  |
($’000’s) |  |  |  |  |  |  |  |  |  |  |  |
Falling due |  | Within 1 year |  | 1-3 Years |  | 4-5 Years |  | After 5 Years |  |  | Total |
Trade and other payables |  |  | 28,222 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 28,222 |
Provisions |  |  | 24 |  |  |  | 498 |  |  |  | 313 |  |  |  | 9,750 |  |  |  | 10,585 |
Capital expenditure commitments |  |  | 5,051 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 5,051 |
Loans and borrowings |  |  | 1,455 |  |  |  | 1,219 |  |  |  | — |  |  |  | — |  |  |  | 2,674 |
Lease liabilities |  |  | 140 |  |  |  | 194 |  |  |  | – |  |  |  | – |  |  |  | 334 |
Cash-settled share-based payments |  |  | 674 |  |  |  | 628 |  |  |  | – |  |  |  | – |  |  |  | 1,302 |
Loan notes (bonds) |  |  | 1,093 |  |  |  | 10,460 |  |  |  | – |  |  |  | – |  |  |  | 11,553 |

These amounts do not include interest accrued on March 31, 2025.

The capital expenditure commitments relate to materials and equipment which have been ordered by CMSA and which will be sold to Blanket.

Other than the proposed investment in the exploration properties, the committed and uncommitted investment will be used to maintain Blanket’s existing operations and implement the final development relating to the Central shaft and the further stages of the new TSF as discussed in section 4.4 of this MD&A.

Committed and uncommitted purchase obligations are expected to be met from the cash generated from Blanket’s existing operations and Blanket’s existing borrowing facilities. The Group leases property for its administrative offices in Jersey, Harare, Bulawayo and Johannesburg; following the implementation of IFRS 16 the Group recognises the liabilities for these leases. As of March 31, 2025, the Group had liabilities for rehabilitation work on Blanket – if the mine is permanently closed – at an estimated discounted cost of $6.1 million (March 31, 2024: $5.3 million), Motapa’s undiscounted liability amounted to $0.6 million (March 31, 2024: $0.9 million), Maligreen’s undiscounted liability amounted to $0.3 million (March 31, 2024: $0.3 million), and Bilboes’ undiscounted liability amounted to $3.6 million (March 31, 2024: $3.5 million).

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9. ADJUSTED EARNINGS PER SHARE

“Adjusted earnings per share” is a non-IFRS measure which management believes assists investors to understand the Company’s underlying performance. The table below reconciles “adjusted earnings per share” to the profit/loss attributable to owners of the Company shown in the financial statements which have been prepared under IFRS. Adjusted earnings per share is calculated by deducting payments to Blanket Employee Trust Services (Private) Limited (“BETS”) (the company that owns 10% of Blanket’s shares on behalf of an employee trust), foreign exchange gains and losses, impairments, deferred tax and inventory write-downs from the profit attributable to the owners of the Company.

Reconciliation of Adjusted earnings (loss) per share (“Adjusted EPS”) to IFRS Profit attributable to owners of the Company
($’000’s, unless otherwise indicated)
|  | 3 months ended Mar 31
|  |  | 2025 |  |  |  | 2024 *Restated |
Profit for the period (IFRS) |  |  | 11,163 |  |  |  | 2,074 |
Non-controlling interest share of loss for the period |  |  | (2,248 | ) |  |  | (587 | )
Profit (loss) attributable to owners of the Company |  |  | 8,915 |  |  |  | 1,487 |
BETS adjustment |  |  | (341 | ) |  |  | (89 | )
Earnings (IFRS) |  |  | 8,574 |  |  |  | 1,398 |
Weighted average shares in issue (thousands) |  |  | 19,215 |  |  |  | 19,194 |
IFRS EPS (cents) |  |  | 44.6 |  |  |  | 7.3 |
Add back (deduct) amounts in respect of foreign exchange movements |  |  |  |  |  |  |  |
Realised net foreign exchange losses |  |  | 5 |  |  |  | (109 | )
Unrealised net foreign exchange gains |  |  | 252 |  |  |  | 254 |
Adjusted IFRS profit excl. foreign exchange |  |  | 8,831 |  |  |  | 1,543 |
Weighted average shares in issue (thousands) |  |  | 19,215 |  |  |  | 19,194 |
Adjusted IFRS EPS excl. foreign exchange (cents) |  |  | 46.0 |  |  |  | 8.0 |
Add back (deduct) amounts in respect of: |  |  |  |  |  |  |  |
Reversal of BETS adjustment |  |  | 341 |  |  |  | 89 |
Payout costs |  |  | 761 |  |  |  | – |
Tax on Payout costs |  |  | (204 | ) |  |  | – |
Deferred tax |  |  | (62 | ) |  |  | (80 | )
Non-controlling interest portion of deferred tax and impairment |  |  | (27 | ) |  |  | (1 | )
Fair value losses on derivative financial instruments |  |  | 1,592 |  |  |  | 302 |
Adjusted profit |  |  | 11,232 |  |  |  | 1,853 |
Weighted average shares in issue (thousands) |  |  | 19,215 |  |  |  | 19,194 |
Adjusted EPS (cents)@ |  |  | 58.5 |  |  |  | 9.7 |

@ Restated - exchange losses and gains on the ZiG have been retrospectively included in Adjusted EPS due to the recurring nature of these losses.

* Refer to section 11 and section 12.

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10. RELATED PARTY TRANSACTIONS

Key management personnel are persons responsible for planning, directing and controlling the activities of an entity, and include directors and executive officers of the Company. The amounts paid by the Company for the services provided by key management personnel who are related parties have been determined by negotiation among the parties and are reviewed and approved by the Company’s board. These transactions are in the normal course of operation.

The Company has extended the consultancy agreement with Mr. Curtis, a former director of the Company and Chief Executive Officer, until December 31, 2025 with a monthly fee of $12,500. During the Quarter, the Company expensed $37,500 (2024: $37,500) in advisory service fees to Mr. Curtis.

$7,500 rent was paid to Fulbon Investments (Pvt) Limited in the Quarter, of which Mr. Gapare is a director, which supplied office accommodation to CHZ.

The company has entered into a consultancy agreement with Mr. Goodburn, the former Chief Financial Officer of the Company from April 1, 2025 until September 30, 2025 for a monthly fee of $20,000.

11. RESTATEMENT OF COMPARATIVE INFORMATION

In preparation of the consolidated financial statements for the year ended December 31, 2024, an error was identified in the accounting interpretation related to the calculation of deferred tax liabilities at Blanket. The non-cash restatement does not affect income tax calculations or submissions.

In October 2018, the RTGS$ was introduced in Zimbabwe at 1:1 to the USD. The RTGS$ was deemed the only legal tender in Zimbabwe, and all liabilities held previously were to be denominated in RTGS$. In 2019, Practice Note 26 (as described in note 3.1.5 of the consolidated financial statements) required all income tax returns to be calculated in RTGS$ for transactions occurring prior to introducing the multi-currency regime in 2023.

Blanket’s deferred tax liabilities were incorrectly calculated in RTGS$ and accounted for as a monetary item where RTGS$ deferred tax temporary differences were translated to the USD functional currency. Gains related to the devaluation of the deferred tax liabilities were realised in profit or loss. Transactions from 2019 to 2022 affected the deferred tax liability calculation and continued to be denominated in RTGS$ in accordance with the legislated tax regime after the multi-currency regime was introduced. The accounting for the deferred tax liabilities in RTGS$ with the translation to USD remained consistent in all previous Interim Financial Statements, yet the carrying value of the deferred tax liabilities should have been denominated in USD rather than RTGS$. The error, stemming from January 1, 2019, was corrected from the earliest period presented in the consolidated financial statements, as presented in the table below.

Consolidated statements of profit or loss and other comprehensive income
($'000's) |  | March 31, 2024 | March 31, 2023
|  | As previously reported |  | Adjustment |  | As restated |  | As previously reported |  | Adjustment |  | As restated
Net foreign exchange (loss) profit |  |  | (4,139 | ) |  |  | (743 | ) |  |  | (4,882 | ) |  |  | 1,533 |  |  |  | (1,497 | ) |  |  | 36 |
Tax expense |  |  | (2,530 | ) |  |  | – |  |  |  | (2,530 | ) |  |  | (3,502 | ) |  |  | 1,122 |  |  |  | (2,380 | )
Profit (loss) for the year |  |  | 2,817 |  |  |  | (743 | ) |  |  | 2,074 |  |  |  | (4,270 | ) |  |  | (375 | ) |  |  | (4,645 | )
Total comprehensive income for the year |  |  | 2,673 |  |  |  | (743 | ) |  |  | 1,930 |  |  |  | (4,639 | ) |  |  | (375 | ) |  |  | (5,014 | )
Non-controlling interests |  |  | 686 |  |  |  | (98 | ) |  |  | 588 |  |  |  | 760 |  |  |  | (49 | ) |  |  | 711 |
Basic (loss) earnings per share ($) |  |  | 0.1 |  |  |  | (0.03 | ) |  |  | 0.07 |  |  |  | (0.3 | ) |  |  | (0.02 | ) |  |  | (0.32 | )
Diluted (loss) earnings per share ($) |  |  | 0.1 |  |  |  | (0.03 | ) |  |  | 0.07 |  |  |  | (0.3 | ) |  |  | (0.02 | ) |  |  | (0.32 | )

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Consolidated statements of financial position ($’000’s) |  | January 1, 2024
|  | As previously reported |  | Adjustment |  | As restated
Retained loss |  |  | (63,172 | ) |  |  | (33,971 | ) |  |  | (97,143 | )
Non-controlling interests |  |  | 24,477 |  |  |  | (6,021 | ) |  |  | 18,456 |
Deferred tax liabilities |  |  | 6,131 |  |  |  | 39,992 |  |  |  | 46,123 |

12. INTERNAL CONTROLS OVER FINANCIAL REPORTING

12.1 Disclosure Controls and Procedures

Management, under the supervision of the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) designed disclosure controls and procedures (“DC&P”) to provide reasonable assurance that:

| · | material information relating to the Company is made known to them by others, particularly during the period in which filings are being prepared; and

| · | information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by the Company under securities legislation is recorded, processed, summarised and reported within the periods specified.

Management has evaluated the effectiveness of the Company’s DC&P as defined in National Instrument 52-109 - Certification of Disclosure in Issuer's Annual and Interim Filings for the period January 1, 2019 to December 31, 2024. As a result of this evaluation, the Company’s CEO and CFO concluded that the Company’s DC&P were not effective during these years. The design and operation of the Company’s DC&P were, therefore, not effective and did not provide reasonable assurance that all material information relating to the Company was reported due to the deferred tax liability error identified as described in section 10.

Identified material weaknesses

A material weakness is a deficiency, or a combination of deficiencies, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

In preparation of the consolidated financial statements for the year to December 31, 2024, management identified the prior period error as described in section 10 and determined that the restatement of financial information presented was necessary. Management has determined that the control over accounting for deferred tax liabilities did not operate effectively and constitutes a material weakness and requires remediation.

Status of the remediation plan

An appropriate IFRS review was not performed on deferred tax related to temporary differences for assets acquired from 2019 to 2022 at Blanket affecting reporting periods from January 1, 2019 to December 31, 2024. Although the calculation was reviewed and the IFRS interpretations were formed after consultation, the IFRS concepts applied were incorrect and not reconsidered in subsequent years up to the completion of the December 31, 2024 year-end. No amendments were made to IAS 12 from 2019 that would have resulted in the interpretation being reconsidered. Going forward, management plans to reconsider critical accounting interpretations every 3 years.

Should these remedial measures be insufficient to address the material weakness described above, or additional deficiencies arise in the future, material misstatements in our interim or annual financial statements may occur in the future.

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12.2 Changes in internal control over financial reporting

Except for the material weakness identified due to the deferred tax liabilities described above, there have been no changes in the Company’s ICFR that have materially affected or are reasonably likely to materially affect the Company’s ICFR during the period January 1, 2019 to March 31, 2025.

12.3 Limitation of DC&P and ICFR

All control systems contain inherent limitations, regardless of how well they are designed. As a result, management acknowledges that its ICFR will not prevent or detect all misstatements due to error or fraud. In addition, management’s evaluation of controls can provide only reasonable, not absolute, assurance that all control issues that may result in material misstatements, if any, have been detected.

13. CRITICAL ACCOUNTING ESTIMATES

Caledonia’s accounting policies are set out in the Interim Financial Statements which have been publicly filed on SEDAR+. In preparing the Interim Financial Statements, management is required to make estimates and assumptions that affect the amounts represented in the Interim Financial Statements and related disclosures. Use of available information and the application of judgement are inherent in the formation of estimates. Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Discussion of recently issued accounting pronouncements is set out in note 4 of the annual consolidated financial statements for the year ended December 31, 2024. Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the Interim Financial Statements is included in the following notes:

13.1. Site restoration provisions

The site restoration provision has been calculated for Blanket, Motapa, Maligreen and Bilboes based on an independent analysis of the rehabilitation costs as performed in 2023. For properties in the development phase the restoration costs are recognised at the current estimated cost of restoration undiscounted. For properties in the production phase 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 estimates, 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.

13.2. Exploration and evaluation (“E&E”) expenditure

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.

The Group also makes assumptions and estimates regarding the technical feasibility and commercial viability of the mineral project and 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 e.g., such as the completion of a feasibility study indicating construction, funding and economic returns that are sufficient. 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.

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13.3. Income taxes

Significant estimates and assumptions 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. Caledonia records its best estimate of the tax liability including any related interest and penalties in the current tax provision. In addition, Caledonia applies judgement in recognising deferred tax assets relating to tax losses carried forward to the extent that there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same taxable entity against which the unused tax losses can be utilised or sufficient estimated taxable income against which the losses can be utilised.

13.4. Impairment

At each reporting date, Caledonia determines if impairment indicators exist and, if present, performs an impairment review of the non-financial assets held in Caledonia. The exercise is subject to various judgmental decisions and estimates. Financial assets are also reviewed regularly for impairment.

13.5. Depreciation

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 plan 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 can demonstrate the economic recovery of resources with a high level of confidence, such additional resources are included in the calculation of depreciation.

13.6. 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 operations.

The Group estimates its mineral reserves (proven and probable) and mineral resources (measured, indicated and inferred) based on information compiled by a qualified person principally in terms of Canadian Securities Administrators’ National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and the United States Securities and Exchange Commission’s Subpart 1300 of Regulation S-K (“Subpart 1300”) 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-hole intersections where multiple reefs are intersected.
• | continuity of mineralisation between drill-hole intersections within recognised reefs; and
• | appropriateness of the planned mining methods.

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The Group estimates and reports reserves and resources principally in accordance with Subpart 1300 and 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 mineral reserves and mineral 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;

| • | 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 may change in ore reserves and resources which may affect expectations about the timing or cost of these activities.

14. FINANCIAL INSTRUMENTS

14.1. Commodity risk

From December 2022 the Company had the following put options to hedge the gold price risk:

Purchase date |  | Ounces hedged |  | Strike price |  | Period of hedge
December 22, 2022 |  | 16,672 oz |  |  | 1,750 |  |  | December 2022 to May 2023
May 22, 2023 |  | 28,000 oz |  |  | 1,900 |  |  | June to December 2023
December 19, 2023 |  | 12,000 oz |  |  | 1,950 |  |  | January to March 2024
March 7, 2024 |  | 12,000 oz |  |  | 2,050 |  |  | April to June 2024
April 10, 2024 |  | 12,000 oz |  |  | 2,100 |  |  | July to September 2024
October 4, 2024 |  | 12,000 oz |  |  | 2,600 |  |  | October to December 2024
February 3, 2025 |  | 43,439 oz |  |  | 2,600 |  |  | February to December 2025

The put options were entered into to protect the Company against gold prices lower than the strike price over the period hedged. The options are “out-of-the-money" put options which lock in a minimum price over the number of ounces that are subject to the hedge for an initial option price. These arrangements carry no further financial obligations, such as margin calls.

14.2. Credit risk

The carrying amount of financial assets as disclosed in the statements of financial position and related notes represents the maximum credit exposure. The trade receivable predominantly relates to gold bullion sold before the end of the Quarter and VAT receivables. The amount due in respect of bullion sales was settled shortly after year end.

14.3. Liquidity risk

All trade payables and the bank overdrafts have maturity dates that are repayable as set out in section 3 and section 7.

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14.4. Currency risk

A proportion of Caledonia’s assets, financial instruments and transactions are denominated in currencies other than the US Dollar. The financial results and financial position of Caledonia are reported in US Dollars in the Interim Financial Statements.

The fluctuation of the US Dollar in relation to other currencies will consequently have an impact upon the profitability of Caledonia and may also affect the value of Caledonia’s assets and liabilities and the amount of shareholders’ equity.

As discussed in section 4.7 of this MD&A, the ZiG is subject to variations in the exchange rate against the US Dollar. This may result in Blanket’s assets, liabilities and transactions that are denominated in ZiG being subject to further fluctuations in the exchange rate between ZiG and US Dollars. In addition, the Company may be subject to fluctuations in the exchange rate between the South African Rand and the US Dollar in respect of cash that is held in Rands in South Africa.

14.5. Interest rate risk

Interest rate risk is the risk borne by an interest-bearing asset or liability due to fluctuations in interest rates. Unless otherwise noted, it is the opinion of management that Caledonia is not exposed to significant interest rate risk as it has limited debt financing. Caledonia’s cash and cash equivalents include highly liquid investments that earn interest at market rates. Caledonia’s policy focuses on preservation of capital and limits the investing of excess funds to liquid term deposits in high credit quality financial institutions.

15. SECURITIES OUTSTANDING

At May 11, 2025, being the last day practicable prior to the publication of this MD&A, Caledonia had 19,294,784 common shares issued and the following outstanding options to purchase common shares (“Options”) granted in equal amounts to each of the employees of a PR consultancy to the Company 3PPB LLC being P Chidley and P Durham:

Name of option holder |  | Number of Options |  | Exercise Price |  | Expiry Date
P Chidley |  |  | 5,000 |  |  | USD 9.49 |  | 30-Sep-29
P Durham |  |  | 5,000 |  |  | USD 9.49 |  | 30-Sep-29
|  |  | 10,000 |  |  |  |  |

The OEICP allows that the number of shares reserved for issuance to participants under the OEICP, together with shares reserved for issue under any other share compensation arrangements of the Company, shall not exceed the number which represents 10% of the issued and outstanding shares from time to time.

16. RISK ANALYSIS

The business of Caledonia is subject to significant risk due to the nature of mining, exploration and development activities. Caledonia’s business is subject to significant additional risks due to the jurisdictions in which it operates. Refer to the Annual Report on Form 20-F for 2024, which was published on the Securities and Exchange Commission's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system by May 15, 2025 and which is also available on SEDAR+, for a comprehensive discussion of the risk factors and how management seeks to mitigate the risks where this is possible.

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17. FORWARD LOOKING STATEMENTS

Information and statements contained in this MD&A that are not historical facts are “forward-looking information” within the meaning of applicable securities legislation that involve risks and uncertainties relating, but not limited to, Caledonia’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 MD&A include: implementation schedules for, and other uncertainties inherent in, the Central shaft project; 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; timing of commencement of operations; plans and timing regarding further exploration, drilling and development; the prospective nature of exploration and development targets; the ability to upgrade and convert mineral resources to mineral reserves; capital and operating costs; our intentions with respect to financial position and third party financing; future dividend payments; and the proposed sale of the solar plant. 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 resources and 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 mineralisation 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, fluctuations in commodity prices, delays in the development of projects and other factors.

Security holders, potential security holders and 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 and mineral resources proving to be inaccurate, fluctuations in gold price and payment terms for gold sold to FGR, 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, fire, 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 (COVID-19)), availability and increasing costs associated with mining inputs and labour, 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 unanticipated 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. Security holders, potential security holders and 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 MD&A; 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.

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18. QUALIFIED PERSON

Mr. Craig Harvey (NHD Economic Geology, MGSSA, MAIG) is the Company’s qualified person as defined by Subpart 1300 and NI 43-101. Mr. Harvey is responsible for the technical information provided in this MD&A except where otherwise stated. Mr. Harvey has reviewed the scientific and technical information included in this document and has approved the disclosure of this information for the purposes of this MD&A.

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