# EDGAR Filing Document

**Accession Number:** 0000766011
**File Stem:** 0001171843-23-001872
**Filing Date:** 2023-3
**Character Count:** 377557
**Document Hash:** 8a8a8077a83e55717ba7d65f83252282
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001171843-23-001872.hdr.sgml**: 20230324

**ACCESSION NUMBER**: 0001171843-23-001872

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 7

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230324

**DATE AS OF CHANGE**: 20230324

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Caledonia Mining Corp Plc
- **CENTRAL INDEX KEY:** 0000766011
- **STANDARD INDUSTRIAL CLASSIFICATION:** GOLD & SILVER ORES [1040]
- **IRS NUMBER:** 000000000
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38164
- **FILM NUMBER:** 23757575

**BUSINESS ADDRESS:**
- **STREET 1:** B006 MILLAIS HOUSE
- **STREET 2:** CASTLE QUAY
- **CITY:** ST HELIER
- **STATE:** Y9
- **ZIP:** JE2 3NF
- **BUSINESS PHONE:** 441534679800

**MAIL ADDRESS:**
- **STREET 1:** B006 MILLAIS HOUSE
- **STREET 2:** CASTLE QUAY
- **CITY:** ST HELIER
- **STATE:** Y9
- **ZIP:** JE2 3NF

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CALEDONIA MINING CORP
- **DATE OF NAME CHANGE:** 19950606

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** GOLDEN NORTH RESOURCE CORP
- **DATE OF NAME CHANGE:** 19920302

**UNITED STATES**<br> **SECURITIES AND EXCHANGE COMMISSION**<br> **Washington, D.C. 20549**

**FORM 6-K**

**Report of Foreign Private Issuer**<br> **Pursuant to Rule 13a-16 or 15d-16**<br> **Of the Securities Exchange Act of 1934**

**For the month of March 2023**<br> **Commission File Number: 001-38164**

**CALEDONIA MINING CORPORATION PLC**<br> (Translation of registrant's name into English)

**B006 Millais House**<br> **Castle Quay**<br> **St Helier**<br> **Jersey JE2 3EF**<br> (Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F [ X ] Form 40-F [ ]

Exhibits 99.1 and 99.2 included with this report on Form 6-K are expressly incorporated by reference into this report and are hereby incorporated by reference as exhibits to the Registration Statement on Form F-3 of Caledonia Mining Corporation Plc (File No. 333-224784), as amended or supplemented.

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
|  | **CALEDONIA MINING CORPORATION PLC**  |
|  | (Registrant) |
| Date: March 24, 2023 | /s/ JOHN MARK LEARMONTH  |
|  | John Mark Learmonth |
|  | CEO and Director |

---

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**EXHIBIT INDEX**

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| [99.1](ex_492456.htm) | [Annual Financial Statements/Report](ex_492456.htm) |
| [99.2](ex_492474.htm) | [Annual MD&A](ex_492474.htm) |

---

## Exhibit 99.1

**Exhibit 99.1**

**Caledonia Mining Corporation Plc**

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL INFORMATION<br>

**To the Shareholders of Caledonia Mining Corporation Plc:**

Management has prepared the information and representations in this report. The consolidated financial statements of Caledonia Mining Corporation Plc and its subsidiaries (the "Group") have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and, where appropriate, these statements include some amounts that are based on best estimates and judgment. Management has determined such amounts on a reasonable basis in order to ensure that the consolidated financial statements are presented fairly, in all material respects.

Our independent auditor has the responsibility of auditing the consolidated financial statements and expressing an opinion on these financial statements.

The accompanying Management Discussion and Analysis ("MD&A") also includes information regarding the impact of current transactions, sources of liquidity, capital resources, operating trends, risks and uncertainties. Actual results in the future may differ materially from our present assessment of this information because future events and circumstances may not occur as expected.

The Group maintains adequate systems of internal accounting and administrative controls, within reasonable cost. Such systems are designed to provide reasonable assurance that relevant and reliable financial information are produced.

Management is responsible for establishing and maintaining adequate internal controls over financial reporting ("ICOFR"). Any system of ICOFR, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

At December 31, 2022 management evaluated the effectiveness of the Group's ICOFR and concluded that such ICOFR was effective based on the criteria set forth in the Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organisations of the Treadway Commission.

The Board of Directors, through its Audit Committee, is responsible for ensuring that management fulfills its responsibilities for financial reporting and internal control. The Audit Committee is composed of three independent non-executive directors. This Committee meets periodically with management, the external auditor and internal auditor to review accounting, auditing, internal control and financial reporting matters.

The consolidated financial statements as at and for the year ended December 31, 2022, 2021 and 2020 have been audited by the Group's independent auditor, BDO South Africa Incorporated. The independent auditor's report outlines the scope of their examination and their opinion on the consolidated financial statements.

The consolidated financial statements for the year ended December 31, 2022 were approved by the Board of Directors and signed on its behalf on March 24, 2023.

(Signed) J.M. Learmonth (Signed) C.O. Goodburn

Chief Executive Officer Chief Financial Officer 

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---

| | | |
|:---|:---|:---|
| ![bdo.jpg](bdo.jpg) | Tel: +27 011 488 1700<br> Fax: +27 010 060 7000<br> www.bdo.co.za | Wanderers Office Park<br> 52 Corlett Drive<br> Illovo, 2196<br>Private Bag X60500<br> Houghton, 2041<br> South Africa |

---

**Independent Auditor**'**s Report**

------

To the Shareholders of Caledonia Mining Corporate Plc

**Opinion**

We have audited the consolidated financial statements of Caledonia Mining Corporation Plc and its subsidiaries (the Group), which comprise the consolidated statements of financial position as at December 31, 2022 and 2021, and the consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the years then ended December 31, 2022, 2021 and 2020, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended December 31, 2022, 2021 and 2020 in accordance with International Financial Reporting Standards (IFRSs), as issued by the International Accounting Standards Board (IASB).

**Basis for Opinion**

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the *Auditor*'*s Responsibilities for the Audit of the Consolidated Financial Statements* section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

**Key Audit Matters**

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

------

---

| | | |
|:---|:---|:---|
| ![bdo.jpg](bdo.jpg) | Tel: +27 011 488 1700<br> Fax: +27 010 060 7000<br> www.bdo.co.za | Wanderers Office Park<br> 52 Corlett Drive<br> Illovo, 2196<br>Private Bag X60500<br> Houghton, 2041<br> South Africa |

---

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| | |
|:---|:---|
| Key audit matter | How the key audit matter was addressed in the audit |
| **Valuation of the recoverable amounts of the cash generating units of the Group (Notes 3(a)(ii) and (iii))** <br> At each reporting date, the Group assesses whether there are any indicators that the carrying amount of its assets and cash generating units ("CGUs") exceeds the relevant recoverable amount.<br>Management have identified the following cash generating units for impairment assessment:<br>● Caledonia Mining Corporation Group<br> ● Blanket Mine CGU<br> ● Bilboes oxides CGU<br>The risk is that the carrying value of the CGUs are inappropriate and may require impairment.<br>Impairment indicators were identified by management at December 31, 2022 and therefore management was required to assess the recoverable amount of the CGUs.<br>The recoverable amount of the CGUs is determined as the higher of the CGU's fair value less costs of disposal or value in use.<br>There is a high level of inherent uncertainty and critical judgements, and estimates applied by management in the assessment of the value in use calculation of the CGU.<br>The estimates of future cash flows are based on financial budgets and the life-of-mine ("LOM") plan including significant judgements and assumptions related to:<br>● ore reserves and mineral resources;<br> ● forecasted gold price;<br> ● discount rate; and<br> ● production volumes and grades<br>There was no impairment required based on the value in use calculation of the CGU.<br>As a result of the estimation uncertainty and judgements applied by management in the discounted cash flow models to calculate the value in use values, the impairment assessment was considered a matter of most significance in our current year audit of the consolidated financial statements. | Our audit procedures included, amongst others:<br>● We evaluated management's assessment of impairment indicators over the CGU's.<br>● We obtained an understanding of the controls in respect of the Group's value in use calculations and the reviews thereof, including confirming that the value in use calculations, have been approved by the Board.<br>● We evaluated Management's value in use calculation against the approved LOM plan and our understanding of the operations, and assessed the key estimates and assumptions used by Management.<br>● We compared the trading performance against budget for FY 2022 in order to evaluate the quality of Management's forecasting and where underperformance against budget was highlighted, we evaluated the impact on the forecasts.<br>● We assessed the key inputs and assumptions used in the value in use calculation for reasonability, taking into account specifically the operating cash flow projections, ore reserves and resources, discount rate, forecasted production volumes and forecasted gold price and comparing these to external sources where appropriate, taking into account our knowledge of the industry.<br>● We made use of our internal valuation expertise to assess the valuation model and related key inputs and assumptions for reasonability, to assess whether the methods applied are consistent with International Financial Reporting Standards and industry norms.<br>● We evaluated Management's sensitivity analysis for the value in use model and performed additional sensitivity analysis on the model where considered necessary.<br>● We evaluated the adequacy of the Group's disclosures in terms of International Financial Reporting Standards as issued by the IASB. |

---

**Other Information** 

Management is responsible for the other information. The other information comprises:

● The Management's Discussion and Analysis report of the consolidated operating results and financial position of the Group for the quarter and year ended December 31, 2022.

● The Annual Report – referred to as Form 20-F.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

------

---

| | | |
|:---|:---|:---|
| ![bdo.jpg](bdo.jpg) | Tel: +27 011 488 1700<br> Fax: +27 010 060 7000<br> www.bdo.co.za | Wanderers Office Park<br> 52 Corlett Drive<br> Illovo, 2196<br>Private Bag X60500<br> Houghton, 2041<br> South Africa |

---

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained the Management's Discussion and Analysis report and Annual Report – referred to as Form 20-F prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor's report. We have nothing to report in this regard.

**Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements** 

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group's financial reporting process.

**Auditor**'**s Responsibilities for the Audit of the Consolidated Financial Statements** 

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

● Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

● Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

● Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

------

---

| | | |
|:---|:---|:---|
| ![bdo.jpg](bdo.jpg) | Tel: +27 011 488 1700<br> Fax: +27 010 060 7000<br> www.bdo.co.za | Wanderers Office Park<br> 52 Corlett Drive<br> Illovo, 2196<br>Private Bag X60500<br> Houghton, 2041<br> South Africa |

---

● Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

● Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Jacques Barradas.

![bdosign.jpg](bdosign.jpg)

*BDO South Africa Incorporated*

Registered Auditors

*Wanderers Office Park* 

*52 Corlett Drive*

*Ilovo*

*2196*

*March 24, 2023*

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**Caledonia Mining Corporation Plc**

**Consolidated statements of profit or loss and other comprehensive income**

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

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **For the years ended December 31** | *Note* | *Note* | **2022** | 2021 | 2020 |
| Revenue | | *8* | **142082** | 121329 | 100002 |
| Royalty |  |  | **(7124)** | (6083) | (5007) |
| Production costs | | *9* | **(62998)** | (53126) | (43711) |
| Depreciation | | *17* | **(10141)** | (8046) | (4628) |
| **Gross profit** |  |  | **61819** | 54074 | 46656 |
| Other income |  |  | **60** | 46 | 4765 |
| Other expenses | | *10* | **(11782)** | (7136) | (5315) |
| Administrative expenses | | *11* | **(11941)** | (9091) | (7997) |
| Cash-settled share-based expense | | *12.1* | **(609)** | (477) | (1413) |
| Equity-settled share-based expense | | *12.2* | **(484)** |  |  |
| Net foreign exchange gain | | *13* | **4411** | 1184 | 4305 |
| Net derivative financial instrument expense | | *14* | **(1198)** | (240) | (266) |
| **Operating profit** |  |  | **40276** | 38360 | 40735 |
| Finance income | | *15* | **17** | 14 | 62 |
| Finance cost | | *15* | **(657)** | (375) | (367) |
| **Profit before tax** |  |  | **39636** | 37999 | 40430 |
| Tax expense | | *16* | **(16770)** | (14857) | (15173) |
| **Profit for the year** |  |  | **22866** | 23142 | 25257 |
| **Other comprehensive loss** |  |  |  |  |  |
| ***Items that are or may be reclassified to profit or loss*** |  |  |  |  |  |
| Exchange differences on translation of foreign operations |  |  | **(462)** | (531) | (173) |
| **Total comprehensive income for the year** |  |  | **22404** | 22611 | 25084 |
| **Profit attributable to:** |  |  |  |  |  |
| Owners of the Company |  |  | **17903** | 18405 | 20780 |
| Non-controlling interests | | *27* | **4963** | 4737 | 4477 |
| **Profit for the year** |  |  | **22866** | 23142 | 25257 |
| **Total comprehensive income attributable to:** |  |  |  |  |  |
| Owners of the Company |  |  | **17441** | 17874 | 20607 |
| Non-controlling interests | | *27* | **4963** | 4737 | 4477 |
| **Total comprehensive income for the year** |  |  | **22404** | 22611 | 25084 |
| **Earnings per share** |  |  |  |  |  |
| Basic earnings per share ($) | | *26* | **1.36** | 1.49 | 1.73 |
| Diluted earnings per share ($) | | *26* | **1.35** | 1.48 | 1.73 |

---

The accompanying notes on pages 11 to 73 are an integral part of these consolidated financial statements.

On behalf of the Board: "J.M. Learmonth"- Chief Executive Officer and "C.O. Goodburn"- Chief Financial Officer.

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**Caledonia Mining Corporation Plc**

**Consolidated statements of financial position**

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

---

| | | | | |
|:---|:---|:---|:---|:---|
| *As at December 31* | *Note* | *Note* | **2022** | 2021 |
| **Assets** |  |  |  |  |
| Property, plant and equipment | | *17* | **178983** | 149102 |
| Exploration and evaluation asset | | *18* | **17579** | 8648 |
| Deferred tax asset | | *16* | **202** | 194 |
| **Total non-current assets** |  |  | **196764** | 157944 |
| Inventories | | *20* | **18334** | 20812 |
| Derivative financial assets | | *14.1* | **440** |  |
| Income tax receivable | | *16* | **40** | 101 |
| Prepayments | | *21* | **3693** | 6930 |
| Trade and other receivables | | *22* | **9185** | 7938 |
| Cash and cash equivalents | | *23* | **6735** | 17152 |
| **Total current assets** |  |  | **38427** | 52933 |
| **Total assets** |  |  | **235191** | 210877 |
| **Equity and liabilities** |  |  |  |  |
| Share capital | | *24* | **83471** | 82667 |
| Reserves | | *25* | **137801** | 137779 |
| Retained loss |  |  | **(50222)** | (59150) |
| Equity attributable to shareholders |  |  | **171050** | 161296 |
| Non-controlling interests | | *27* | **22409** | 19260 |
| **Total equity** |  |  | **193459** | 180556 |
| **Liabilities** |  |  |  |  |
| Provisions | | *28* | **2958** | 3294 |
| Deferred tax liabilities | | *16* | **5123** | 8034 |
| Cash-settled share-based payment | | *12.1* | **1029** | 974 |
| Lease liabilities | | *19* | **181** | 331 |
| **Total non-current liabilities** |  |  | **9291** | 12633 |
| Cash-settled share-based payment | | *12.1* | **1188** | 2053 |
| Lease liabilities | | *19* | **132** | 134 |
| Derivative financial liabilities | | *14.2* |  | 3095 |
| Income tax payable | | *16* | **1324** | 1562 |
| Trade and other payables | | *29* | **17454** | 9957 |
| Loan notes payable | | *30* | **7104** |  |
| Overdraft | | *23* | **5239** | 887 |
| **Total current liabilities** |  |  | **32441** | 17688 |
| **Total liabilities** |  |  | **41732** | 30321 |
| **Total equity and liabilities** |  |  | **235191** | 210877 |

---

The accompanying notes on pages 11 to 73 are an integral part of these consolidated financial statements.

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**Caledonia Mining Corporation Plc**

**Consolidated statements of changes in equity**

*For the years ended December 31,*

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

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | *Note* | *Note* | **Share capital** | **Foreign currency translation reserve** | **Contributed surplus** | **Equity-settled share-based payment reserve** | **Retained loss** | **Total** | **Non-controlling interests (NCI)** | **Total equity** |
| Balance January 1, 2020 |  |  | 56065 | (8621) | 132591 | 16760 | (88380) | 108415 | 16302 | 124717 |
| ***Transactions with owners:*** |  |  |  |  |  |  |  |  |  |  |
| Dividends declared | | *33* |  |  |  |  | (3887) | (3887) | (655) | (4542) |
| Shares issued: |  |  |  |  |  |  |  |  |  |  |
| - share-based payment | | *12.1* | 216 |  |  |  |  | 216 |  | 216 |
| - Options exercised |  |  | 30 |  |  |  |  | 30 |  | 30 |
| - Equity raise (net of transaction cost) |  |  | 12538 |  |  |  |  | 12538 |  | 12538 |
| - Blanket shares purchased from Fremiro | | *6* | 5847 |  |  | (2247) |  | 3600 | (3600) |  |
| ***Total comprehensive income:*** |  |  |  |  |  |  |  |  |  |  |
| Profit for the year |  |  |  |  |  |  | 20780 | 20780 | 4477 | 25257 |
| Other comprehensive loss for the year |  |  |  | (173) |  |  |  | (173) |  | (173) |
| Balance December 31, 2020 |  |  | 74696 | (8794) | 132591 | 14513 | (71487) | 141519 | 16524 | 158043 |
| ***Transactions with owners:*** |  |  |  |  |  |  |  |  |  |  |
| Dividends declared | | *33* |  |  |  |  | (6068) | (6068) | (2001) | (8069) |
| Shares issued: |  |  |  |  |  |  |  |  |  |  |
| - Options exercised | | *24* | 165 |  |  |  |  | 165 |  | 165 |
| - Equity raise (net of transaction cost) | | *24* | 7806 |  |  |  |  | 7806 |  | 7806 |
| ***Total comprehensive income:*** |  |  |  |  |  |  |  |  |  |  |
| Profit for the year |  |  |  |  |  |  | 18405 | 18405 | 4737 | 23142 |
| Other comprehensive loss for the year |  |  |  | (531) |  |  |  | (531) |  | (531) |
| Balance at December 31, 2021 |  |  | 82667 | (9325) | 132591 | 14513 | (59150) | 161296 | 19260 | 180556 |

---

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**Caledonia Mining Corporation Plc**

**Consolidated statements of changes in equity (continued)**

*For the years ended December 31,*

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

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | *Note* | *Note* | **Share capital** | **Foreign currency translation reserve** | **Contributed surplus** | **Equity-settled share-based payment reserve** | **Retained loss** | **Total** | **Non-controlling interests (NCI)** | **Total equity** |
| Balance at December 31, 2021 |  |  | 82667 | (9325) | 132591 | 14513 | (59150) | 161296 | 19260 | 180556 |
| ***Transactions with owners:*** |  |  |  |  |  |  |  |  |  |  |
| Dividends declared | | *33* | **-** | **-** | **-** | **-** | **(8975)** | **(8975)** | **(1814)** | **(10789)** |
| Share-based payments: |  |  |  |  |  |  |  |  |  |  |
| - Shares issued on settlement of incentive plan<br> Awards | | *12.1* | **804** | **-** | **-** | **-** | **-** | **804** | **-** | **804** |
| - Equity-settled share-based expense | | *12.2* | **-** | **-** | **-** | **484** | **-** | **484** | **-** | **484** |
| ***Total comprehensive income:*** |  |  |  |  |  |  |  |  |  |  |
| Profit for the year |  |  | **-** | **-** | **-** | **-** | **17903** | **17903** | **4963** | **22866** |
| Other comprehensive loss for the year |  |  | **-** | **(462)** | **-** | **-** | **-** | **(462)** | **-** | **(462)** |
| **Balance at December 31, 2022** |  |  | **83471** | **(9787)** | **132591** | **14997** | **(50222)** | **171050** | **22409** | **193459** |
|  | *Note* | *Note* | 24 | 25 | 25 | 25 |  |  | 27 |  |

---

The accompanying notes on pages 11 to 73 are an integral part of these consolidated financial statements.

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**Caledonia Mining Corporation Plc**

**Consolidated statements of cash flows**

*For the years ended December 31,*

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

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Note* | **2022** | 2021 | 2020 |
| **Cash generated from operations** | 31 | **49657** | 38703 | 37967 |
| Interest received |  | **17** | 14 | 56 |
| Net finance costs paid |  | **(192)** | (388) | (405) |
| Tax paid | 16 | **(6866)** | (7426) | (6656) |
| **Net cash generated from operating activities** |  | **42616** | 30903 | 30962 |
| **Cash flows used in investing activities** |  |  |  |  |
| Acquisition of property, plant and equipment |  | **(41495)** | (32112) | (25081) |
| Acquisition of exploration and evaluation assets |  | **(2596)** | (5717) | (2759) |
| Proceeds from sale of assets held for sale |  |  | 500 |  |
| Proceeds from (purchase of) derivative financial assets |  |  | 1066 | (1058) |
| Proceeds from disposal of subsidiary |  |  | 340 | 900 |
| Acquisition of Put options | 14.1 | **(478)** |  |  |
| **Net cash used in investing activities** |  | **(44569)** | (35923) | (27998) |
| **Cash flows from financing activities** |  |  |  |  |
| Dividends paid |  | **(8906)** | (8069) | (4542) |
| Term loan repayments |  |  | (361) | (574) |
| (Repayment of) proceeds from gold loan | 14.2 | **(3698)** | 2752 |  |
| Proceeds from Call options | 14.2 | **240** | 208 |  |
| Payment of lease liabilities | 19 | **(150)** | (129) | (118) |
| Shares issued – equity raise (net of transaction cost) | 24 |  | 7806 | 12538 |
| Proceeds from share options exercised | 24 |  | 165 | 30 |
| **Net cash (used in) from financing activities** |  | **(12514)** | 2372 | 7334 |
| **Net (decrease) increase in cash and cash equivalents** |  | **(14467)** | (2648) | 10298 |
| Effect of exchange rate fluctuations on cash and cash equivalents |  | **(302)** | (179) | (99) |
| Net cash and cash equivalents at the beginning of the year |  | **16265** | 19092 | 8893 |
| **Net cash and cash equivalents at the end of the year** | 23 | **1496** | 16265 | 19092 |

---

The accompanying notes on pages 11 to 73 are an integral part of these consolidated financial statements.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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| | |
|:---|:---|
| **1** | **Reporting entity** |

---

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

These consolidated financial statements of the Company and its subsidiaries (the "Group") comprise the consolidated statements of financial position as at December 31, 2022 and 2021, the consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for each of the years ended December 31, 2022, 2021 and 2020, disclosure notes, significant accounting policies and other explanatory information. The Group's primary involvement is in the operation of a gold mine and the exploration and development of mineral properties for precious metals.

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

---

| | |
|:---|:---|
| **2** | **Basis of preparation** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i)** **Statement of compliance** 

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

The consolidated financial statements were approved for issue by the Board of Directors on March 24, 2023.

**ii)** **Basis of measurement**

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

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

&nbsp;&nbsp;&nbsp;&nbsp;● equity-settled share-based payment arrangements measured at fair value on the grant date; and

&nbsp;&nbsp;&nbsp;&nbsp;● derivative financial assets and derivative financial liabilities measured at fair value.

**iii)** **Functional currency**

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

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

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| | |
|:---|:---|
| **3** | **Use of accounting assumptions, estimates and judgements** |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Estimation uncertainties** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i)** **Depreciation of property, plant and equipment** 

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

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

**ii)** **Mineral reserves and resources** 

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

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

● correlation between drill-holes intersections where multiple reefs intersect;

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

● appropriateness of the planned mining methods.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Assumptions and estimation uncertainties (continued)** 

**ii)** **Mineral reserves and resources (continued)**

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

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

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

● cut-off grade;

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

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

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

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

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

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

All Mineral Resources and Reserves are categorised and reported in compliance with the definitions embodied in the CIM Definition Standards as incorporated into the NI 43-101, and Mineral Resources are reported inclusive of Mineral Reserves. Inferred Mineral Resources are not converted to Mineral Reserves.

Inferred Mineral Resources are considered in the LoMP to the extent that they are required in accessing, by development infrastructure, the Measured and Indicated Mineral Resources. In addition geological continuity is modelled, whilst grade continuity is continually upgraded by drilling of the Inferred Mineral Resources at depth, and where these Mineral Resources are above the cut-off, economically viable and of sufficient confidence, will be upgraded and form part of eventual extraction and as a result are included in the calculation of depreciation. Refer to note 17 for the evaluation of the cut-off.

Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. An Inferred Mineral Resource has a lower level of confidence than that applied to an Indicated Mineral Resource. An Indicated Mineral Resource has a higher level of confidence than an Inferred Mineral Resource but has a lower level of confidence than a Measured Mineral Resource.

Mineral Resources in the Measured and Indicated Mineral Resource classifications have been converted into Proven and Probable Mineral Reserves respectively, by applying the applicable modifying factors and reasonable prospects of economic extraction.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Assumptions and estimation uncertainties (continued)** 

**iii)** **Impairment**

*Non-financial assets* 

When assessing impairment indicators at a Group level or at a CGU level requires the use of assumptions to calculate the value in use. The assumptions used include:

● the future estimated gold price;

● future estimated 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;

● planned future production from measured, indicated and inferred resources;

● the weighted average cost of capital;

● the discount rate; and

● future inflation.

Changes in reported 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 value in use(i.e. Impairment);

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

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

*Non-derivative financial assets* 

Loss given default is an estimate of the loss arising on default. It is based on the expected shortfalls in contractual cash flows. The Group uses a provision matrix to calculate the probability of default, which includes historical data, assumptions and expectations of future conditions.

**iv)** **Share-based payment transactions**

*Equity-settled share-based payment arrangements*

The Group measures the cost of equity-settled share-based payment transactions with employees, directors and Blanket's indigenous shareholders (refer to note 6) by reference to the fair value of the equity instruments on the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the appropriate valuation model and considering the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model, including the expected life of the share option, volatility and dividend yield.

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

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

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

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Assumptions and estimation uncertainties (continued)** 

**iv)** **Share-based payment transactions (continued)**

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

Additional information about significant assumptions and estimates used to determine the fair value of equity- settled share-based payment transactions are disclosed in note 12.2.

*Cash-settled share-based payment arrangements*

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**v)** **Taxes** 

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

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

**vi)** **Blanket mine**'**s indigenisation transaction** 

The initial indigenisation transaction and modifications to the indigenisation transaction of Blanket Mine (1983) (Private) Limited ("Blanket Mine") required management to make significant assumptions and estimates which are explained in note 6.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Assumptions and estimation uncertainties (continued)** 

**vii)** **Exploration and evaluation (**"**E&E**"**) assets**

The Group also makes assumptions and estimates regarding the possible impairment of E&E assets by evaluating whether it is likely that future economic benefits will flow to the Group, which may be based on assumptions about future events or circumstances. Assumptions and estimates made may change if new information becomes available. If information becomes available suggesting that the recovery of expenditures is unlikely, the amount capitalised is written off in profit or loss in the period the new information becomes available. The recoverability of the carrying amount of exploration and evaluation assets depends on the availability of sufficient funding to bring the properties into commercial production, the price of the products to be recovered and the undertaking of profitable mining operations. As a result of these uncertainties, the actual amount recovered may vary significantly from the carrying amount. Refer to note 4(j) for the accounting policy on E&E assets.

**viii)** **Site restoration provision** 

The site restoration provision has been calculated for the Blanket Mine based on an independent analysis of the rehabilitation costs as performed in 2021. Assumptions and estimates are made when determining the inflationary effect on current restoration costs and the discount rate to be applied in arriving at the present value of the provision where the time value of money effect is significant. Assumptions, based on the current economic environment, have been made that management believes are a reasonable basis for estimating the future liability. These estimates take into account any material changes to the assumptions that occur when reviewed by management. Estimates are reviewed annually and are based on current regulatory requirements. Significant changes in estimates of contamination, restoration standards and techniques will result in changes to the provision from period to period. Actual rehabilitation costs will ultimately depend on future market prices for the rehabilitation. The final cost of the currently recognised site rehabilitation provision may be higher or lower than currently provided for (refer to note 28).

**(b) Judgements** 

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

For judgement applied to:

● determine functional currency of entities in the Group and the use of the interbank rate of exchange to translate RTGS$, refer to note 13,

● impairments, refer to note 17 and 18, and

● derivative financial instruments, refer to note 14.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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| | |
|:---|:---|
| **4** | **Significant accounting policies** |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a)** **Basis of consolidation** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i)** **Subsidiaries and structured entities** 

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

**ii)** **Loss of control**

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

**iii)** **Non-controlling interests**

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

**iv)** **Transactions eliminated on consolidation**

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Revenue** 

Revenue from the sale of precious metals is recognised when the metal is accepted at the refinery ("Lodgment date") by Fidelity Printers and Refiners Limited ("Fidelity"). Control is transferred and the receipt of proceeds is substantially assured at point of delivery. Revenue for each delivery is measured at the London Base Metal Association Tuesday PM price post-delivery less 1.25% and the quantities are determined on Lodgment date. On average settlement occurs within 14 days of delivery. 5% Royalties are payable on gold sales after the 1.25% discount to Fidelity.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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| | |
|:---|:---|
| **4** | **Significant accounting policies (continued)** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** **Impairment** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i)** **Expected credit losses on financial assets** 

The Group applies the IFRS 9 simplified model and recognises lifetime expected credit losses for all trade receivables as these items do not have a significant financing component. In measuring the expected credit losses, the trade receivables have been assessed individually as they possess different credit risk characteristics. Trade receivables have been assessed based on the days past due. The expected loss rates are based on the payment profile for gold sales over the past 48 months prior to December 31, of each year reported. The historical rates are adjusted to reflect current and forward looking macroeconomic factors affecting the customer's ability to settle the amount outstanding. The Group considers a trade receivable to be in default when the amount is 90 days past due from lodgement date. Failure to make payments within 90 days from lodgement date and failure to engage with the Group on alternative payment arrangement, amongst others, are considered indicators of no reasonable expectation of recovery. Trade and other receivables are written off (i.e. derecognised) when there is no reasonable expectation of recovery. Other receivables relate to VAT receivables that is not a financial asset.

**ii)** **Non-financial assets**

The carrying amounts of the Group's non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit" or "CGU"). The Group's corporate assets do not generate separate cash inflows. If there is an indication that a CGU to which a corporate asset is allocated may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs.

An impairment loss is recognised if the carrying amount of a CGU exceeds its estimated recoverable amount. Impairment losses recognised in respect of CGUs are allocated to reduce the carrying amount of assets in the unit (group of units) on a pro rata basis. Impairment losses recognised in prior years are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been an indication of reversal and a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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| | |
|:---|:---|
| **4** | **Significant accounting policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** **Impairment (continued)** 

**iii)** **Impairment of Exploration and evaluation (**"**E&E**"**) assets**

The test for impairment of E&E assets can combine several CGUs as long as the combination is not larger than a segment. The CGU does, however, change once development activities have begun. There are specific impairment triggers for E&E assets. Despite certain relief in respect of impairment triggers and the level of aggregation, the impairment standard is applied in measuring the impairment of E&E assets. Reversals of impairment losses are required in the event that the circumstances that resulted in impairment have changed.

E&E assets are assessed for impairment only when facts and circumstances suggest that the carrying amount of an E&E asset may exceed its recoverable amount. Indicators of impairment include the following:

● The entity's right to explore in the specific area has expired or will expire in the near future and is not expected to be renewed.

● Substantive expenditure on further E&E activities in the specific area is neither budgeted nor planned in future.

● The entity has not discovered commercially viable quantities of mineral resources as a result of E&E activities in the area to date and has decided to discontinue such activities in the specific area.

● Even if development is likely to proceed, the entity has sufficient data indicating that the carrying amount of the asset is unlikely to be recovered in full from successful development or by sale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d)** **Share-based payment transactions** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i)** **Equity-settled share-based payments to third parties, employees and directors** 

The grant date fair value of equity-settled share-based payment awards granted to employees and directors is recognised as an expense, with a corresponding increase in equity, over the vesting period of the award. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market vesting conditions at the vesting date.

Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in profit or loss.

Additional information about significant judgements, estimates and the assumptions used to estimate the fair value of equity-settled share-based payment transactions are disclosed in note 12.2.

**ii)** **Cash-settled share-based payments to employees and directors**

The grant date fair value of cash-settled awards granted to employees and directors is recognised as an expense, with a corresponding increase in the liability, over the vesting period of the awards. At each reporting date the fair value of the awards is re-measured with a corresponding adjustment to profit or loss. Additional information about significant judgements, estimates and the assumptions used to estimate the fair value of cash-settled share-based payment transactions are disclosed in note 12.1.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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| | |
|:---|:---|
| **4** | **Significant accounting policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(e)** **Foreign currency** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i)** **Foreign operations** 

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

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

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

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

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

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

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

**ii)** **Foreign currency translation**

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

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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| | |
|:---|:---|
| **4** | **Significant accounting policies (continued)** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(e)** **Foreign currency (continued)** 

**ii)** **Foreign currency translation (continued)**

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

● the majority of revenue is received in US Dollars;

● the gold price receivable was calculated in US Dollars;

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(f)** **Finance income and finance cost** 

Finance income comprises interest income on funds invested. Finance income is recognised as it accrues in profit or loss, using the effective interest method. Finance cost comprise interest expense on the rehabilitation provisions, interest on bank overdraft balances, effective interest on leases, loans and borrowings and also includes commitment costs on overdraft facilities. Finance cost is recognised in profit or loss using the effective interest rate method and excludes borrowing costs capitalised.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(g)** **Borrowing costs** 

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.

Other borrowing costs are expensed in the period in which they are incurred and recognised as finance cost.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(h)** **Taxes** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i)** **Income tax** 

Tax expense comprises current and deferred tax. These expenses are recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.

**ii)** **Current tax**

Current tax is the tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date. Current tax includes withholding tax on management fees and dividends paid between companies within the Group.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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| | |
|:---|:---|
| **4** | **Significant accounting policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(h)** **Taxes (continued)** 

**iii)** **Deferred tax**

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future.

Deferred tax is a monetary item measured at the tax rates and in the currency that are expected to be applied when temporary differences reverse. The tax and exchange rates are based on the laws that have been enacted, substantively enacted or the interbank exchange rates that prevail at the reporting date.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(i)** **Property, plant and equipment** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i)** **Recognition and measurement** 

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, borrowing costs on qualifying assets, the costs of dismantling and removing the items and restoring the site on which they are located. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised in profit or loss. Refer to note 4(c)(ii) for the impairment of non-financial assets.

**ii)** **Subsequent costs**

The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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| | |
|:---|:---|
| **4** | **Significant accounting policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(i)** **Property, plant and equipment (continued)** 

**iii)** **Depreciation**

Depreciation is calculated to write off the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. On commencement of commercial production, depreciation of mine development, infrastructure and other assets is calculated on the unit-of-production method using the Measured, Indicated and Inferred Mineral Resources of which the diluted Measured and Indicated Mineral Resources are converted to Mineral Reserves for extraction in Blanket's life-of-mine plan ("LoMP"). Resources that are not included in the LoMP are not included in the calculation of depreciation.

For other categories, depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

Land is not depreciated.

The calculation of the production rate units could be affected to the extent that actual production in the future is different from the current forecast production. This would generally result from the extent to which there are significant changes in any of the factors or assumptions used in estimating mineral reserves and resources.

These factors include:

&nbsp;&nbsp;&nbsp;&nbsp;● changes in mineral reserves and resources;

&nbsp;&nbsp;&nbsp;&nbsp;● differences between actual commodity prices and commodity price assumptions;

&nbsp;&nbsp;&nbsp;&nbsp;● unforeseen operational issues at mine sites; and

&nbsp;&nbsp;&nbsp;&nbsp;● changes in capital, operating, mining, processing and reclamation costs, discount rates and foreign exchange rates.

The estimated useful lives for the current and comparative years are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;● buildings 10 to 15 years (2021: 10 to 15 years; 2020: 10 to 15 years);

&nbsp;&nbsp;&nbsp;&nbsp;● plant and equipment 10 years (2021: 10 years; 2020: 10 years);

&nbsp;&nbsp;&nbsp;&nbsp;● fixtures and fittings including computers 4 to 10 years (2021: 4 to 10 years; 2020: 4 to 10 years);

&nbsp;&nbsp;&nbsp;&nbsp;● motor vehicles 4 years (2021: 4 years; 2020: 4 years);

&nbsp;&nbsp;&nbsp;&nbsp;● right of use assets 3 to 6 years (determined by lease term); and

&nbsp;&nbsp;&nbsp;&nbsp;● mine development, infrastructure and other assets in production, units-of-production method.

Depreciation methods, useful lives and residual values are reviewed each financial year and adjusted if appropriate. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Assets under construction's useful life and residual values will be assessed once the asset is available for use.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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| | |
|:---|:---|
| **4** | **Significant accounting policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(j)** **Exploration and evaluation assets** 

Qualifying exploration costs are capitalised as incurred. Costs incurred before the legal rights to explore are obtained are recognised in profit or loss. The costs related to speculative drilling on unestablished orebodies at the Blanket Mine, general administrative or overhead costs are expensed as incurred. Exploration and evaluation costs capitalised are disclosed under Exploration and evaluation assets. Qualifying direct expenditures include such costs as mineral rights, options to acquire mineral rights, materials used, surveying costs, drilling costs, payments made to contractors, direct administrative costs and depreciation on property, plant and equipment during the exploration phase.

Costs not directly attributable to exploration and evaluation activities, including general administrative overhead costs, are expensed in the year they occur.

Once the technical feasibility and commercial viability of extracting the mineral resource have been determined, the property is considered to be a mine under development and moved to the mine development, infrastructure and other asset category within property, plant and equipment. Capitalised direct costs related to the acquisition, exploration and development of mineral properties remain capitalised, at their initial cost, until the properties to which they relate are ready for their intended use, sold, abandoned or management has determined there to be impairment. Exploration and evaluation assets are tested for impairment before the assets are transferred to mine development, infrastructure and other assets or when an indicator of impairment is identified.

Exploration and evaluations assets are not depreciated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(k)** **Inventories** 

Consumable stores are measured at the lower of cost and net realisable value. The cost of consumable stores is based on the weighted average cost principle. It includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. Gold in process is measured at the lower of cost and net realisable value. The cost of gold in process includes an appropriate share of production overheads based on normal operating capacity and is valued on the weighted average cost principle. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(l)** **Financial instruments** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i)** **Financial assets** 

The Group had the following financial assets:

*Financial assets at amortised cost*

Financial assets at amortised cost comprise loans and receivables included in Trade and other receivables. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method, less any impairment losses. A trade receivable without a significant financing component is initially measured at the transaction price. Refer to note 4(c)(i) for the impairment of receivables. Finance income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest is immaterial.

The Group uses a simplified approach in accounting for trade receivables and records the loss allowance as lifetime expected credit losses. When measuring expected credit losses, the Group uses reasonable and supportable forward-looking information, which is based on the assumptions for the future movement of different economic drivers and how these drivers will affect each other.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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---

| | |
|:---|:---|
| **4** | **Significant accounting policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(l)** **Financial instruments (continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i)** **Financial assets (continued)** 

*Fair value through profit or loss* 

This category comprises the Gold ETF, Gold hedge and Put options. These instruments are carried in the consolidated statement of financial position at fair value with changes in fair value recognised in profit or loss as Fair value losses on derivative financial instruments. Transaction costs are recognised in profit or loss in the consolidated statement profit or loss and other comprehensive income immediately when incurred. The Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss. Estimations made and further information is referred to in note 14.

**ii)** **Financial liabilities**

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

*Fair value through profit or loss* 

Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value. This category comprises the Gold loan and the Call options, estimations made and further information is referred to in note 14. All changes in the fair value of derivative instruments are accounted for in profit or loss.

*Financial liabilities at amortised cost*

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

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

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

**iii)** **Offsetting** 

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(iv)** **Cash and cash equivalents** 

Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less. Bank overdrafts are repayable on demand and form an integral part of the Group's cash management process. The bank overdraft is included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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| | |
|:---|:---|
| **4** | **Significant accounting policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(m)** **Share capital** 

Share capital is classified as equity. Incremental costs directly attributable to the issue, consolidation and repurchase of fractional items of shares and share options are recognised as a deduction from equity, net of any tax effects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(n)** **Provisions** 

A provision is a liability of uncertain timing and amount. A liability is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability if the time value of money is considered significant. The unwinding of the discount is recognised as a finance cost.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(o)** **Site restoration** 

The Group recognises liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of property, plant and equipment, when those obligations result from the acquisition, construction, development or normal operation of these assets. The net present value of future rehabilitation cost estimates arising from the decommissioning of plant and other site preparation work is capitalised to mineral properties along with a corresponding increase in the rehabilitation provision in the period incurred. Future rehabilitation costs are discounted using a pre-tax risk-free rate that reflects the time-value of money. The Group's estimates of rehabilitation costs, which are reviewed annually, could change as a result of changes in regulatory requirements, discount rates, effects of inflation and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to mineral properties with a corresponding entry to the rehabilitation provision, except for changes in unwinding of finance cost that are recorded in profit or loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(p)** **Leases** 

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

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

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

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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| | |
|:---|:---|
| **4** | **Significant accounting policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(p)** **Leases (continued)** 

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

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

● fixed payments, including in-substance fixed payments;

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

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

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

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(q)** **Employee benefits** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i)** **Short-term employee benefits** 

Short-term employee benefits are expensed when the related services are provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

**ii)** **Defined contribution plans**

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution plan that are due more than 12 months after the end of the period in which the employees render the service are discounted to their present value.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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| | |
|:---|:---|
| **4** | **Significant accounting policies (continued)** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(r)** **Assets held for sale** 

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held for sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use.

Such assets, or disposal groups, are generally measured at the lower of their carrying amount or fair value less costs to sell. Impairment losses on initial classification as held for sale or held for distribution and subsequent gains and losses on remeasurement are recognised in profit or loss.

Once classified as held for sale property, plant and equipment are no longer depreciated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(s)** **Standards issued but not yet effective** 

The following standards, amendments to standards and interpretations to existing standards that impact the Group:

---

| | | |
|:---|:---|:---|
| **Standard/ Interpretation** | **Standard/ Interpretation** | **Effective date and expected adoption date<sup>\*</sup>** |
| Classification of Liabilities as Current or Non-current – Amendments to IAS 1 | The amendments, as issued in 2020, aim to clarify the requirement on determining whether a liability is current or non-current, and apply for annual reporting period beginning on or after January 1, 2023. However, the IASB has subsequently proposed future amendments to IAS 1 and deferred the effective date of the 2020 amendments to no earlier than January 1, 2024. Due to these ongoing developments, the Group is unable to determine the impact of these amendments on the consolidated financial statements in the period of initial application. The Group is closely monitoring the developments | January 1, 2024 |
| Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2 | The IASB amended IAS 1 to require entities to disclose their material rather than their significant accounting policies. The amendments define what is 'material accounting policy information' and explain how to identify when accounting policy information is material. They further clarify that immaterial accounting policy information does not need to be disclosed. If it is disclosed, it should not obscure material accounting information.<br>To support this amendment, the IASB also amended IFRS Practice Statement 2 Making Materiality Judgements to provide guidance on how to apply the concept of materiality to accounting policy disclosures. | January 1, 2023 |

---

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**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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| | |
|:---|:---|
| **4** | **Significant accounting policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(s)** **Standards issued but not yet (continued)** 

---

| | | |
|:---|:---|:---|
| **Standard/ Interpretation** | **Standard/ Interpretation** | **Effective date and expected adoption date<sup>\*</sup>** |
| Definition of Accounting estimates – Amendments to IAS 8 | The amendment to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors clarifies how companies should distinguish changes in accounting policies from changes in accounting estimates. The distinction is important, because changes in accounting estimates are applied prospectively to future transactions and other future events, whereas changes in accounting policies are generally applied retrospectively to past transactions and other past events as well as the current period. | January 1, 2023 |
| Deferred tax related to assets and liabilities arising from a single transaction – Amendments to IAS 12 | The amendments to IAS 12 *Income Taxes* require companies to recognise deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. They will typically apply to transactions such as leases of lessees and decommissioning obligations and will require the recognition of additional deferred tax assets and liabilities.<br>The amendment should be applied to transactions that occur on or after the beginning of the earliest comparative period presented. In addition, entities should recognise deferred tax assets (to the extent that it is probable that they can be utilised) and deferred tax liabilities at the beginning of the earliest comparative period for all deductible and taxable temporary differences associated with:<br>● right-of-use assets and lease liabilities, and<br> ● decommissioning, restoration and similar liabilities, and the corresponding amounts recognised as part of the cost of the related assets.<br>The cumulative effect of recognising these adjustments is recognised in retained earnings, or another component of equity, as appropriate. IAS 12 did not previously address how to account for the tax effects of on-balance sheet leases and similar transactions and various approaches were considered acceptable. | January 1, 2023 |

---

<sup>\*</sup> Annual periods ending on or after.

The Group has completed its assessment of the impact of the above standards and concluded that the standard amendments would not have a material impact on the consolidated financial statements.

New standards, amendments to standards and interpretations adopted from 1 January 2022 had no significant effect on the Group's accounting policies.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Bilboes** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1** **Tribute Arrangement and Mining Agreement** 

On July 21, 2022 Caledonia Holdings Zimbabwe (Private) Limited ("CHZ") entered into a Tribute Arrangement, and related Mining Agreement with Bilboes Holdings (Private) Limited ("Bilboes Holdings") to mine the oxide and transitional ore and will receive 100% of the revenue of the mining operations ("tribute agreement"). This tribute agreement is specific to the oxide and transitional ore mining operations of Bilboes Holdings which management estimates would result in the mining of 12,500-17,000 ounces of gold production in 2023 and 20 000 ounces of gold per annum thereafter for approximately 20 months. At the date of the tribute agreement Bilboes Holdings was on care and maintenance.

In terms of the tribute agreement, Bilboes Holdings granted CHZ the right to obtain a tribute over the oxide mining operations of Bilboes Holdings for the purpose of working the same and winning gold therefrom.

In terms of this right, CHZ shall operate the mine using a combination of Bilboes resources and their own, to develop and to extract ore and dispose of the products for CHZ's account.

Subject to the stipulation in the tribute agreement, CHZ shall assume all responsibility in connection with the mining claims as if CHZ were the owner thereof. Bilboes Holdings shall remain the registered holder of the mining claims.

CHZ has the right to provide instructions over the scope of works for the oxide mining process in terms of the operational Plan and also has the right to terminate the tribute agreement. CHZ, therefore, has the ability to affect the variable returns of Bilboes Holdings and in essence to ensure its returns are in line with the expectation of recouping its "investment" (all funds provided) at a 25% internal rate of return.

CHZ has the ultimate decision making power and is deemed to control the oxide mine. On the effective date, August 1, 2022, when the Ministry of Mines approval was received, control was obtained through contractual arrangement. The purchase price was zero, as there is no stated purchase.

The oxide mine does not have sufficient processes currently in place to govern the mining operations and will be reliant on CHZ to provide instructions on the mining operations to create the necessary outputs. The oxide mine was assessed as an asset acquisition and not a business combination in terms of IFRS 3 Business Combinations.

The directly attributable costs of bringing the oxide plant to the location and condition necessary for it to be capable of operating in the manner intended by CHZ was estimated at $872. Therefore, the property, plant and equipment was initially recognised and measured at $872 (refer to note 17) with a related payable recognised as this has not been paid by 31 December 2022 (refer to note 29).

CHZ paid for all Bilboes Holdings expenditure that was needed to be applied against its' working capital liabilities of Bilboes Holdings in the period prior to the effective date of the tribute agreement. The above payments incurred will be set off against the consideration due under the Sale and Purchase Agreement described in note 5.2. A total amount of $877 was incurred for the above payment as at December 31, 2022 and included in Prepayments (refer to note 21).

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Bilboes (continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1** **Tribute Arrangement and Mining Agreement (continued)** 

As at December 31, 2022 a total amount of $830 for cost incurred by CHZ between the effective date (August 1, 2022) and the commencement date of the oxide mining operations (December 1, 2022) relating to administration and other general costs was included in Other expenses (refer to note 10). These costs were incurred to maintain the operational integrity of the oxide mine and do not relate to direct costs of bringing the oxide plant to the location and condition necessary for it to be capable of operating in the manner intended by CHZ. Included in Prepayments is an amount of $802 paid to suppliers after the commencement date of the oxide mining operations to re-start the oxide mining project (refer to note 21).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.2** **Acquisition of Bilboes Gold Limited (subsequent event)** 

Caledonia signed a conditional agreement (the "Sale and Purchase Agreement") to purchase Bilboes Gold Limited ("Bilboes Gold") on July 21, 2022. Bilboes Gold, through its subsidiary Bilboes Holdings, owns a high-grade gold deposit ("Bilboes Mine") located in Zimbabwe. It was agreed that Caledonia would purchase Bilboes Gold Limited for a consideration to be settled by issue to the sellers of 5,123,044 new shares in Caledonia, comprising initial consideration shares, escrow consideration shares and deferred consideration shares (the latter being subject to adjustment in terms of a completion accounts mechanism (the "Completion Accounts")). In addition to the shares, the agreement was also to grant a 1 percent net smelter royalty ("NSR") on the Bilboes Mine's revenues to one of the sellers Baker Steel Resources Trust Limited ("Baker Steel"), essentially instead of a number of shares that they would have been entitled to should they have agreed to accept all of their consideration in shares.

The acquisition of Bilboes Gold will be classified an asset acquisition and not a business combination in terms of IFRS 3 *Business Combinations*.

Upon completion of the transaction on January 6, 2023, the initial consideration shares were issued, in the amount of 4,425,797 common shares, to the three sellers of Bilboes Gold and the NSR agreement was signed. The value of the shares issued based on the last trading day's closing share price on NYSE American LLC before completion of US$12.82 per share resulted in a total value of the shares issued of $56.74 million on completion.

The escrow consideration shares consist of 441,095 common shares of Caledonia which will be issued to one of the sellers in settlement of a separate commercial arrangement between its subsidiary and the holding company of another seller, and upon receipt by the Company of a "share adjustment notice" instructing the issue of the shares. The share adjustment notice can only be issued once approval has been obtained from the Reserve Bank of Zimbabwe for such commercial arrangement. At the date these financial statements were signed no share adjustment notice had been issued. Once the share adjustment notice is received, Caledonia will allot and issue the escrow consideration shares as soon as reasonably practicable.

Deferred consideration shares consist of 256,152 common shares of Caledonia and will be issued to the sellers of Bilboes Gold within 5 business days of the date on which completion accounts are agreed at the issue price. The deferred consideration shares will be adjusted in accordance with any adjustments applied to take into account changes in the financial position of Bilboes Gold from signing the Sale and Purchase Agreement to completion. In the unlikely event that the consideration is increased, the total consideration shares are limited to a maximum of 5,497,293 shares.

If all of the deferred consideration shares are issued without adjustment, assuming that the escrow consideration shares are issued, the total value of the consideration shares at the date of completion would be US$65,677,424.

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**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Bilboes (continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.2** **Acquisition of Bilboes Gold Limited (subsequent event) (continued)** 

The deferred consideration shares will be adjusted as the working capital was adjusted from July 21, 2022 and January 6, 2023 excluding costs to maintain the operational integrity of Bilboes, provided that the maximum aggregate number of consideration shares to be issued under the Sale and Purchase Agreement does not exceed 5,497,293 shares.

In terms of the Sale and Purchase Agreement, Caledonia may also elect to reduce the number of deferred consideration shares by the amount that is payable by Bilboes Gold in respect of a settled claim, defined in the Sale and Purchase Agreement as a claim against Bilboes Gold, which is agreed to be resolved by arbitration or unconditionally withdrawn or abandoned as agreed between Caledonia and Bilboes Gold.

No escrow considerations shares or deferred consideration shares were issued at the date of signing of these consolidated financial statements.

---

| | |
|:---|:---|
| **6** | **Blanket Zimbabwe Indigenisation Transaction** |

---

On February 20, 2012 the Group announced it had signed a Memorandum of Understanding ("MoU") with the Minister of Youth, Development, Indigenisation and Empowerment of the Government of Zimbabwe pursuant to which the Group agreed that indigenous Zimbabweans would acquire an effective 51% ownership interest in the Zimbabwean company owning the Blanket Mine (also referred to herein as "Blanket" or "Blanket Mine" as the context requires) for a paid transactional value of $30.09 million. Pursuant to the above, members of the Group entered into agreements with each indigenous shareholder to transfer 51% of the Group's ownership interest in Blanket Mine whereby it:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• sold a 16% interest to the National Indigenisation and Economic Empowerment Fund ("NIEEF") for $11.74 million;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• sold a 15% interest to Fremiro Investments (Private) Limited ("Fremiro"), which is owned by indigenous Zimbabweans, for $11.01 million;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• sold a 10% interest to Blanket Employee Trust Services (Private) Limited ("BETS") for the benefit of present and future managers and employees for $7.34 million. The shares in BETS are held by the Blanket Mine Employee Trust ("Employee Trust") with Blanket Mine's employees holding participation units in the Employee Trust; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• donated a 10% ownership interest to the Gwanda Community Share Ownership Trust ("Community Trust"). In addition, Blanket Mine paid a non-refundable donation of $1 million to the Community Trust.

The Group facilitated the vendor funding of these transactions which is repaid by way of dividends from Blanket Mine. 80% of dividends declared by Blanket Mine are used to repay such loans and the remaining 20% unconditionally accrues to the respective indigenous shareholders. Following a modification to the interest rate on June 23, 2017, outstanding balances on these facilitation loans attract interest at a rate of the lower of a fixed 7.25% per annum payable quarterly or 80% of the Blanket Mine dividend in the quarter. The timing of the loan repayments depends on the future financial performance of Blanket Mine and the extent of future dividends declared by Blanket Mine. The Group related facilitation loans were transferred as dividends in specie intra-group and now the loans and most of the interest thereon is payable to the Company.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **6** | **Blanket Zimbabwe Indigenisation Transaction (continued)** |

---

**Accounting treatment**

The directors of Caledonia Holdings Zimbabwe (Private) Limited ("CHZ"), a wholly-owned subsidiary of the Company, performed a reassessment using the requirements of IFRS 10: Consolidated Financial Statements (IFRS 10). It was concluded that CHZ should continue to consolidate Blanket Mine after the indigenisation. The subscription agreements with the indigenous shareholders have been accounted for accordingly as a transaction with non-controlling interests and as a share-based payment transaction.

The subscription agreements, concluded on February 20, 2012, were accounted for as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Non-controlling interests ("NCI") were recognised on the portion of shareholding upon which dividends declared by Blanket Mine will accrue unconditionally to equity holders as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) 20% of the 16% shareholding of NIEEF;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) 20% of the 15% shareholding of Fremiro; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) 100% of the 10% shareholding of the Community Trust.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• This effectively means that NCI was initially recognised at 16.2% of the net assets of Blanket Mine, until the completion of the transaction with Fremiro, whereby the NCI reduced to 13.2% (see below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The remaining 80% of the shareholding of NIEEF and Fremiro was recognised as NCI to the extent that their attributable share of the net asset value of Blanket Mine exceeds the balance on the facilitation loans, including interest. At December 31, 2022 the attributable net asset value did not exceed the balance on the respective loan account and thus no additional NCI was recognised.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The transaction with BETS is accounted for in accordance with IAS 19 *Employee Benefits* (profit sharing arrangement) as the ownership of the shares does not ultimately pass to the employees. The employees are entitled to participate in 20% of the dividends accruing to the 10% shareholding in Blanket Mine if they are employed at the date of such distribution. To the extent that 80% of the attributable dividends exceeds the balance on the BETS facilitation loan, they will accrue to the employees at the date of such declaration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• BETS is an entity effectively controlled and consolidated by Blanket Mine. Accordingly, the shares held by BETS are effectively treated as treasury shares in Blanket Mine and no NCI is recognised.

*Fremiro purchase agreement*

On November 5, 2018 the Company and Fremiro entered into a sale agreement for Caledonia to purchase Fremiro's 15% shareholding in Blanket Mine. On January 20, 2020 all substantive conditions to the transaction were satisfied. The Company issued 727,266 shares to Fremiro for the cancellation of their facilitation loan and purchase of Fremiro's 15% shareholding in Blanket Mine. The transaction was accounted for as a repurchase of a previously vested equity instrument. As a result, the Fremiro share of the NCI of $3,600 was derecognised, shares were issued at fair value, the share-based payment reserve was reduced by $2,247 and the Company's shareholding in Blanket Mine increased to 64% on the effective date.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **6** | **Blanket Zimbabwe Indigenisation Transaction (continued)** |

---

**Accounting treatment (continued)**

**Blanket Mine**'**s indigenisation shareholding percentages and facilitation loan balances**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Shareholding | Effective interest & NCI recognised | NCI subject to facilitation loan | Balance of facilitation<br> loan <sup>#</sup> | Balance of facilitation<br> loan <sup>#</sup> |
| **USD** |  |  |  | **December 31, 2022** | December 31, 2021 |
| NIEEF | 16% | 3.2% | 12.8% | **9414** | 10359 |
| Community Trust | 10% | 10.0% | 0.0% |  |  |
| BETS <sup>~</sup> | 10% | -\* | -\* | **5612** | 6353 |
|  | 36% | 13.2% | 12.8% | **15026** | 16712 |

---

\* The shares held by BETS are effectively treated as treasury shares (see above).

<sup>~</sup> Accounted for under IAS19 *Employee Benefits.*

<sup>#</sup> Facilitation loans are accounted for as equity instruments and are accordingly not recognised as loans receivable.

The balance on the facilitation loans is reconciled as follows:

---

| | | |
|:---|:---|:---|
|  | **2022** | 2021 |
| Balance at January 1 | **16712** | 19175 |
| Interest incurred | **580** | 1313 |
| Dividends used to repay loan | **(2266)** | (3776) |
| Balance at December 31 | **15026** | 16712 |

---

**Advance dividend loans and balances**

In anticipation of completing the underlying subscription agreements, Blanket Mine agreed to advance dividend arrangements with NIEEF and the Community Trust. Advances made to the Community Trust against their right to receive dividends declared by Blanket Mine on their shareholding were as follows:

&nbsp;&nbsp;&nbsp;&nbsp;• a $2 million payment on or before September 30, 2012;

&nbsp;&nbsp;&nbsp;&nbsp;• a $1 million payment on or before February 28, 2013; and

&nbsp;&nbsp;&nbsp;&nbsp;• a $1 million payment on or before April 30, 2013.

These advance payments were debited to a loan account bearing interest at a rate at the lower of a fixed 7.25% per annum, payable quarterly or the Blanket Mine dividend in the quarter to the advanced dividend loan holder. The loan is repayable by way of set-off of future dividends on the Blanket Mine shares owned by the Community Trust. Advances made to NIEEF as an advanced dividend loan before 2013 have been settled through Blanket Mine dividend repayments in 2014. The advance dividend payments were recognised as distributions to shareholders and they are classified as equity instruments. The loans arising are not recognised as loans receivables, because repayment is by way of uncertain future dividends. The final payment to settle the advance dividend loan to the Community Trust was made on September 22, 2021. Future dividends to the Community Trust will be unencumbered from date the loan was settled in full.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **7** | **Capital management** |

---

When managing capital, the Group's objectives are to safeguard its ability to continue as a going concern in order to pursue the mining operations and exploration potential of the mineral properties. The Group's capital includes shareholders' equity, comprising issued share capital (refer to note 24), reserves (refer to note 25), accumulated other comprehensive income, accumulated deficit, bank financing (refer to notes 23) and non-controlling interests (refer to note 27).

---

| | | |
|:---|:---|:---|
|  | **2022** | 2021 |
| Total equity | **193459** | 180556 |

---

The Group's primary objective regarding its capital management is to ensure that it has sufficient cash resources to maintain its on-going operations, provide returns for shareholders, accommodate any rehabilitation provisions and pursue growth opportunities. It assesses its short term needs and funds these by available cash, overdrafts and short to medium term loans. Capital requirements for future project are evaluated on a case-by-case basis. As at December 31, 2022, there has been no change with respect to the overall capital risk management strategy.

---

| | |
|:---|:---|
| **8** | **Revenue** |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | 2021 | 2020 |
| Revenue | **142082** | 121329 | 100002 |
| Revenue from silver sales | **116** | 122 | 86 |
| Revenue from gold sales | **141966** | 121207 | 99916 |
| Total ounces gold sold | **80094** | 68617 | 57137 |
| Net work in progress and refinery (oz) | **681** | (1141) | 762 |
| Gold produced (oz) | **80775** | 67476 | 57899 |
| Tonnes milled | **752033** | 665628 | 597962 |
| Grade | **3.56** | 3.36 | 3.21 |
| Recovery | **93.8** | 93.9 | 93.8 |
| Realised gold price ($/oz) | **1772** | 1766 | 1749 |

---

---

| | |
|:---|:---|
| **9** | **Production costs** |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | 2021 | 2020 |
| Salaries and wages\* | **23037** | 20609 | 16122 |
| Consumable materials – Operations\* | **23601** | 17375 | 14938 |
| Consumable materials – COVID-19 | **311** | 297 | 824 |
| Electricity costs\* | **9634** | 10407 | 8312 |
| Safety | **998** | 774 | 708 |
| Cash-settled share-based expense (note 12.1(a)) | **853** | 692 | 634 |
| On mine administration\* | **2736** | 1806 | 1304 |
| Security costs | **1093** | 826 | 496 |
| Obsolete inventory (note 20) | **563** | 36 |  |
| Pre-feasibility exploration costs | **172** | 304 | 373 |
|  | **62998** | 53126 | 43711 |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **9** | **Production costs (continued)** |

---

\* Gold work in progress included in the production cost amounts above were:

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | 2021 | 2020 |
| Salaries and wages | **(151)** | 94 | 311 |
| Consumable materials – Operations | **(226)** | 87 | 580 |
| Electricity costs | **(43)** | 44 | 241 |
| On mine administration | **(26)** | 18 | 34 |
|  | **(446)** | 243 | 1166 |

---

The gold work in progress movement is negative in 2022 due to the high gold work in progress ounces at year end.

---

| | |
|:---|:---|
| **10** | **Other expenses** |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | 2021 | 2020 |
| Intermediated Money Transaction Tax \* | **1378** | 799 | 451 |
| Solar evaluation cost |  |  | 230 |
| COVID-19 donations |  | 74 | 1322 |
| Community and social responsibility cost | **898** | 1167 | 382 |
| Impairment of property, plant and equipment - plant and equipment (note 17) | **8209** | 498 |  |
| Impairment of exploration and evaluation assets – Connemara North and Glen Hume (note 18) | **467** | 3837 | 2930 |
| Expected credit losses on deferred consideration on the disposal of subsidiary |  | 761 |  |
| Bilboes pre-operational expenses (note 5) | **830** |  |  |
|  | **11782** | 7136 | 5315 |

---

\* Intermediated Money Transfer Tax ("IMTT") is tax chargeable in Zimbabwe on transfer of physical money, electronically or by any other means, between two or more persons. The presidential announcement made on May 7, 2022 increased the IMTT charges on all domestic foreign currency transfers from 2% to 4%, 

---

| | |
|:---|:---|
| **11** | **Administrative expenses** |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | 2021 | 2020 |
| Investor relations | **663** | 439 | 353 |
| Audit fee | **294** | 267 | 288 |
| Advisory services fees | **1459** | 614 | 830 |
| Listing fees | **512** | 609 | 448 |
| Directors fees – Company | **569** | 527 | 323 |
| Directors fees – Blanket | **56** | 51 | 43 |
| Employee costs | **5855** | 5462 | 4065 |
| Other office administration cost | **468** | 177 | 315 |
| Information Technology and Communication cost | **391** | 178 | 183 |
| Management liability insurance | **985** | 551 | 1032 |
| Travel costs | **689** | 216 | 117 |
|  | **11941** | 9091 | 7997 |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **12** | **Share-based payments** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.1** **Cash-settled share-based payments** 

The Group has expensed the following cash-settled share-based expense arrangements for the twelve months ended December 31:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Note** | **2022** | 2021 | 2020 |
| Restricted Share Units and cash-settled Performance Units | 12.1(a) | **609** | 515 | 1299 |
| Caledonia Mining South Africa employee incentive scheme | Caledonia Mining South Africa employee incentive scheme |  | (38) | 114 |
|  |  | **609** | 477 | 1413 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Restricted Share Units and cash-settled Performance Units** 

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

RSUs vest three years after grant date given that the service conditions of the relevant employees have been fulfilled. The value of the vested RSUs is the number of RSUs vested multiplied by the fair market value of the Company's shares, as specified by the OEICP, on the date of settlement.

PUs have a performance condition based on gold production and a performance period of one up to three years. The number of PUs that vest will be the relevant portion of the PUs granted multiplied by the performance multiplier, which will reflect the actual performance in terms of the performance conditions compared to expectations on the date of the award.

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

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

The fair value of the RSUs at the reporting date was based on the Black Scholes option valuation model less the fair value of the expected dividends during the vesting period multiplied by the performance multiplier expectation. The fair value of the PUs at the reporting date was based on the Black Scholes option valuation model. At the reporting date it was assumed that there is a 93%-100% probability that the performance conditions will be met and therefore a 93%-100% (2021: 93%-100%) average performance multiplier was used in calculating the estimated liability.

The liability as at December 31, 2022 amounted to $2,217 (December 31, 2021: $3,027). Included in the liability as at December 31, 2022 is an amount of $853 (2021: $692, 2020: $634) that was expensed and classified as production costs; refer to note 9. During the period PUs to the gross value of $2,272 vested and $1,028 were settled in cash and $1,244 issued in share capital ($804 net value) (2021: $420 settled in cash, 2020: $216 issued as share capital).

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **12** | **Share-based payments (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.1** **Cash-settled share-based payments (continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Restricted Share Units and Performance Units (continued)** 

The following assumptions were used in estimating the fair value of the cash-settled share-based payment liability on December 31:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | 2021 | 2021 |
|  | **RSUs** | **PUs** | RSUs | PUs |
| Risk free rate | **3.88%** | **3.88%** | 1.52% | 1.52% |
| Fair value (USD) | **12.52** | **12.42** | 12.06 | 11.63 |
| Share price (USD) | **12.40** | **12.42** | 11.71 | 11.71 |
| Performance multiplier percentage |  | **93-100%** |  | 93-100% |
| Volatility | **1.29** | **0.91** | 1.20 | 1.06 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Share units granted:** | **RSUs**  | **PUs**  | **RSUs**  | **PUs**  |
| Grant - January 11, 2019 |  | **95740** |  | 95740 |
| Grant - March 23, 2019 |  | **28287** |  | 28287 |
| Grant - June 8, 2019 |  | **14672** |  | 14672 |
| Grant - January 11, 2020 | **17585** | **114668** | 17585 | 114668 |
| Grant - March 31, 2020 |  | **1971** |  | 1971 |
| Grant - June 1, 2020 |  | **1740** |  | 1740 |
| Grant - September 9, 2020 |  | **1611** |  | 1611 |
| Grant - September 14, 2020 |  | **20686** |  | 20686 |
| Grant - October 5, 2020 |  | **514** |  | 514 |
| Grant - January 11, 2021 |  | **78875** |  | 78875 |
| Grant - April 1, 2021 |  | **770** |  | 770 |
| Grant - May 14, 2021 |  | **2389** |  | 2389 |
| Grant - June 1, 2021 |  | **1692** |  | 1692 |
| Grant - June 14, 2021 |  | **507** |  | 507 |
| Grant - August 13, 2021 |  | **2283** |  | 2283 |
| Grant - September 1, 2021 |  | **553** |  | 553 |
| Grant - September 6, 2021 |  | **531** |  | 531 |
| Grant - September 20, 2021 |  | **526** |  | 526 |
| Grant - October 1, 2021 |  | **2530** |  | 2530 |
| Grant - October 11, 2021 |  | **500** |  | 500 |
| Grant - November 12, 2021 |  | **1998** |  | 1998 |
| Grant - December 1, 2021 |  | **936** |  | 936 |
| Grant - January 11, 2022 |  | **96359** |  |  |
| Grant - January 12, 2022 |  | **825** |  |  |
| Grant - May 13, 2022 |  | **2040** |  |  |
| Grant - June 1, 2022 |  | **1297** |  |  |
| Grant - July 1, 2022 |  | **2375** |  |  |
| Grant - October 1, 2022 |  | **2024** |  |  |
| RSU dividends reinvested | **1980** |  | 1066 |  |
| Settlements/terminations |  | **(254491)** |  | (30600) |
| Total awards | **19565** | **224408** | 18651 | 343379 |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **12** | **Share-based payments (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.2** **Equity-settled share-based payments** 

The Group has expensed the following equity-settled share-based expense arrangements for the twelve months ended December 31:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Note** | **2022** | **2022** | 2021 | 2020 |
| EPUs | 12.2(a) |  | **417** |  |  |
| Share option programs | 12.2(b) |  | **67** |  |  |
|  |  |  | **484** |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **EPUs** 

EPUs have a performance multiplier calculated on gold production, average normalised controllable cost per ounce of producing gold and a performance period of three years. The number of EPUs that vest as shares will be the EPUs granted multiplied by the performance multiplier percentage.

EPUs do not have rights to dividends.

The shares issued are subject to a minimum holding period of until at least the first anniversary of the EPUs vesting date, thus one year.

The fair value of the EPUs at the grant date was based on the Black Scholes valuation model less the fair value of the expected dividends during the vesting period multiplied by the performance multiplier percentage. At the reporting date it was assumed that there is a 100% probability that the performance conditions will be met and therefore a 100% performance multiplier was used in calculating the equity. The equity-settled share-based expense for EPUs as at December 31, 2022 amounted to $417 (2021: $Nil, 2020: $Nil).

The following assumptions were used in estimating the fair value of the equity-settled share-based payment liability on:

---

| | |
|:---|:---|
| Grant date | January 24, 2022 |
| Number of units – at granted and reporting date | 130380 |
| Share price (USD) – at grant date | 11.50 |
| Fair value (USD) – at grant date | 10.15 |
| Performance multiplier percentage at December 31, 2022 | 100% |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **12** | **Share-based payments (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.2** **Equity-settled share-based payments (continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Share option programs** 

The maximum term of the options under the OEICP is ten years. Equity-settled share-based payments under the OEICP will be settled by physical delivery of shares. Under the OEICP the aggregate number of shares that may be issued pursuant to the grant of options, or under any other share compensation arrangements of the Company, will not exceed 10% of the aggregate issued and outstanding shares issued of the Company. At December 31, 2022 the Company has 20,000 options outstanding granted to the employees of 3PPB Plc (providing US investor relations services to Caledonia), P Chidley and P Durham in equal units each.

The fair value of share-based payments noted above was estimated using the Black-Scholes valuation model as the fair value of the services could not be estimated reliably. Service and non-market performance conditions attached to the arrangements were not taken into account in measuring fair value. The following assumptions were used in determining the fair value of the options on December 31, 2022:

---

| | | |
|:---|:---|:---|
| Options granted | 10000 | 10000 |
| Grant date | February 27, 2018 | September 30, 2022 |
| Expiry date | August 25, 2024 | September 30, 2029 |
| Period option may be exercised from | February 27, 2018 | September 30, 2025 |
| Holding period on shares issued |  | First anniversary from issue date |
| Stock exchange | Toronto Stock Exchange | New York Stock Exchange |
| Exercise price | CAD 9.30 | USD 9.49 |
| Share price at grant date | CAD 9.30 | USD 9.82 |
| Risk-free interest rate | 2.86% | 4% |
| Expected stock price volatility (based on historical volatility) | 32% | 102% |
| Expected option life in years | 3 | 3 |

---

The exercise price for the options granted on February 27, 2018 was determined as the prevailing Toronto Stock Exchange share price on the day of the grant. Expected volatility has been based on an evaluation of the historical volatility of the Company's share price. The expected term has been based on historical experience.

The equity-settled share-based expense relating to the grants amounted to $67 (2021: $Nil, 2020: $Nil).

---

| | |
|:---|:---|
| **13** | **Net foreign exchange gain** |

---

On October 1, 2018 the RBZ issued a directive to Zimbabwean banks to separate foreign currency from RTGS$ in the accounts held by their clients and pegged the RTGS$ at 1:1 to the US Dollar. On February 20, 2019 the RBZ issued a further monetary policy statement, which allowed inter-bank trading between RTGS$ and foreign currency. The interbank rate was introduced at 2.5 RTGS$ to 1 US Dollar and traded at 684.33 RTGS$ to 1 US Dollar as at December 31, 2022 (December 31, 2021: 108.67 RTGS$, December 31, 2020: 81.79 RTGS$). On June 24, 2019 the Government issued S.I. 142 which stated, "Zimbabwe dollar ("RTGS$") to be the sole currency for legal tender purposes for any transactions in Zimbabwe". Throughout these announcements and to the date of issue of these financial statements the US dollar has remained the primary currency in which the Group's Zimbabwean entities operate and the functional currency of these entities.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **13** | **Net foreign exchange gain (continued)** |

---

Previously there was uncertainty as to what currency would be used to settle amounts owed to the Zimbabwe Government. The announcement of S.I. 142 clarified the Zimbabwean Government's intentions that these liabilities were always denominated in RTGS$ and that RTGS$ would be the currency in which they would be settled. The devaluation of the deferred tax liabilities contributed the largest portion of the foreign exchange gain set out below.

Further, the RBZ issued a directive to Zimbabwean banks to separate foreign currency ("Foreign currency") and RTGS$ for bank accounts held by clients on October 1, 2018. Subsequent to the directive, the RBZ announced that 30% of Blanket Mine's gold proceeds will be received in foreign currency (i.e., US Dollars) and the remainder received as RTGS$. From November 12, 2018 the RBZ increased the foreign currency allocation from 30% to 55%, with the remainder received as RTGS$. The RBZ increased the foreign currency allocation with effect from May 26, 2020 from 55% to 70% and decreased the foreign currency allocation with effect from January 8, 2021 from 70% to 60% with the remainder received as RTGS$.

In June 2021 the RBZ announced that companies that are listed on the Victoria Falls Stock Exchange ("VFEX") will receive 100% of the revenue arising from incremental production in US Dollars. Blanket has subsequently received confirmation that the "baseline" level of production for the purposes of calculating incremental production is 148.38 Kg per month (approximately 57,000 ounces per annum). The payment of the increased US Dollars proceeds for incremental production was applied from July 1, 2021. In December 2021, Caledonia obtained a secondary listing on the VFEX and Blanket has received all amounts due in terms of this revised policy up to the date of approval of these financial statements. The CMCL listing on the VFEX enabled Blanket to realise 72.7% of its total revenue in US Dollars and the balance in RTGS$ during 2022. Effective from February 1, 2023 the RBZ cancelled the incremental export incentive and increased the standard export retention threshold from 60% to 75%. The allocation percentages remained in effect up to the date of approval of these financial statements.

The Company participated in the foreign currency auction introduced by the Zimbabwean Government to exchange RTGS$ for US Dollars up to June 15, 2021. The incremental credit export incentive scheme has been discontinued effective February 1, 2023.

The table below illustrates the effect the weakening of the RTGS$ and other foreign currencies had on the consolidated statement of profit or loss and other comprehensive income.

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | 2021 | 2020 |
| Unrealised foreign exchange gain | **12736** | 2755 | 8367 |
| Realised foreign exchange loss | **(8325)** | (1571) | (4062) |
| Net foreign exchange gain | **4411** | 1184 | 4305 |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **14** | **Derivative financial instruments** |

---

The fair value of derivative financial instruments not traded in an active market is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where available. The company did not apply hedge accounting to the derivative financial instruments and all fair value losses were recorded in the consolidated statements of profit or loss and other comprehensive income. Transaction costs are recognised in profit or loss as incurred.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Net derivative financial instrument expenses** |  | **2022** | 2021 | 2020 |
| Put options | 14.1(a) | **38** |  |  |
| Gold loan | 14.2(a) | **(228)** | 21 |  |
| Call options (December 13, 2021) | 14.2(a) | **(240)** |  |  |
| Cap and collar options and Call options | 14.2(b) | **832** | 114 |  |
| Call options transaction costs (March 9, 2022) | 14.2(b) | **796** |  |  |
| Gold exchange-traded fund ("Gold ETF") | Gold exchange-traded fund ("Gold ETF") |  | 105 | 164 |
| Gold hedge | Gold hedge |  |  | 102 |
|  |  | **1198** | 240 | 266 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Cash flows arising from investing activities** |  | **2022** | **2022** | 2021 | 2020 |
| Acquisition of Put options | 14.1(a) |  | **478** |  |  |
|  |  |  | **478** |  |  |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Cash flows arising from financing activities** |  | **2022** | 2021 | 2020 |
| Gold loan (repayment) proceeds | 14.2(a) | **(3698)** | 2752 |  |
| Call options (December 13, 2021) proceeds | 14.2(a) |  | 208 |  |
| Call options (March 9, 2022) acquisition | 14.2(b) | **(176)** |  |  |
| Call options (March 9, 2022) proceeds | 14.2(b) | **416** |  |  |
| Gold ETF proceeds (acquisition) | Gold ETF proceeds (acquisition) |  | 1066 | (1058) |
|  |  | **(3458)** | 4026 | (1058) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.1** **Derivative financial assets** 

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | **2022** | 2021 |
| Put options |  | **440** |  |
|  |  | **440** |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Put options** 

On December 22, 2022 the Company purchased put options from Auramet to hedge 16,672 ounces of gold from February 2023 to May 2023 at a strike price of $1,750. These options were purchased to protect the Company against gold prices below $1,750 for the quantity of ounces hedged. The Put options were classified as level 1 in the fair value hierarchy.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **14** | **Derivative financial instruments (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.2** **Derivative financial liabilities** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  | **2022** | 2021 | 2021 |
| Gold loan | 14.2(a) |  |  | 2866 |
| Call options (December 13, 2021) | 14.2(a) |  |  | 229 |
| Cap and collar options and Call options | 14.2(b) |  |  |  |
|  |  |  |  | 3095 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Gold loan and Call options** 

On December 13, 2021 the Company entered into two separate gold loan and option agreements with Auramet International LLC ("Auramet").

In terms of the agreements the Group:

● received $3 million less transaction costs from Auramet at inception of the Gold loan agreement;

● is required to make two deliveries of 925 ounces each on May 31, 2022 and June 30, 2022 in repayment of the Gold loan or pay the equivalent in cash; and

● granted Call options on 6,000 ounces to Auramet with a strike price of $2,000 per ounce, expiring monthly in equal monthly tranches from June 30, 2022 to November 30, 2022.

Accounting for the Gold loan and the Call options transactions:

● At inception the fair value of the Gold loan was calculated at the amount received less the fair value of the Call options.

● As at March 31, 2022 the fair value of the gold loan was calculated by discounting the fair value of the gold deliveries at a forward rate of $1,833 due by a market related discount rate.

● At inception and at March 31, 2022 the Call options were valued at the quoted prices available from the CME Group Inc. at each respective date.

● Differences in the fair values were accounted for as Fair value losses on derivative financial instruments in the consolidated statement of profit or loss and other comprehensive income.

● The Call options were classified as level 1 in the fair value hierarchy and the Gold loan as level 2.

● Derivative liabilities are not designated as hedging instruments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Gold loan and Call options (continued)** 

Proceeds received under the Gold loan and Call options agreements were allocated as follows:

---

| | |
|:---|:---|
| **December 13, 2021** |  |
| Net proceeds received | 2960.0 |
| Fair value of Call options | 208.0 |
| Fair value of Gold loan | 2752.0 |

---

The Gold loan was settled in full on June 30, 2022. The Call options expired on October 31, 2022 and November 30, 2022.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **14** | **Derivative financial instruments (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.2** **Derivative financial liabilities (continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Cap and collar options and Call options** 

On February 17, 2022 the Company entered into a zero cost contract to hedge 20,000 ounces of gold over a period of 5 months from March to July 2022. The hedging contract had a cap of $1,940 and a collar of $1,825 over 4,000 ounces of gold per month that expired at the end of each month over the 5-month period.

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

In April, 2022 Auramet and the Company each purchased matching quantities of Call options at a net settlement cost to the Company of $176 over 2,400 ounces of gold per month at strike prices of $1,886 and $1,959.50 respectively. These options were purchased to hedge against a short term increase in the gold price for the last week of April 2022. At year end these options expired.

---

| | |
|:---|:---|
| **15** | **Finance income and finance cost** |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | 2021 | 2020 |
| Finance income received – Bank | **17** | 14 | 62 |
| Finance cost – Term loan |  | 56 | 386 |
| Finance cost – Capitalised to property, plant and equipment (note 17) |  | (17) | (53) |
| Unwinding of rehabilitation provision (note 28) | **132** |  | 2 |
| Finance cost – Leases (note 19) | **31** | 24 | 15 |
| Finance cost – Overdraft | **192** | 86 | 17 |
| ZESA interest <sup>\*</sup> |  | 226 |  |
| Finance cost – Loan notes payable (note 30) | **302** |  |  |
|  | **657** | 375 | 367 |

---

<sup>\*</sup> During the period from January 2021 to March 2021 it was unclear in what currency the monthly payments to the Zimbabwe Electricity Supply Authority ("ZESA") had to be made. In April 2021 Blanket was advised that the payments had to be paid on a 60/40 basis USD/RTGS$. Interest was charged on the outstanding amounts to ZESA during the period January 2021 to March 2021 when payments were withheld.

---

| | | | |
|:---|:---|:---|:---|
| Cash – Finance income | **17** | 14 | 62 |
| Cash – Finance cost | **(192)** | (388) | (405) |
| Non-cash – Finance cost | **(465)** | 13 | 38 |
|  | **657** | 375 | 367 |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **16** | **Tax expense** |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | 2021 | 2020 |
| **Tax recognised in profit or loss** |  |  |  |
| *Current tax* | **9932** | 9051 | 9492 |
| Income tax - current year | **8707** | 8769 | 8969 |
| Income tax - change in tax estimates | **(46** | (168) | (54) |
| Withholding tax - current year | **1271** | 450 | 577 |
| *Deferred tax expense* | **6838** | 5806 | 5681 |
| Origination and reversal of temporary differences | **6838** | 5806 | 5681 |
| Tax expense – recognised in profit or loss | **16770** | 14857 | 15173 |
| *Tax recognised in other comprehensive income* | | | |
| Income tax - current year | **-** |  |  |
| **Tax expense** | **16770** | 14857 | 15173 |

---

**Unrecognised deferred tax assets**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | 2021 | 2021 | 2020 | 2020 |
| Caledonia Holdings Zimbabwe (Private) Limited |  | **1,800** |  | 1800 |  | 593 |
| Greenstone Management Services Holdings Limited |  | **691** |  | 516 |  | 376 |
| Tax losses carried forward |  | **2,491** |  | 2316 |  | 969 |

---

Taxable losses do not expire for the entities incurring taxable losses within the Group, unless the entities cease trading. Income tax losses carried forward relate to Caledonia Holdings Zimbabwe (Private) Limited and Capital losses relate to Greenstone Management Services Holdings Limited (UK). Deferred tax assets have not been recognised in these entities as future taxable income is not deemed probable to utilise these losses against.

---

| | | | |
|:---|:---|:---|:---|
| **Tax paid** | **2022** | 2021 | 2020 |
| Net income tax payable at January 1 | **(1461)** | (419) | (163) |
| Current tax expense | **(9932)** | (9051) | (9492) |
| Foreign currency movement | **3244** | 583 | 2580 |
| Tax paid | **6866** | 7426 | 6656 |
| Net income tax payable at December 31 | **(1284)** | (1461) | (419) |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **16** | **Tax expense (continued)** |

---

---

| | | | |
|:---|:---|:---|:---|
| **Reconciliation of tax rate** | **2022** | 2021 | 2020 |
| Profit for the year | **22866** | 23142 | 25257 |
| Total tax expense | **16770** | 14857 | 15173 |
| Profit before tax | **39636** | 37999 | 40430 |
| Income tax at Company's domestic tax rate <sup>(1)</sup> | **-** |  |  |
| Tax rate blended in foreign jurisdictions <sup>(2)</sup> | **12600** | 11847 | 12405 |
| Effect of income tax calculated in RTGS$ as required by PN26 <sup>(3)</sup> | **713** | 590 | 2004 |
| Management fee – withholding tax on deemed dividend portion | **247** | 342 | 209 |
| Management fee – non-deductible deemed dividend | **735** | 611 | 570 |
| Management fee – withholding tax - current year | **174** | 148 | 123 |
| Withholding tax on intercompany dividends | **850** |  | 245 |
| Non-deductible expenditure |  |  |  |
| - CSR donations | **269** | 311 | 107 |
| - Other non-deductible expenditure | **656** | 30 | 57 |
| - IMTT <sup>(4)</sup> | **398** | (200) | 120 |
| Credit export incentive income exemption | **-** |  | (598) |
| Change in income tax rate <sup>(5)</sup>  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(8)** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**-** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(287) |
| Change in tax estimates |  |  |  |
| - Zimbabwean income tax | **-** | (166) |  |
| - South African income tax | **(38)** | (2) | (54) |
| Change in unrecognised deferred tax losses | **174** | 1346 | 272 |
| **Tax expense - recognised in profit or loss** | **16770** | 14857 | 15173 |

---

<sup>(1)</sup> The tax rate in Jersey, Channel Islands is 0% (2021: 0%, 2020: 0%).

<sup>(2)</sup> The effective tax rate of 35.36% (2021: 39.10%) exceeds the statutory tax rates of subsidiaries of the Company, as certain expenditures are incurred by the Company that is not tax-deductible against taxable income in Zimbabwe and South Africa, where the enacted tax rates are 24.72% (2021: 24.72%, 2020: 25.75%) and 28.00% (2021: 28.00%, 2020: 28.00%) respectively. Further, Zimbabwean legislation requires the Blanket income taxation calculation to be performed in RTGS$ whereas the functional currency in which the profit before tax is calculated in these consolidated financial statements is in US Dollar; the requirement is further described in point 3 below.

<sup>(3)</sup> In 2019 ZIMRA issued PN26 that was affected retrospectively from February 22, 2019. The public notice provided clarity on Section 4 (a) of the Finance Act [Chapter 23.04] of Zimbabwe, which requires a company earning taxable income to pay tax in the same or other specified currency in which taxable income and revenue is earned. PN 26 clarifies that the calculation of taxable income be performed in RTGS$ and that the payment of the tax be in the ratio of the currency that the taxable income and revenue is earned. The reconciling item reconciles the profit before tax calculated using US Dollars as the functional currency of the Zimbabwean entities to taxable income calculated in RTGS$.

<sup>(4)</sup> The presidential announcement made on May 7, 2022 to increase the IMTT charges on all domestic foreign currency transfers from 2% to 4%.

<sup>(5)</sup> The South African Government announced in the 2021 National Budget Statement that the income tax rate will be reduced from 28.00% to 27.00% and will take effect for the years of assessment ending on March 31, 2023. This resulted in a change in estimate on the deferred tax asset calculation.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **16** | **Tax expense (continued)** |

---

**Recognised deferred tax assets and liabilities**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Assets** | **Assets** | **Liabilities** | **Liabilities** | **Net** | **Net** |
|  | **2022** | 2021 | **2022** | 2021 | **2022** | 2021 |
| Property, plant and equipment | **-** |  | **(6323)** | (9328) | **(6323)** | (9328) |
| Exploration and evaluation assets | **-** |  | **(2)** |  | **(2)** |  |
| Allowance for obsolete stock | **(163)** |  | **-** | (47) | **(163)** | (47) |
| Prepayments | **-** | 3 | **(5)** |  | **(5)** | 3 |
| Unrealised foreign exchange | **733** |  | **-** | (10) | **733** | (10) |
| Trade and other payables | **814** | 499 | **-** |  | **814** | 499 |
| Cash-settled share-based payments | **-** | 989 | **-** |  | **-** | 989 |
| Provisions | **25** |  | **-** |  | **25** |  |
| Other | **-** | 54 | **-** |  | **-** | 54 |
| Tax assets/ (liabilities) | **1409** | 1545 | **(6330)** | (9385) | **\*(4,921)** | \*(7840) |

---

<sup>\*</sup> The net deferred tax liability consists of a deferred tax asset of $202 (2021: $194) from the South African operation and a net deferred tax liability of $5,123 (2021: $8,034) due to the Blanket Mine operation. The amounts are in different tax jurisdictions and cannot be offset. The amounts are presented as part of Non-current assets and Non-current liabilities in the Statements of financial position. The deferred tax asset recognised is supported by evidence of probable future taxable income.

**Movement in recognised deferred tax assets and liabilities**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Balance January 1, 2022** | **Recognised in profit or loss** | **Foreign exchange movement** | **Balance December 31, 2022** |
| Property, plant and equipment | **(9328)** | **(8560)** | **11565** | **(6323)** |
| Exploration and evaluation assets | **(47)** | **10** | **35** | **(2)** |
| Allowance for obsolete stock | **3** | **(295)** | **129** | **(163)** |
| Prepayments | **(10)** | **4** | **1** | **(5)** |
| Unrealised foreign exchange | **499** | **1179** | **(945)** | **733** |
| Trade and other payables | **989** | **794** | **(969)** | **814** |
| Provisions | **54** | **30** | **(59)** | **25** |
| Tax (liabilities)/ assets | **(7840)** | **(6838)** | **9757** | **(4921)** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Balance January 1, 2021** | **Recognised in profit or loss** | **Foreign exchange movement** | **Balance December 31, 2021** |
| Property, plant and equipment | (5380) | (6439) | 2491 | (9328) |
| Exploration and evaluation assets | (29) | (31) | 13 | (47) |
| Allowance for obsolete stock | 13 | 3 | (13) | 3 |
| Prepayments | (3) | (8) | 1 | (10) |
| Unrealised foreign exchange | 530 | 344 | (375) | 499 |
| Trade and other payables | 639 | 235 | 115 | 989 |
| Cash-settled share-based payments | 8 | (8) |  |  |
| Provisions | 60 | 123 | (129) | 54 |
| Other | 15 | (25) | 10 |  |
| Tax (liabilities)/ assets | (4147) | (5806) | 2103 | (7840) |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **17** | **Property, plant and equipment** |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Cost** | **Land** <br> **and Buildings** | **Right of**<br> **use assets** | **Mine development, infrastructure and other** | **Assets under construction and decommissioning assets** | **Plant**<br> **and equipment** | **Furniture and**<br> **fittings** | **Motor vehicles** | **Solar**<br> **Plant<sup>&</sup>** | **Total** |
| Balance at January 1, 2021 | 11315 | 442 | 23983 | 84856 | 40644 | 1235 | 2995 | 392 | 165862 |
| Additions\* |  | 528 | 678 | 24851 | 3531 | 134 | 176 | 1581 | 31479 |
| Impairments<sup>@</sup> |  |  |  | (65) | (1565) |  |  |  | (1630) |
| Derecognised plant and equipment |  | (402) |  |  |  |  |  |  | (402) |
| Reallocations between asset classes <sup>#</sup> | 3120 |  | 49253 | (74166) | 21785 | 8 |  |  |  |
| Foreign exchange movement |  | (25) |  |  | (76) | (35) | (2) | (33) | (171) |
| Balance at December 31, 2021 | 14435 | 543 | 73914 | 35476 | 64319 | 1342 | 3169 | 1940 | 195138 |
| Balance at January 1, 2022 | **14435** | **543** | **73914** | **35476** | **64319** | **1342** | **3169** | **1940** | **195138** |
| Additions |  |  |  | **31711** | **3049** | **243** | **147** | **12198** | **47348** |
| Impairments<sup>@</sup> |  |  | **(8518)** |  | **(998)** |  |  |  | **(9516)** |
| Reallocations between asset classes | **759** |  | **15886** | **(20734)** | **4089** |  |  |  |  |
| Acquisition of Bilboes oxide assets (Tribute) |  |  | **872** |  |  |  |  |  | **872** |
| Foreign exchange movement |  | **(18)** |  |  | **26** | **(22)** | **(2)** |  | **(16)** |
| Balance at December 31, 2022 | **15194** | **525** | **82154** | **46453** | **70485** | **1563** | **3314** | **14138** | **233826** |

---

---

| | |
|:---|:---|
| <sup>\*</sup> | Included in additions is the change in estimate for the decommissioning asset of ($468) (2021: ($408)), refer to note 28. |
| <sup>@</sup> | Included in the 2022 impairments are development asset costs of $8,518 that predominantly relates to prospective areas above 750 meters at Blanket which are not included in the LoMP. Also included in the 2022 impairments are generator cost of $791 and loader bottom decks at a cost of $101, these assets were no longer in working conditions. Included in the 2021 impairments are gensets cost of $1,001 and guide ropes cost of $310 that were no longer in working condition. The carrying amount for these impaired assets were impaired to $Nil. |
| <sup>#</sup> | Included in the reallocation between asset classes is an amount of $18,509 for the Central Shaft that was reallocated from CWIP (Mine development, infrastructure and other) to Plant and equipment at the time of the commissioning of the Central Shaft. |
| <sup>&</sup> | The solar plant was fully commissioned on February 2, 2023 and the sale agreement between Caledonia Mining Corporation Plc and Caledonia Mining Services (Private) Limited was concluded for the sale of the solar plant. Depreciation on the solar plant started on February 2, 2023 and the power purchase agreement, between Caledonia Mining Services (Private) Limited and Blanket Mine, became effective. In December 2022, the Caledonia board approved a proposal for Caledonia Mining Services (PvT) Ltd (which owns the solar plant) to issue loan note instruments ("bonds") up to a value of $12,000. The decision was taken in order 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 post December 31, 2022 $4.5 million was issued to Zimbabwean registered commercial entities. |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **17** | **Property, plant and equipment (continued)** |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Accumulated depreciation and Impairment losses** | **Land and Buildings** | **Right of**<br> **use assets** | **Mine development, infrastructure and other** | **Assets under construction and decommissioning assets** | **Plant and equipment** | **Furniture and fittings** | **Motor vehicles** | **Solar Plant**  | **Total** |
| Balance at January 1, 2021 | 6233 | 213 | 6443 | 530 | 22685 | 849 | 2430 |  | 39383 |
| Depreciation for the year | 1102 | 115 | 2467 | 70 | 3953 | 136 | 203 |  | 8046 |
| Derecognition |  | (230) |  |  |  |  |  |  | (230) |
| Accumulated depreciation for impairments |  |  |  |  | (1133) |  |  |  | (1133) |
| Foreign exchange movement |  | (1) |  |  |  | (27) | (2) |  | (30) |
| Balance at December 31, 2021 | 7335 | 97 | 8910 | 600 | 25505 | 958 | 2631 |  | 46036 |
| Balance at January 1, 2022 | **7335** | **97** | **8910** | **600** | **25505** | **958** | **2631** |  | **46036** |
| Depreciation for the year | **1015** | **137** | **3990** | **93** | **4527** | **163** | **216** |  | **10141** |
| Accumulated depreciation for impairments |  |  | **(532)** |  | **(775)** |  |  |  | **(1307)** |
| Foreign exchange movement |  | **(4)** |  |  |  | **(21)** | **(2)** |  | **(27)** |
| Balance at December 31, 2022 | **8350** | **230** | **12368** | **693** | **29257** | **1100** | **2845** |  | **54843** |
| **Carrying amounts** |  |  |  |  |  |  |  |  |  |
| At December 31, 2021 | 7100 | 446 | 65004 | 34876 | 38814 | 384 | 538 | 1940 | 149102 |
| At December 31, 2022 | **6844** | **295** | **69786** | **45760** | **41228** | **463** | **469** | **14138** | **178983** |

---

<sup>\*</sup> Accumulated depreciation and depreciation under Assets under construction and decommissioning assets include depreciation on decommissioning assets.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **17** | **Property, plant and equipment (continued)** |

---

**Economic recovery**

Items of property, plant and equipment are depreciated over the LoMP, which includes planned production from inferred resources. These inferred resources are included in the calculation when the economic recovery thereof is demonstrated by the achieved recovered grade relative to the mine's pay limit for the period 2006 to 2022. The cut-off grade is 2.10 g/t (2021: 2.10 g/t) while the recovered grade has ranged from 3.38 g/t to 3.36 g/t over the period. All-in-sustaining-cost<sup>#</sup> has remained consistently below the gold price received over this period resulting in economic recovery of the inferred resources.

<sup>#</sup> All-in sustaining cost ("AISC") per ounce is calculated as the on-mine cost per ounce to produce gold (which includes production costs before intercompany eliminations and exploration costs) plus royalty paid, additional costs incurred outside the mine (i.e. at offices in Harare, Johannesburg, London and Jersey), costs associated with maintaining the operating infrastructure and resource base that are required to maintain production at the current levels (sustaining capital investment), the share-based expense arising from the LTIP less silver by-product revenue and the export credit incentive.

**Non-cash items excluded from acquisition of Property, plant and equipment:**

---

| | | |
|:---|:---|:---|
|  | **2022** | 2021 |
| Net Property, plant and equipment included in Prepayments | **(4445)** | 893 |
| Net Property, plant and equipment included in Trade and other payables | **(1876)** | 50 |
| Bilboes oxide project payable (note 29) | **(872)** |  |
| Change in estimate - adjustment capitalised in Property, plant and equipment (note 28) | **468** | 408 |
| Acquisition - Maligreen included in Provisions (note 28) | **-** | (135) |
| Additions to right of use assets (note 19) | **-** | (528) |
| Derecognition of right of use assets (note 19) | **-** | 172 |
| Finance cost – Capitalised to property, plant and equipment (note 15) | **-** | (17) |
| Total non-cash items excluded from acquisition of Property, plant and equipment | **(6725)** | 843 |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **18** | **Exploration and evaluation assets** |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Motapa** | **Maligreen** | **Connemara North** | **Glen Hume** | **GG** | **Sabiwa** | **Abercorn** | **Valentine** | **Total** |
| Balance at January 1, 2021 |  |  | 300 | 2661 | 3523 | 284 |  |  | 6768 |
| Acquisition costs: |  |  |  |  |  |  |  |  |  |
| - Mining claims acquired |  | 4000 |  |  |  |  |  |  | 4000 |
| Decommissioning asset acquired |  | 135 |  |  |  |  |  |  | 135 |
| Exploration costs: |  |  |  |  |  |  |  |  |  |
| - Consumables and drilling |  | 14 | 71 | 1074 | 16 |  | 12 | 31 | 1218 |
| - Contractor |  |  | 51 | 42 |  |  |  | 24 | 117 |
| - Labour |  | 47 | 41 | 60 | 46 |  | 4 | 10 | 208 |
| - Power |  |  |  |  | 33 | 6 |  |  | 39 |
| Impairment \* |  |  |  | (3837) |  |  |  |  | (3837) |
| Balance at December 31, 2021 |  | 4196 | 463 |  | 3618 | 290 | 16 | 65 | 8648 |
| Balance at January 1, 2022 |  | **4196** | **463** |  | **3618** | **290** | **16** | **65** | **8648** |
| Acquisition costs: |  |  |  |  |  |  |  |  |  |
| - Mining claims acquired | **7844** |  |  |  |  |  |  |  | **7844** |
| Exploration costs: |  |  |  |  |  |  |  |  |  |
| - Consumables and drilling |  | **1170** |  |  | **36** |  |  |  | **1206** |
| - Contractor |  |  | **4** |  |  |  |  |  | **4** |
| - Labour |  | **260** |  |  | **37** |  | **11** |  | **308** |
| - Power |  |  |  |  | **32** | **4** |  |  | **36** |
| Impairment \* |  |  | **(467)** |  |  |  |  |  | **(467)** |
| Balance at December 31, 2022 | **7844** | **5626** |  |  | **3723** | **294** | **27** | **65** | **17579** |

---

<sup>\*</sup> Caledonia has completed sufficient work to establish that the potential orebody at the Glen Hume and Connemara North properties will not meet Caledonia's requirements in terms of size, grade and width. Accordingly, Caledonia will not exercise the option to acquire these properties.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **18** | **Exploration and evaluation assets (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Motapa** 

On November 1, 2022 Caledonia entered into a Share Purchase Agreement with Bulawayo Mining Company Limited ("Bulawayo Mining") to acquire all the shares of Motapa Mining Company UK Limited ("Motapa"), along with its wholly owned subsidiary Arraskar Investments (Private) Limited ("Arraskar").

Caledonia considers Motapa to be highly prospective and strategically important to its growth ambitions in Zimbabwe in terms of both location and scale. Motapa is a large exploration property which is contiguous to the Bilboes gold project.

The Motapa asset has been mined throughout most of the second half of the 20th century, Caledonia understands that during this period the region produced as much as 300,000oz of gold. Whilst none of the mining infrastructure remains, the evidence of historical mining will provide guidance to our exploration team in best understanding the prospectivity of the region.

The acquisition was accounted for as an asset acquisition as the net assets acquired do not meet the definition of a business. The purchase price of the net assets acquired was allocated to Exploration and evaluation assets based on management's estimation of the fair value at acquisition.

The initial purchase price of $1 million was paid on November 1, 2022. Stamp duties of $41 were paid on November 9, 2022. There were no liabilities assumed with the acquisition of Motapa and Arraskar. The remainder of the purchase price is to be settled by way of loan notes (refer to note 30).

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Maligreen** 

On November 3, 2021 the mining claims had been transferred to Caledonia over the Maligreen project ("Maligreen"), a property situated in the Gweru mining district in the Zimbabwe Midlands, for a total cash consideration of US$4 million. The property is estimated to contain a NI 43-101 compliant inferred mineral resource of approximately 940,000 ounces of gold.

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

● An estimated 60,000 meters of diamond core and percussion drilling

● 3.5 tonnes of bulk metallurgical test work

● Aeromagnetic and ground geophysical surveys

The total land area of Maligreen is approximately 550 hectares comprising two historic open pit mining operations which produced approximately 20,000 oz of gold mined from oxides between 2000 and 2002 after which the operation was closed.

On November 7, 2022 the Company published an announcement and an updated technical report on SEDAR updating the estimated mineral resources at Maligreen. The report has an effective date of September 30, 2022 and estimates measured and indicated mineral resources of 8.03 million tonnes at a grade of 1.71g/t containing approximately 442,000 ounces of gold and inferred mineral resources of 6.17 million tonnes at a grade of 2.12g/t containing approximately 420,000 ounces of gold. The upgrade to the mineral resources at Maligreen improves the geological confidence of approximately half the mineral resources from inferred to measured and indicated mineral resources from the previous mineral resources statement. .

Since Caledonia acquired the Maligreen claims in November 2021 it has been focused on reviewing the geological work conducted at the property with a view to upgrading the Mineral Resources in 2022.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **18** | **Exploration and evaluation assets (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** **Connemara North** 

On December 16, 2020 the Company concluded an option agreement ("Connemara North option") with the representatives of Connemara North to purchase the claims over the Connemara North mining properties situated in Gweru, Zimbabwe. The exercise of the option was exercisable at the discretion of the Company until May 16, 2022.

An amount of $300 was paid for the Connemara North option.

The Connemara North option gave the Company the right to carry out legal due diligence and conduct drilling and/or other exploratory work over a period of 18 months from the conclusion date to understand the resource body.

After concluding drilling and exploration to the value of $0.5 million the Company decided not to exercise the option over the Connemara North option as the results of the exploration work indicated that the property does not meet Caledonia's strategic objectives. This gave rise to an impairment of $0.5 million. No further costs or impairments in respect of Connemara North option are anticipated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d)** **Glen Hume** 

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

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

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **19** | **Leases** |

---

**Leases as lessee**

The Group leases administrative offices. The leases, which the Group normally enters into, typically run for a period of 3 to 6 years, with an option to renew the lease after that date. The two leases for the administrative offices expire in 2024 and 2025.

Information about leases for which the Group is a lessee is presented below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i)** **Amounts recognised in the statement of financial position** 

**Right of use assets**

Right of use assets related to leased properties are presented as part of property, plant and equipment (refer note 17).

---

| | | |
|:---|:---|:---|
|  | **2022** | 2021 |
| Balance at January 1 | **446** | 229 |
| Depreciation | **(137)** | (115) |
| Additions to right of use assets | **-** | 528 |
| Derecognition of right of use assets | **-** | (172) |
| Foreign currency movement | **(14)** | (24) |
| Balance at December 31 | **295** | 446 |

---

**Lease liabilities**

---

| | | |
|:---|:---|:---|
|  | **2022** | 2021 |
| Balance at January 1 | **465** | 239 |
| Additions to lease liability | **-** | 527 |
| Finance cost | **31** | 24 |
| Lease payments | **(150)** | (129) |
| Foreign currency movement | **(33)** | (23) |
| Derecognition of lease liability | **-** | (173) |
| Balance at December 31 | **313** | 465 |

---

**ii)** **Amounts recognised in profit or loss**

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | 2021 | 2020 |
| Finance cost on lease liabilities (note 15) | **31** | 24 | 15 |
| Unrealised foreign exchange gain (loss) | **19** | 1 | (2) |
| Depreciation (note 17) | **137** | 115 | 99 |
|  | **187** | 140 | 112 |

---

**iii)** **Amounts recognised in statement of cash flows**

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | 2021 | 2020 |
| Total cash outflow for leases - total payment | **150** | 129 | 118 |
| Total cash outflow for leases - finance cost | **(31)** | (24) | (15) |
| Total cash outflow for leases - principal | **119** | 105 | 103 |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **19** | **Leases (continued)** |

---

**iv)** **Maturity of lease liabilities**

The maturity of lease liabilities are as follows as at December 31:

---

| | | |
|:---|:---|:---|
|  | **2022** | 2021 |
| Less than one year | **152** | 158 |
| One to two years | **150** | 165 |
| Two to three years | **40** | 163 |
| Three to four years |  | 46 |
| Total lease payments | **342** | 532 |
| Finance cost | **(29)** | (67) |
| Present value of lease liabilities | **313** | 465 |

---

---

| | |
|:---|:---|
| **20** | **Inventories** |

---

---

| | | |
|:---|:---|:---|
|  | **2022** | 2021 |
| Consumable stores | **19155** | 21516 |
| Gold in progress and Ore stock-pile | **689** | 243 |
| Provision for obsolete stock | **(1510)** | (947) |
|  | **18334** | 20812 |

---

Write-down of inventories amounted to $563 (2021: $Nil) largely on decommissioned drill rig and related spares. These were recognised as expenses and included as Production costs in the statement of profit or loss and other comprehensive income.

---

| | |
|:---|:---|
| **21** | **Prepayments** |

---

---

| | | |
|:---|:---|:---|
|  | **2022** | 2021 |
| Caledonia Mining South Africa (Proprietary) Limited ("CMSA") suppliers | **254** | 1552 |
| Blanket Mine third party suppliers | **1494** | 1766 |
| Bilboes third party suppliers (note 5) | **802** |  |
| Solar prepayments | **104** | 2951 |
| Bilboes pre-effective date costs (note 5) | **877** |  |
| Other prepayments | **162** | 661 |
|  | **3693** | 6930 |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **22** | **Trade and other receivables** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | 2021 | 2021 |
| Bullion sales receivable |  | **7,383** |  | 4528 |
| VAT receivables |  | **1,001** |  | 3162 |
| Solar - VAT and duty receivables |  | **720** |  |  |
| Deposits for stores, equipment and other receivables |  | **81** |  | 248 |
|  |  | **9,185** |  | 7938 |

---

The carrying value of trade receivables is considered a reasonable approximation of fair value and are short term in nature, settled within 14 days of delivery. No provision for expected credit losses was recognised in the current or prior year. Up to the date of approval of these financial statements all scheduled payments have been received.

---

| | |
|:---|:---|
| **23** | **Cash and cash equivalents** |

---

---

| | | |
|:---|:---|:---|
|  | **2022** | 2021 |
| Bank balances | **4737** | 17152 |
| Restricted cash \* | **1998** |  |
| Cash and cash equivalents | **6735** | 17152 |
| Bank overdrafts used for cash management purposes | **(5239)** | (887) |
| Net cash and cash equivalents | **1496** | 16265 |

---

\* Cash of $998 (denominated in RTGS$) held by Blanket Mine was earmarked by Stanbic Bank Zimbabwe as a letter of credit in favour of CMSA. The letter of credit was issued by Stanbic Bank Zimbabwe on September 15, 2022 and settled on January 10, 2023. The cash on maturity will be transferred to CMSA's bank account, denominated in South African Rands. Caledonia retains at least $1 million as penalty sum, in a bank account for so long as amounts remain outstanding on the loan notes payable. Refer to notes 30 for more information.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *Overdraft facilities* | **Date drawn** | **Expiry** | **Repayment terms** | **Principal value** | **Interest rate** |
| Stanbic Bank - RTGS$ denomination | September 2021 | February 2024 | On demand | 300000000 | 210% |
| Stanbic Bank - USD denomination | December 2021 | February 2024 | On demand | 1000000 | 10% |
| CABS Bank of Zimbabwe - USD denomination | April 2022 | November 2023 | On demand | 2000000 | \*12.33% |
| Ecobank - USD denomination | November 2022 | October 2023 | On demand | 5000000 | 6.5% |

---

\* Interest charges on this facility is as a rate of the 3 month Secured Overnight Funding Rates ("SOFR") plus a margin of 7.75% per annum. The SOFR as at December 31, 2022 was 4.58%.

Subsequent to year end the Stanbic Bank Zimbabwe $1 million increased to $4 million and the Ecobank facility increased to $7 million both on the same terms as in the table above. Nedbank Zimbabwe extended an unsecured $7 million overdraft facility to Blanket in 2023. Before approval of these consolidated financial statements $4.5 million of bonds were issued.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **24** | **Share capital** |

---

**Authorised**

Unlimited number of ordinary shares of no par value.

Unlimited number of preference shares of no par value.

**Issued ordinary shares**

---

| | | |
|:---|:---|:---|
|  | **Number of fully paid shares**  | **Amount** |
| January 1, 2021 | 12118823 | 74696 |
| Shares issued: |  |  |
| - options exercised | 18000 | 165 |
| - equity raise<sup>\*</sup> | 619783 | 7806 |
| December 31, 2021 | 12756606 | 82667 |
| Shares issued: |  |  |
| - share-based payment - employees (note 12.1(a)) | **76520** | **804** |
| **December 31, 2022** | **12833126** | **83471** |

---

**<sup>\*</sup>** Gross proceeds of $7,834 with a transaction cost of $28 were raised by issuing depository receipts on the VFEX in December 2021, resulting in a net amount of $7,806.

---

| | |
|:---|:---|
| **25** | **Reserves** |

---

**Foreign currency translation reserve**

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations with functional currencies that differ from the presentation currency.

**Share-based payment reserve**

The share-based payment reserve comprises the fair value of equity instruments granted to employees, directors and service providers under share option plans (refer to note 12) and equity instruments issued to Blanket's indigenous shareholders under Blanket Mine's Indigenisation Transaction (refer note 6).

**Contributed surplus**

The contributed surplus reserve comprises the reduction in stated capital as approved by shareholders at the special general meeting on January 24, 2013 to be able to commence dividend payments.

**Reserves**

---

| | | |
|:---|:---|:---|
|  | **2022** | 2021 |
| Foreign currency translation reserve | **(9787)** | (9325) |
| Contributed surplus | **132591** | 132591 |
| Equity-settled share-based payment reserve | **14997** | 14513 |
| Total | **137801** | 137779 |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **26** | **Earnings per share** |

---

---

| | | | |
|:---|:---|:---|:---|
| **Weighted average number of shares** – **Basic earnings per share** | | | |
| *(in number of shares)* | **2022** | 2021 | 2020 |
| Issued shares at the beginning of year (note 24) | **12756606** | 12118823 | 10763041 |
| Weighted average shares issued | **74214** | 51462 | 940489 |
| Weighted average (basic) at December 31 | **12830820** | 12170285 | 11703530 |

---

---

| | | | |
|:---|:---|:---|:---|
| **Weighted average number of shares - Diluted earnings per share** | **Weighted average number of shares - Diluted earnings per share** |  |  |
| *(in number of shares)* | **2022** | 2021 | 2020 |
| Weighted average (basic) at December 31 | **12830820** | 12170285 | 11703530 |
| Effect of dilutive options | **6482** | 6933 | 13173 |
| Weighted average number of shares (diluted) at December 31 | **12837302** | 12177218 | 11716703 |

---

The average market value of the Company's shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the year during which the options were outstanding. Options of 13,518 (2021: 18,842, 2020: 14,827) were excluded from the dilutive earnings per share calculation as these options were anti-dilutive.

The quantity of options outstanding as at year end that were out of the money amounted to Nil (2021: Nil, 2020: Nil) options.

The calculation of total basic and diluted earnings per share for the year ended December 31, 2022 was based on the adjusted profit attributable to shareholders as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | 2021 | 2020 |
| Profit for the year attributable to owners of the Company (basic and diluted) | **17903** | 18405 | 20780 |
| Blanket Mine Employee Trust Adjustment | **(517)** | (326) | (485) |
| Profit attributable to ordinary shareholders (basic and diluted) | **17386** | 18079 | 20295 |
| **Basic earnings per share - $** | **1.36** | 1.49 | 1.73 |
| **Diluted earnings per share - $** | **1.35** | 1.48 | 1.73 |

---

Basic earnings are adjusted for the amounts that accrue to other equity holders of subsidiaries upon the full distribution of post-acquisition earnings to shareholders.

Diluted earnings are calculated on the basis that the unpaid ownership interests of Blanket Mine's indigenous shareholders are effectively treated as options whereby the weighted average fair value for the period of the Blanket Mine shares issued to the indigenous shareholders and which are subject to settlement of the loan accounts is compared to the balance of the loan accounts and any excess portion is regarded as dilutive. The difference between the number of Blanket Mine shares subject to the settlement of the loan accounts and the number of Blanket Mine shares that would have been issued at the average fair value, is treated as the issue of shares for no consideration and regarded as dilutive shares. The calculated dilution is taken into account with additional earnings attributable to the dilutive shares in Blanket Mine, if any. The interest of the NIEEF shareholding was anti-dilutive (i.e., the value of the options was less than the outstanding loan balance). Accordingly, there was no adjustment to fully diluted earnings attributable to shareholders.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **27** | **Non-controlling interests** |

---

Blanket Mine's (incorporated in Zimbabwe) NCI share recognised at an effective share and voting rights of 13.2% (2021: 13.2%, 2020: 13.2%)

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | 2021 | 2020 |
| Current assets | **30397** | 33634 | 24864 |
| Non-current assets | **172611** | 154003 | 133908 |
| Current liabilities | **(9583)** | (17261) | (7339) |
| Non-current liabilities | **(8062)** | (11535) | (8065) |
| Net assets of Blanket Mine (100%) | **185364** | 158841 | 143368 |
| Carrying amount of NCI of 13.2% (2021: 13.2%, 2020: 13.2%) | **22409** | 19260 | 16524 |
| Revenue | **142082** | 121329 | 100002 |
| Profit after tax | **38389** | 35911 | 33361 |
| Total comprehensive income of Blanket Mine (100%) | **38389** | 35911 | 33361 |
| Profit allocated to NCI of 13.2% (2021: 13.2%, 2020: 13.2%) | **4963** | 4737 | 4477 |
| Dividend allocated to NCI of 13.2% (2021: 13.2%, 2020: 13.2%) | **(1814)** | (2001) | (655) |
| Net cash inflow from operating activities | **50048** | 41489 | 36122 |
| Net cash outflow from investing activities | **(37798)** | (29850) | (26179) |
| Net cash outflow from financing activities | **(16506)** | (12817) | (9896) |
| Net cash (outflow) inflow | **(4256)** | (1178) | 47 |

---

---

| | |
|:---|:---|
| **28** | **Provisions** |

---

**Site restoration**

Site restoration relates to the estimated cost of closing down the mines and represents the site and environmental restoration costs, estimated to be paid throughout the period up until closure due to areas of environmental disturbance present at the reporting date as a result of mining activities. The costs of site restoration at Blanket Mine are discounted based on the estimated life of mine. Site restoration costs at Blanket Mine are capitalised to mineral properties on initial recognition and depreciated systematically over the estimated life of the mine.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **28** | **Provisions (continued)** |

---

---

| | | |
|:---|:---|:---|
| **Reconciliation of site restoration provision** | **2022** | 2021 |
| Balance January 1 | **3294** | 3567 |
| Unwinding of discount | **132** |  |
| Change in estimate - adjustment capitalised in Property, plant and equipment | **(468)** | (408) |
| Acquisition - Maligreen |  | 135 |
| Balance December 31 | **2958** | 3294 |
| Current |  |  |
| Non-current | **2958** | 3294 |

---

The discount rates currently applied in calculating the present value of the Blanket Mine provision is 4.14% (2021: 1.94%) sourced from the U.S. Department of Treasury, based on a risk-free rate and cash flows estimated at an average 2.40% U.S. inflation (2021: 2.26%). The gross rehabilitation costs, before discounting, amounted to $3,137 (2021: $3,087) for Blanket Mine as at December 31, 2022.

---

| | |
|:---|:---|
| **29** | **Trade and other payables** |

---

---

| | | |
|:---|:---|:---|
|  | **2022** | 2021 |
| Trade payables and accruals | **3502** | 2503 |
| Electricity accrual | **2386** | 888 |
| Audit fee | **284** | 260 |
| Dividends due | **1883** |  |
| Solar plant supplier accrual | **1852** |  |
| Bilboes oxide project payable (note 5)\* | **872** |  |
| Other payables | **651** | 749 |
| Financial liabilities | **11430** | 4400 |
| Production and management bonus accrual - Blanket Mine | **287** | 899 |
| Other employee benefits | **982** | 657 |
| Leave pay | **2462** | 2410 |
| Bonus provision | **1025** | 645 |
| Accruals | **1268** | 946 |
| Non-financial liabilities | **6024** | 5557 |
| Total | **17454** | 9957 |

---

\* On August 1, 2022, the purchase price to acquire the Bilboes oxide project represented the cost to repair the plant and equipment of the oxide project and restart the oxides mining process.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **30** | **Loan notes payable** |

---

On November 1, 2022 Caledonia, in connection with the Share Purchase Agreement, entered into a Loan notes Instrument agreement ("loan notes" or "notes") with Bulawayo Mining to acquire all the shares of Motapa, along with its wholly owned subsidiary Arraskar. The acquisition was assessed as an E&E asset acquisition. The purchased shares are with full title guarantee and free from all Encumbrances, together with all rights attached or accruing to them. The loan notes certificate was also issued by Caledonia on November 1, 2022.

The aggregate principal amount of the loan notes is limited to US$7.25 million. Interest on the loan notes is compounded monthly at an interest rate of 13% per annum. Interest shall be payable on the principal amount of the loan notes outstanding from time to time from the issue date of the loan notes until the date of redemption of the loan notes at the interest rate.

The loan notes will be payable on the following maturity dates:

● $5 million notes to be payable, March 31, 2023 and,

● in respect of the remaining $2.25 million notes to be issued, June 30, 2023 or,

● in each case, such later date as may be agreed, in writing, between the Caledonia and each of the noteholders.

Caledonia shall pay accrued interest in cash, in arrear to Bulawayo Mining on the relevant maturity date.

All notes repaid by Caledonia shall be automatically and immediately cancelled and shall not be reissued.

If Caledonia fails to pay Bulawayo Mining any principal amount or any interest due on the notes on the date on which such amount becomes due and payable, Caledonia shall pay default interest at a rate of 10% per annum on such overdue amount from the date of such failure up to the date of actual payment (after as well as before judgment), calculated and accruing on a daily basis for so long as the amount remains unpaid.

Caledonia shall retain at least $1 million as the penalty sum, in a bank account held in its name in Jersey for so long as any amounts remain outstanding on the notes. No default interest shall be payable on the penalty sum.

Greenstone Management Services Holdings Limited (UK) ("GMS UK"), Caledonia's subsidiary, shall guarantee Caledonia's obligations. GMS UK unconditionally and irrevocably guarantees to each of the noteholders from time to time that if, for any reason whatsoever, the aggregate outstanding principal amount of its notes (or any part of it) together with all outstanding accrued interest thereon is not paid in full by Caledonia on the due date it shall, on demand in writing by such noteholder, pay such sum as shall be equal to the amount in respect of which such default has been made, provided that GMS UK's maximum aggregate liability shall not exceed an amount equal to the aggregate outstanding principal amount of its notes in issue at any time and all outstanding accrued interest (including such penalty sum, if any) thereon due to such noteholder. Payment by GMS UK to any noteholder made in accordance with the above shall be deemed a valid payment for all purposes. GMS UK shall be liable under this guarantee as if it were a principal and independent debtor and accordingly it shall not have, as regards the loan notes, any of the rights or defences of a surety as against the noteholders.

According to management's best estimate, the value on initial recognition and subsequent measurement of the financial guarantee contract deemed to be not significant and zero. This is supported by management estimating the risk being very low for Caledonia not fulling to pay the notes due on the respective maturity dates.

The fair value of the loan notes payable at inception, November 1, 2022, was measured at $6,802. The effective interest rate on the loan notes were estimated to be 12.75% per annum. The loan notes were subsequently measured at amortised cost.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **30** | **Loan notes payable (continued)** |

---

A summary of the loan notes payable is as follows:

Fair value November 1, 2022 6,802 <br> Finance cost   <u>302</u>   <br> Balance December 31, 2022   <u>7,104</u>  

Refer to note 18 for more information on the exploration and evaluation asset acquired.

---

| | |
|:---|:---|
| **31** | **Cash flow information** |

---

Non-cash items and information presented separately on the Statements of cash flows statement:

---

| | | | |
|:---|:---|:---|:---|
|  | **2022** | 2021 | 2020 |
| Operating profit | **40276** | 38360 | 40735 |
| Adjustments for: |  |  |  |
| Impairment of property, plant and equipment (note 17) | **8209** | 497 |  |
| Impairment of exploration and evaluation assets (note 18) | **467** | 3837 | 2930 |
| Unrealised foreign exchange gains (note 13) | **(12736)** | (2754) | (8367) |
| Cash-settled share-based expense (note 12.1) | **609** | 477 | 1413 |
| Cash-settled share-based expense included in production costs (note 9) | **853** | 692 | 634 |
| Cash portion of cash-settled share-based expense (note 12.1) | **(1468)** | (420) | (1) |
| Equity-settled share-based expense (note 12.2) | **484** |  |  |
| Depreciation (note 17) | **10141** | 8046 | 4628 |
| Fair value loss on derivative instruments (note 14) | **401** | 240 | 266 |
| Write down of inventory (note 9) | **563** |  |  |
| Derecognition of property, plant and equipment |  | (38) | 182 |
| Expected credit losses on deferred consideration on the disposal of subsidiary |  | 761 |  |
| **Cash generated from operations before working capital changes** | **47799** | 49698 | 42420 |
| Inventories | **1915** | (4016) | (5707) |
| Prepayments | **(1375)** | (4272) | 816 |
| Trade and other receivables | **(1561)** | (4746) | 539 |
| Trade and other payables | **2879** | 2039 | (101) |
| **Cash generated from operations** | **49657** | 38703 | 37967 |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **32** | **Financial Instruments and risk management** |

---

The Group has exposure to the following risks from its use of financial instruments:

● Credit risk;

● Liquidity risk;

● Market risk

This note present information about the Group's exposure to each of the above risks and the Group's objectives, policies and processes for measuring and managing risk. Further quantitative disclosures are included throughout these consolidated financial statements. The Group is exposed in varying degrees to a variety of financial instrument related risks by virtue of its activities. The overall financial risk management program focuses on the preservation of capital and protecting current and future Group assets and cash flows by reducing exposure to risks posed by the uncertainties and volatilities of financial markets.

The Board of Directors has the responsibility to ensure that an adequate financial risk management policy is established and to approve the policy. The Group's Audit Committee oversees management's compliance with the Group's financial risk management policy.

Gold price hedges were entered into to manage the possible effect of gold price fluctuations. The derivative financial instrument was entered into by the Company for economic hedging purposes and not as a speculative investment. The fair value of the Group's financial instruments approximates their carrying value due to the short period to maturity.

The types of risk exposure and the way in which such exposures are managed are described below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Credit risk** 

**Exposure to credit risk**

Credit risk includes the risk of a financial loss to the Group if a gold sales customer fails to meet its contractual obligation.

The carrying amount of financial assets as disclosed in the statements of financial position and related notes represents the maximum credit exposure. The maximum exposure to credit risk for trade and other receivables at the reporting date by geographic region was:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Carrying amount** | **2022** | **2022** | 2021 | 2021 |
| Zimbabwe |  | **9,059** |  | 4753 |
| Jersey, Channel Islands |  |  |  |  |
| Other regions |  | **1** |  | 23 |
|  |  | **9,060** |  | 4776 |

---

Of the trade receivables balance at the end of the year, $7,383 (2021: $4,528) is due from Fidelity, the Group's largest customer. Apart from this, the Group does not have significant credit risk exposure to any single counterparty. The Group's credit risk over trade receivables is significantly reduced as Fidelity has never paid outside of their contractually agreed credit terms.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **32** | **Financial Instruments and risk management (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Liquidity risk** 

Liquidity risk is the risk that the Group does not have sufficient financial resources available to meet its obligations as they fall due. The Group manages its liquidity risk by ensuring sufficient cash availability to meet its likely cash requirements, after taking into account cash flows from operations and the Group's holdings of cash and cash equivalents. The Group believes that these sources will be sufficient to cover the anticipated cash requirements. Senior management is also actively involved in the reviewing and approving of planned expenditures by regularly monitoring cash flows from operations and anticipated investing and financing activities.

The following are the contractual maturities of financial liabilities, including contractual interest payments and excluding the impact of netting agreements.

**Non-derivative financial liabilities**

---

| | | | |
|:---|:---|:---|:---|
| December 31, 2022 | **Carrying amount** | **Total Contractual cashflow amount** | **12 months or less** |
| Trade and other payables | **11430** | **11430** | **11430** |
| Loan notes payable | **7104** | **7723** | **7723** |
| Lease liabilities | **313** | **342** | **152** |
|  | **18847** | **19195** | **19305** |

---

---

| | | | |
|:---|:---|:---|:---|
| December 31, 2021 | Carrying amount | Total Contractual cashflow amount | 12 months or less |
| Trade and other payables | 4400 | 4400 | 4400 |
| Lease liabilities | 465 | 532 | 158 |
|  | 4865 | 4932 | 4558 |

---

The Group regularly monitors its liquidity risk and evaluates the options available.

**Sensitivity analysis**

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

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **32** | **Financial Instruments and risk management (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Liquidity risk (continued)** 

**Sensitivity analysis (continued)**

An increase or decrease of 5% of the gold price would have the following equal or opposite effect on the derivative financial instruments on December 31:

*Consolidated statement of financial position:*

---

| | | |
|:---|:---|:---|
|  | **2022** | 2021 |
| Derivative financial liabilities - Gold loan |  |  |
| Increase by 5% of the gold price |  | 143 |
| Decrease by 5% of the gold price |  | (143) |
| Derivative financial liabilities - Call option |  |  |
| Increase by 5% of the gold price |  | 11 |
| Decrease by 5% of the gold price |  | (11) |
| Derivative financial assets - Put option |  |  |
| Increase by 5% of the gold price |  |  |
| Decrease by 5% of the gold price | **22** |  |

---

*Consolidated statement of profit or loss and other comprehensive income:*

---

| | | |
|:---|:---|:---|
| **Fair value loss on derivative financial instruments** | **2022** | 2021 |
| Derivative financial liabilities - Gold loan |  |  |
| Increase by 5% of the gold price |  | 143 |
| Decrease by 5% of the gold price |  | (143) |
| Derivative financial liabilities - Call option |  |  |
| Increase by 5% of the gold price |  | 11 |
| Decrease by 5% of the gold price |  | (11) |
| Derivative financial assets - Put option |  |  |
| Increase by 5% of the gold price |  |  |
| Decrease by 5% of the gold price | **22** |  |

---

The Group's revenues had full exposure to the gold price up to December 22, 2022 when the Gold put option agreement was concluded (refer note 14.1).

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **32** | **Financial Instruments and risk management (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** **Market risk** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(i)** **Currency risk** 

The Group is exposed to currency risk on inter-company sales and purchases that are denominated in a currency other than the respective functional currencies of Group entities. The Group does not use financial instruments to hedge its exposure to currency risk, except for the investment in a Gold ETF to avoid fluctuations in South African Rands. To reduce exposure to currency transaction risk, the Group regularly reviews the currency (i.e. RTGS$ or Foreign currency) in which it spends its cash to identify and avoid specific expenditures in currencies that experience inflationary pressures. The Group aims to maintain cash and cash equivalents in US Dollars to manage foreign exchange exposure.

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

**Sensitivity analysis**

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

---

| | | |
|:---|:---|:---|
|  | **2022**  | 2021 |
|  | **$'000** | $'000 |
|  | **Functional currency** | Functional currency |
|  | **ZAR** | ZAR |
| Cash and cash equivalents | **60** | 59 |
| Trade and other receivables | **-** |  |
| Trade and other payables | **-)** | -) |
| Overdraft | **-)** | -) |
|  | **60)** | 59 |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **32** | **Financial Instruments and risk management (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** **Market risk (continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(i)** **Currency risk (continued)** 

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

---

| | | |
|:---|:---|:---|
|  | **2022**  | 2021 |
|  | **$'000** | $'000 |
|  | **Functional currency** | Functional currency |
|  | **ZAR** | ZAR |
| Cash and cash equivalents | **3** | 3 |
| Trade and other receivables | **-** |  |
| Trade and other payables | **-)** | -) |
| Overdraft | **-)** | -) |
|  | **3)** | 3 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(ii)** **Interest rate risk** 

The Group's interest rate risk arises from Loans and borrowings, overdraft facility and cash held. The Loans and borrowings, overdraft facility and cash held have variable interest rates. Variable rates expose the Group to cash flow interest rate risk. The Group has not entered into interest rate swap agreements and mitigates the interest rate risk by remaining in a positive consolidated net cash position.

The Group's assets and liabilities exposed to interest rate fluctuations as at year end is summarised as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | 2021 | 2021 |
| Cash and cash equivalents |  | **6,735** |  | 17152 |
| Overdraft |  | **5,239** |  | 887 |
| Loan notes payable |  | **7,104** |  |  |

---

Interest rate risk arising from borrowings is offset by interest from available cash and cash equivalents. The table below summarises the effect of a change in finance cost on the Group's profit or loss and equity, had the rates charged differed.

---

| | | |
|:---|:---|:---|
| Sensitivity analysis - Cash and cash equivalents | **2022** | 2021 |
| Increase by 100 basis points | **67** | 172 |
| Decrease by 100 basis points | **(67)** | (172) |
| Sensitivity analysis - Overdraft |  |  |
| Increase by 100 basis points | **52** | 9 |
| Decrease by 100 basis points | **(52)** | (9) |
| Sensitivity analysis - Loan notes payable |  |  |
| Increase by 100 basis points | **71** |  |
| Decrease by 100 basis points | **(71)** |  |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **33** | **Dividends** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | 2021 | 2021 | 2020 | 2020 |
| Dividends declared to owners of the Company (excluding NCI) |  | **8,975** |  | 6068 |  | 3887 |

---

Quarterly dividend per share history:

---

| | |
|:---|:---|
| **Declaration date** | **cents per share** |
| January 16, 2020 | 7.5 |
| May 14, 2020 | 7.5 |
| July 16, 2020 | 8.5 |
| October 15, 2020 | 10.0 |
| January 14, 2021 | 11.0 |
| April 15, 2021 | 12.0 |
| July 15, 2021 | 13.0 |
| October 14, 2021 | 14.0 |
| January 13, 2022 | 14.0 |
| April 18, 2022 | 14.0 |
| July 14, 2022 | 14.0 |
| October 13, 2022 | 14.0 |
| December 30, 2022 | 14.0 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | 2021 | 2021 | 2020 | 2020 |
| Dividends declared and paid (excluding NCI) |  | **7,178** |  | 6068 |  | 3887 |
| Dividends due (excluding NCI) |  | **1,797** |  |  |  |  |
|  |  | **8,975** |  | 6068 |  | 3887 |

---

---

| | |
|:---|:---|
| **34** | **Contingencies** |

---

The Group may be subject to various claims that arise in the normal course of business. Management believes there are no contingent liabilities to report.

---

| | |
|:---|:---|
| **35** | **Related parties** |

---

Directors of the company, as well as certain executives, are considered key management. For entities within the Group refer to note 36.

Employee contracts between Caledonia Mining South Africa Proprietary Limited, the Company and key management, include an option for respective key management to terminate such employee contract in the event of a change in control of the Company and to receive a severance payment equal to two years' compensation. If this was triggered as at December 31, 2022 the severance payment would have amounted to $8,575 (2021: $8,214, 2020: $8,338). A change in control would constitute:

● the acquisition of more than 50% of the shares; or

● the acquisition of right to exercise the majority of the voting rights of shares; or

● the acquisition of the right to appoint the majority of the board of directors; or

● the acquisition of more than 50% of the assets of the Group.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **35** | **Related parties (continued)** |

---

**Key management personnel and director transactions:**

The Company has entered into a consultancy agreement with SR Curtis, a director of the Board, effective July 1, 2022 until December 31, 2023 of a monthly fee of $44.1 as from July 1, 2022 until December 31, 2022 and $12.5 from January 1, 2023 until December 31, 2023. During the period ended December 31, 2022, the Company recorded $265 (2021: $Nil) in consultancy fees.

A number of related parties transacted with the Group in the reporting period. The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | 2021 | 2021 | 2020 | 2020 |
| Key management salaries and bonuses |  | **3,773** |  | 3245 |  | 2915 |
| Cash-settled share-based expense\* |  | **617** |  | 540 |  | 1280 |
|  |  | **4,390** |  | 3785 |  | 4195 |

---

*\** *Amount inclusive of $354 (2021: $123, 2020: $295) classified as production costs.* *Employees, officers, directors, consultants and other service providers also participate in the OEICP (see note 11).*

Group entities are set out in note 36.

Refer to note 6 and note 27 for transactions with non-controlling interests.

Refer to note 37 for management fees between Caledonia Mining South Africa Proprietary Limited and Blanket Mine (1983) (Private) Limited.

Refer to note 30 for transactions on the Guarantee issued between GMS UK and Caledonia.

Refer to note 11 for directors fees paid.

All related party transactions occurred at arm's length.

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **36** | **Group entities** |

---

**Intercompany balances with holding company**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Country of incorporation** | **Legal shareholding** | **Legal shareholding** | **Intercompany balances with holding company** | **Intercompany balances with holding company** |
|  |  | **2022** | 2021 | **2022** | 2021 |
| Caledonia Holdings Zimbabwe (Private) Limited | $Zimbabwe | **100** | 100 | **(6683)** | (6795) |
| Caledonia Mining Services (Private) Limited | $Zimbabwe | **100** | 100 | **-** |  |
| Fintona Investments Proprietary Limited | South Africa | **100** | 100 | **14859** | 14859 |
| Caledonia Mining South Africa Proprietary Limited | South Africa | **100** | 100 | **(5329)** | (1406) |
| Greenstone Management Services Holdings Limited | $United Kingdom | **100** | 100 | **(36597)** | (22916) |
| Blanket Mine (1983) (Private) Limited <sup>(2)</sup> | $Zimbabwe | **64** | 64 | **561** | 1030 |
| Blanket Employee Trust Services (Private) Limited (BETS) <sup>(1)</sup> | $Zimbabwe | **-** |  | **-** |  |
| Motapa Mining Company UK Limited | $United Kingdom | **100** |  | **-** |  |
| Arraskar Investments (Private) Limited | $Zimbabwe | **100** |  | **-** |  |

---

<sup>(1)</sup> BETS and the Community Trust are consolidated as structured entities.

<sup>(2)</sup> Refer to note 6 for the effective shareholding. NCI has a 13.2% (2021: 13.2%, (2020: 13.2%) interest in cash flows of Blanket only.

**Intercompany transactions with holding company**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Loans advanced/ (repaid)** | **Loans advanced/ (repaid)** | **Interest received** | **Interest received** | **Foreign exchange profits** | **Foreign exchange profits** |
|  | **2022** | 2021 | **2022** | 2021 | **2022** | 2021 |
| Caledonia Holdings Zimbabwe (Private) Limited | **(424)** | (4479) | **536** | 1263 | **–** |  |
| Caledonia Mining Services (Private) Limited | **–** |  | **–** |  | **–** |  |
| Caledonia Mining South Africa Proprietary Limited | **(4293)** | (1242) | **–** |  | **370** | 448 |
| Greenstone Management Services Holdings Limited | **(13681)** | (2098) | **–** |  | **–** |  |
| Blanket Mine (1983) (Private) Limited <sup>(2)</sup> | **(509)** | 1429 | **40** |  | **–** |  |
| Blanket Employee Trust Services (Private) Limited (BETS) <sup>(1)</sup> | **–** |  | **–** |  | **–** |  |
| Motapa Mining Company UK Limited | **–** |  | **–** |  | **–** |  |
| Arraskar Investments (Private) Limited | **–** |  | **–** |  | **–** |  |
|  | **(18907)** | (6390) | **576** | 1263 | **370** | 448 |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **37** | **Operating Segments** |

---

The Group's operating segments have been identified based on geographic areas. The strategic business units are managed separately because they require different technology and marketing strategies. For each of the strategic business units, the Group's CEO reviews internal management reports on at least a quarterly basis. Zimbabwe and South Africa describe the operations of the Group's reportable segments. The Zimbabwe operating segment comprises Caledonia Holdings Zimbabwe (Private) Limited and subsidiaries Blanket Mine (1983) (Private) Limited and Caledonia Mining Services (Private) Limited, as well as Motapa Mining Company UK Limited and its subsidiary Arraskar Investments (Private) Limited. The South African geographical segment comprises a gold mine that is on care and maintenance (and now sold), as well as sales made by Caledonia Mining South Africa Proprietary Limited to the Blanket Mine. The holding company (Caledonia Mining Corporation Plc) and Greenstone Management Services Holdings Limited (a UK company) responsible for administrative functions within the Group are taken into consideration in the strategic decision-making process of the CEO and are therefore included in the disclosure below. Reconciling amounts do not represent a separate segment. Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before income tax, as included in the internal management report that are reviewed by the Group's CEO. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. The accounting policies of the reportable segments are the same as the Group's accounting policies.

**Information about reportable segments**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **For the twelve months ended December 31, 2022** | **Zimbabwe** | **South Africa** | **Inter-group eliminations adjustments** | **Corporate and other reconciling amounts** | **Total** |
| Revenue | **142082** |  |  |  | **142082** |
| Inter-segmental revenue |  | **19885** | **(19885)** |  |  |
| Royalty | **(7124)** |  |  |  | **(7124)** |
| Production costs | **(62701)** | **(18883)** | **18586** |  | **(62998)** |
| Depreciation | **(10735)** | **(153)** | **789** | **(42)** | **(10141)** |
| Other income | **48** | **12** |  |  | **60** |
| Other expenses | **(11289)** | **(66)** |  | **(427)** | **(11782)** |
| Administrative expenses | **(172)** | **(3047)** |  | **(8722)** | **(11941)** |
| Management fee | **(3454)** | **3454** |  |  |  |
| Cash-settled share-based expense |  |  | **853** | **(1462)** | **(609)** |
| Equity-settled share-based expense |  |  |  | **(484)** | **(484)** |
| Net foreign exchange gain (loss) | **4415** | **(119)** | **(291)** | **406** | **4411** |
| Fair value loss on derivative liabilities |  |  |  | **(1198)** | **(1198)** |
| Net finance cost | **(861)** | **(8)** |  | **229** | **(640)** |
| Dividends (paid) received | **(16992)** |  |  | **16992** |  |
| Profit before tax | **33217** | **1075** | **52** | **5292** | **39636** |
| Tax expense | **(15785)** | **(252)** | **117** | **(850)** | **(16770)** |
| Profit after tax | **17432** | **823** | **169** | **4442** | **22866** |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **37** | **Operating Segments (continued)** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **As at December 31, 2022** | **Zimbabwe** | **South Africa** | **Inter-group eliminations adjustments** | **Corporate and other reconciling amounts** | **Total** |
| ***Geographic segment assets:*** |  |  |  |  |  |
| Current (excluding intercompany) | **33130** | **1448** | **(83)** | **3932** | **38427** |
| Non-Current (excluding intercompany) | **181982** | **822** | **(5446)** | **19406** | **196764** |
| Expenditure on property, plant and equipment (note 17) | **39635** | **(881)** | **(1355)** | **10821** | **48220** |
| Expenditure on evaluation and exploration assets (note 18) | **9394** |  |  | **4** | **9398** |
| Intercompany balances | **33468** | **12202** | **(107227)** | **61557** |  |
| ***Geographic segment liabilities:*** |  |  |  |  |  |
| Current (excluding intercompany) | **(17451)** | **(1901)** |  | **(13089)** | **(32441)** |
| Non-current (excluding intercompany) | **(8197)** | **(101)** | **116** | **(1109)** | **(9291)** |
| Intercompany balances | **(12725)** | **(34753)** | **107227** | **(59749)** |  |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **For the twelve months ended December 31, 2021** | **Zimbabwe** | **South Africa** | **Inter-group eliminations adjustments** | **Corporate and other reconciling amounts** | **Total** |
| Revenue | 121329 |  |  |  | 121329 |
| Inter-segmental revenue |  | 21662 | (21662) |  |  |
| Royalty | (6083) |  |  |  | (6083) |
| Production costs | (53117) | (19902) | 19893 |  | (53126) |
| Depreciation | (8348) | (120) | 466 | (44) | (8046) |
| Other income | 47 | (1) |  |  | 46 |
| Other expenses | (3241) |  |  | (3895) | (7136) |
| Administrative expenses | (128) | (2867) | (2) | (6094) | (9091) |
| Management fee | (2908) | 2908 |  |  |  |
| Cash-settled share-based expense |  | 29 | 691 | (1197) | (477) |
| Net foreign exchange gain (loss) | 1182 | (295) | (92) | 389 | 1184 |
| Fair value loss on derivative instruments |  | (105) |  | (135) | (240) |
| Net finance cost | (1614) | (2) |  | 1255 | (361) |
| Profit before tax | 47119 | 1307 | (706) | (9721) | 37999 |
| Tax expense | (14356) | (652) | 151 |  | (14857) |
| Profit after tax | 32763 | 655 | (555) | (9721) | 23142 |

---

------

**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

---

| | |
|:---|:---|
| **37** | **Operating Segments (continued)** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **As at December 31, 2021** | **Zimbabwe** | **South Africa** | **Inter-group eliminations adjustments** | **Corporate and other reconciling amounts** | **Total** |
| ***Geographic segment assets:*** |  |  |  |  |  |
| Current (excluding intercompany) | 34440 | 2457 | (162) | 16198 | 52933 |
| Non-Current (excluding intercompany) | 159612 | 2315 | (4880) | 897 | 157944 |
| Expenditure on property, plant and equipment (note 17) | 30575 | 1923 | (1019) |  | 31479 |
| Expenditure on evaluation and exploration assets (note 18) | 5554 |  |  | 163 | 5717 |
| Intercompany balances | 34512 | 9131 | (91697) | 48054 |  |
| ***Geographic segment liabilities:*** |  |  |  |  |  |
| Current (excluding intercompany) | (10042) | (1606) |  | (6040) | (17688) |
| Non-current (excluding intercompany) | (11535) | (313) | 322 | (1107) | (12633) |
| Intercompany balances | (12414) | (35467) | 91697 | (43816) |  |

---

**Major customer**

Revenues from Fidelity amounted to $142,082 (2021: $121,329, 2020: $100,002) for the twelve months ended December 31, 2022.

---

| | |
|:---|:---|
| **38** | **Defined Contribution Plan** |

---

Under the terms of the Mining Industry Pension Fund ("Fund") in Zimbabwe, eligible employees contribute a fixed percentage of their eligible earnings to the Fund. Blanket Mine makes a matching contribution plus an inflation levy as a fixed percentage of eligible earnings of these employees. The total contribution by Blanket Mine for the year ended December 31, 2022 was $1,022 (2021: $898, 2020: $796).

---

| | |
|:---|:---|
| **39** | **Subsequent events** |

---

There were no significant events between December 31, 2022 and the date of issue of these consolidated financial statements other than included in the preceding notes to the consolidated financial statements.

---

| | |
|:---|:---|
| **40** | **Going concern** |

---

The directors have, at the time of approving these consolidated financial statements, a reasonable expectation that Caledonia has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing these consolidated financial statements.

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**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

**DIRECTORS AND OFFICERS at March 24, 2023**

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| | |
|:---|:---|
| **BOARD OF DIRECTORS** | **OFFICERS** |
| L.A. Wilson (2) (3) (4) (6) (7) (8)<br> Chairman of the Board | M. Learmonth (5) (6) (7) (8)<br> Chief Executive Officer |
| Non-executive Director | Jersey, Channel Islands |
| Washington DC, United States of America |  |
| S. R. Curtis (4) (5) (6) (8) | D. Roets (5) (6) (7) (8) |
| Non-executive Director<br> Johannesburg, South Africa | Chief Operating Officer<br> Johannesburg, South Africa |
| J. L. Kelly (1) (2) (3) (4) (6) (8) | C.O. Goodburn (6) (7) |
| Non-executive Director<br> Connecticut, United States of America | Chief Financial Officer<br> Johannesburg, South Africa |
| J. Holtzhausen (1) (2) (4) (5) (6) (7) | A. Chester (7) (8) |
| Chairman Audit Committee<br> Non-executive Director,<br> Cape Town, South Africa | General Counsel, Company Secretary and Head of<br> Risk and Compliance<br> Jersey, Channel Islands |
| M. Learmonth (5) (6) (7) (8) | **BOARD COMMITTEES** |
| Chief Executive Officer | (1) Audit Committee |
| Jersey, Channel Islands | (2) Compensation Committee |
|  | (3) Corporate Governance Committee |
| N. Clarke (4) (5) (6) (7) | (4) Nomination Committee |
| Non-executive Director | (5) Technical Committee |
| East Molesey, United Kingdom | (6) Strategic Planning Committee |
|  | (7) Disclosure Committee |
| G. Wildschutt (1) (3) (4) (6) (8) | (8) ESG Committee |
| Non-executive Director |  |
| Johannesburg, South Africa |  |
| D. Roets (5) (6) (7) (8) |  |
| Chief Operating Officer |  |
| Johannesburg, South Africa |  |
| G. Wylie (4) (5) (6) |  |
| Non-executive Director |  |
| Malta, Europe |  |
| V. Gapare (5) (6) (8) |  |
| Executive Director |  |
| Harare, Zimbabwe |  |

---

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**Caledonia Mining Corporation Plc**

**Notes to the Consolidated Financial Statements**

**For the years ended December 31, 2022, 2021 and 2020**

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

------

**CORPORATE DIRECTORY as at March 24, 2023**

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| | |
|:---|:---|
| **CORPORATE OFFICES** | **SOLICITORS** |
| **Jersey** | **Mourant Ozannes (Jersey)** |
| Head and Registered Office | 22 Grenville Street |
| Caledonia Mining Corporation Plc | St Helier |
| B006 Millais House | Jersey |
| Castle Quay | Channel Islands |
| St Helier |  |
| Jersey JE2 3NF | **Borden Ladner Gervais LLP (Canada**) |
|  | Suite 4100, Scotia Plaza |
| **South Africa** | 40 King Street West |
| Caledonia Mining South Africa Proprietary Limited | Toronto, Ontario M5H 3Y4 |
| No. 1 Quadrum Office Park | Canada |
| Constantia Boulevard |  |
| Floracliffe | **Memery Crystal LLP (United Kingdom)** |
| South Africa | 165 Fleet Street |
|  | London EC4A 2DY |
| **Zimbabwe** | United Kingdom |
| Caledonia Holdings Zimbabwe (Private) Limited |  |
| P.O. Box CY1277 | **Dorsey & Whitney LLP (US)** |
| Causeway, Harare | TD Canada Trust Tower |
| Zimbabwe | Brookfield Place |
|  | 161 Bay Street |
| **Capitalisation (March 24, 2023)**  | Suite 4310 |
| Authorised: Unlimited | Toronto, Ontario |
| **Shares, Warrants and Options Issued:** | M5J 2S1 |
| Shares: 17,283,312 | Canada |
| Options: 20,000 |  |
|  | **Gill, Godlonton and Gerrans (Zimbabwe)** |
| **SHARE TRADING SYMBOLS** | Beverley Court |
| NYSE American - Symbol "CMCL" | 100 Nelson Mandela Avenue |
| AIM - Symbol "CMCL" | Harare, Zimbabwe |
| VFEX - Symbol "CMCL" |  |
|  | **Bowman Gilfillan Inc (South Africa)** |
| **BANKER** | 11 Alice Lane |
| **Barclays** | Sandton |
| Level 11 | Johannesburg |
| 1 Churchill Place | 2196 |
| Canary Wharf |  |
| London E14 5HP | **AUDITOR** |
|  | **BDO South Africa Incorporated** |
| **NOMINATED ADVISOR** | Wanderers Office Park |
| **Cenkos Securities Plc** | 52 Corlett Drive |
| 6.7.8 Tokenhouse Yard | Illovo 2196 |
| London | South Africa |
| EC2R 7AS | Tel: +27(0)10 590 7200 |
| **MEDIA AND INVESTOR RELATIONS** | **REGISTRAR AND TRANSFER AGENT**  |
| **BlytheRay Communications** | **Computershare**  |
| 4-5 Castle Court | 150 Royall Street, |
| London EC3V 9DL | Canton, |
| Tel: +44 20 7138 3204 | Massachusetts, 02021 |
|  | Tel: +1 800 736 3001 or +1 781 575 3100  |

---

## Exhibit 99.2

**Exhibit 99.2**

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| | |
|:---|:---|
| **CALEDONIA MINING CORPORATION PLC** | **March 24, 2023** |

---

**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 December 31, 2022 (*"*Q4 2022*" *or the* "*Quarter*"*) and the year ended December 31, 2022 (the* "*Year*"*). It should be read in conjunction with the Consolidated Financial Statements of Caledonia for the Year (the* "*Consolidated Financial Statements*"*) which are available from the System for Electronic Data Analysis and Retrieval at www.sedar.com or from Caledonia*'*s website at www.caledoniamining.com. The Consolidated Financial Statements and related notes have been prepared in accordance with International Financial Reporting Standards (*"*IFRS*"*) as issued by the International Accounting Standards Board. 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 thousands of US Dollars, unless stated otherwise.***

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**TABLE OF CONTENTS**

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| | | |
|:---|:---|:---|
| 1 | OVERVIEW | OVERVIEW |
| 2 | HIGHLIGHTS  | HIGHLIGHTS  |
| 3 | SUMMARY FINANCIAL RESULTS | SUMMARY FINANCIAL RESULTS |
| 4 | OPERATIONS | OPERATIONS |
|  | 4.1 | Safety, Health and Environment |
|  | 4.2 | Social Investment and Contribution to the Zimbabwean Economy |
|  | 4.3 | Gold Production |
|  | 4.4 | Underground |
|  | 4.5 | Metallurgical Plant |
|  | 4.6 | Production Costs |
|  | 4.7 | Capital Projects |
|  | 4.8 | Indigenisation |
|  | 4.9 | Zimbabwe Commercial Environment  |
|  | 4.10 | Opportunities and Outlook |
|  | 4.11 | COVID-19 |
|  | 4.12 | Solar project |
| 5 | EXPLORATION  | EXPLORATION  |
| 6 | INVESTING | INVESTING |
| 7 | FINANCING | FINANCING |
| 8 | LIQUIDITY AND CAPITAL RESOURCES | LIQUIDITY AND CAPITAL RESOURCES |
| 9 | OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL COMMITMENTS AND CONTINGENCIES | OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL COMMITMENTS AND CONTINGENCIES |
| 10 | NON-IFRS MEASURES | NON-IFRS MEASURES |
| 11 | RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS |
| 12 | CRITICAL ACCOUNTING ESTIMATES | CRITICAL ACCOUNTING ESTIMATES |
| 13 | FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS |
| 14 | DIVIDEND POLICY | DIVIDEND POLICY |
| 15 | MANAGEMENT AND BOARD  | MANAGEMENT AND BOARD  |
| 16 | SECURITIES OUTSTANDING | SECURITIES OUTSTANDING |
| 17 | RISK ANALYSIS | RISK ANALYSIS |
| 18 | FORWARD LOOKING STATEMENTS | FORWARD LOOKING STATEMENTS |
| 19 | CONTROLS | CONTROLS |
| 20 | QUALIFIED PERSON | QUALIFIED PERSON |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **OVERVIEW** 

Caledonia is a Zimbabwean focussed exploration, development and mining corporation. Caledonia owns a 64% stake in the gold-producing Blanket Mine ("Blanket") and a 100% stake in the Bilboes, Motapa and Maligreen gold mining claims, 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").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **HIGHLIGHTS** 

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **3 months ended** <br> **December 31** | **3 months ended** <br> **December 31** | **12 months ended** <br> **December 31** | **12 months ended** <br> **December 31** | **Comment** |
|  | 2021 | **2022** | 2021 | **2022** |  |
| Gold produced (oz) | 18604 | **21049** | 67476 | **80775** | Record annual gold production. The gold ounces produced in the Year were 19.7% higher than the previous year due to increased tonnes milled; gold produced in the Quarter was 13.1% higher than the comparable quarter due to increased tonnes milled offset by a lower grade and lower recovery. |
| On-mine cost per ounce ($/oz)<sup>1</sup> | 740 | **814** | 742 | **735** | On-mine cost per ounce in the Quarter increased by 10.0% from the comparable quarter due to higher operating costs due to higher consumables usage, inflationary pressures on key consumables and increases in RTGS$ denominated on-mine administrative costs. On-mine cost per ounce for the Year was 0.9% lower than the previous year due to the spreading of costs over more production ounces in the Year. |
| All-in sustaining cost ("AISC")<sup>1</sup>  | 864 | **964** | 856 | **878** | The AISC per ounce in the Quarter increased by 11.5% compared to the comparable quarter due to the higher on-mine cost per ounce and higher sustaining capital expenditure.<br> The AISC per ounce for the Year increased by 2.6% from the prior year due to higher administrative costs and sustaining capital expenditure. |
| Average realised gold price ($/oz)<sup>1</sup> | 1768 | **1714** | 1766 | **1772** | The average realised gold price reflects international spot prices. |
| Gross profit<sup>2</sup> | 14043 | **11358** | 54074 | **61819** | Gross profit for the Quarter decreased due to increased production costs and the lower realised gold price which outweighed the effect of increased production.<br> Gross profit for the Year increased due to higher production, a higher realised gold price and lower on-mine cost per ounce. |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Net profit (loss) attributable to shareholders | 4222 | **(8029)** | 18405 | **17903** | Net loss for the Quarter includes higher production costs of $4.2m, a foreign exchange loss movement of $3m compared to the comparable quarter and an impairment of $8.2m in respect of prospective capital development areas not in the life of mine plan for mining areas above 750 metres. Net profit for the Year decreased predominantly due to higher taxes as a result of non-deductible expenditure for the Year incurred at a Group level. |
| Basic IFRS earnings per share ("EPS") (cents) | 33.3 | **(62.2)** | 148.6 | **135.5** | IFRS EPS reflects the movement in IFRS profit attributable to shareholders. |
| Adjusted EPS (cents)<sup>1</sup> | 42.1 | **41.1** | 225.9 | **219.9** | Adjusted EPS excludes net foreign exchange gains/(losses), inventory write-down, impairments, deferred tax and fair value movements on derivative financial instruments. |
| Net cash from operating activities | 9099 | **6823** | 30903 | **42615** | Net cash from operating activities for the Year increased predominantly due to a reduction in net working capital reduced by a decrease in cash generated from operations before working capital changes. Net cash from operating activities in the Quarter decreased predominantly due to lower gross profit. |
| Net cash and cash equivalents | 16265 | **1496** | 16265 | **1496** | Net cash has reduced due to the high level of investment at Blanket and investment and expenditure on other projects.  |

---

*<sup>1</sup> 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 10 of this MD&A for a discussion of non-IFRS measures.*

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

**Safety**

Regrettably, a fatality occurred on February 21, 2022 and another on February 16, 2023. The fatalities occurred as a result of a vehicle accident underground and a secondary blasting accident. The directors and management of Caledonia and Blanket express their sincere condolences to the family and colleagues of the deceased. Management has provided the necessary assistance to the Ministry of Mines Inspectorate Department in its enquiries into these incidents. Caledonia takes the safety of its employees very seriously and, accordingly, measures have been taken to reinforce adherence to prescribed safety procedures. Safety is discussed further in section 4.1.

------

**Bilboes Gold acquisition and tribute transaction**

On January 6, 2023 Caledonia announced that it had satisfied the conditions precedent to purchase Bilboes Gold Limited ("Bilboes Gold"), the parent company that owns, through its Zimbabwe subsidiary, Bilboes Holdings (Private) Limited ("Bilboes Holdings"), the Bilboes gold project in Zimbabwe ("Bilboes"). Bilboes is a large, high-grade gold (sulphide and oxide) deposit located approximately 75 km north of Bulawayo, Zimbabwe. The total consideration payable is 5,123,044 shares (the "Consideration Shares") representing 28.5% of Caledonia's fully diluted shares (although subject to adjustment as mentioned below) and a 1% net smelter royalty on the revenues arising from the project.

Under the transaction, 5% of the total consideration shares (256,152 shares (the "Deferred Shares")) have been retained by Caledonia in order to make any adjustments to the purchase price after completion to account for any extraordinary liabilities incurred prior to completion.

441,095 of the total consideration shares that would have been issued to Toziyana Resources Limited ("Toziyana") (the "Escrow Shares") have been withheld by Caledonia to be issued to Shining Capital Holdings II LP ("Shining Capital") in settlement of a separate commercial arrangement between Toziyana's holding company and Shining Capital's subsidiary Infinite Treasure Limited. The issue of the Escrow Shares to Shining Capital is subject to Reserve Bank of Zimbabwe approval for the commercial arrangement between Toziyana's holding company and Infinite Treasure Limited.

Bilboes has NI43-101 compliant proven and probable mineral reserves of 1.96 million ounces of gold in 26.64 million tonnes at a grade of 2.29 g/t and measured and indicated mineral resources of 2.56 million ounces of gold in 35.18 million tonnes at a grade of 2.26 g/t and inferred mineral resources of 577,000 ounces of gold in 9.48 million tonnes at a grade of 1.89 g/t<sup>3</sup>.

The main objective at Bilboes is to construct a large, open-pit operation that addresses the sulphide material. However, in the short term, a smaller mining and processing operation will focus on the remaining oxide material. Mining activities on the oxide project at Bilboes started in the first quarter of 2023 and it is expected that the project will start to produce gold from the end of March 2023 and generate a cumulative profit within six months of commencement of activity. The oxide project also has the benefit of an element of pre-stripping for the construction of the main development.

**Record annual Production at Blanket Mine**

Production for the Quarter was 21,049 ounces and 80,775 ounces for the Year. Production ounces represents a 13.1% increase from the comparable quarter and a 19.7% increase from the prior year. Production for the Year exceeded the top end of our expectations and represents a new annual production record. At December 31, 2022 a surface stockpile of approximately 2,500 tonnes of crushed ore containing approximately 247 ounces of recoverable gold was unprocessed and is included in the production numbers for the Year.

**Mineral resource and reserve updates at Blanket Mine and Maligreen**

*Blanket Mine*

On February 6, 2023 Caledonia announced that the total measured and indicated mineral resources estimate at Blanket, inclusive of mineral reserves, had increased by 52% to 1,095,000 ounces of gold in 10.72 million tonnes at a grade of 3.18g/t and the total mineral reserves estimate at Blanket had increased by 1% to 395,000 ounces of gold in 3.94 million tonnes at a grade of 3.12g/t compared to the amounts stated in the technical report summary exhibited to the Company's annual report on Form 20-F for the year ending December 31, 2022<sup>4</sup>.

------

*<sup>3</sup> Refer to the technical report entitled "BILBOES GOLD PROJECT FEASIBILITY STUDY" with effective date December 15, 2021 prepared by DRA Projects (Pty) Ltd filed by the Company on SEDAR (www.sedar.com) on July 21, 2022.*

<sup>4</sup> *Refer to the announcement by the Company entitled* "*Mineral Resources and Reserves Update at the Blanket Mine*" *dated February 6, 2023.*

------

The review of existing data, the completion of Central Shaft and the migration to digital estimation protocols allowed for an increase to the mineral resources estimate. The estimate was based on data at as March 31, 2022 for mineral resources and September 1, 2022 for mineral reserves.

A technical report detailing the above information was filed on SEDAR on March 13, 2023.<sup>5</sup>

*Maligreen*

On November 7, 2022 the Company published an announcement and an updated technical report on SEDAR<sup>6</sup> updating the estimated mineral resources at Maligreen. The report has an effective date of September 30, 2022 and estimates measured and indicated mineral resources of 8.03 million tonnes at a grade of 1.71g/t containing approximately 442,000 ounces of gold and inferred mineral resources of 6.17 million tonnes at a grade of 2.12g/t containing approximately 420,000 ounces of gold. The upgrade to the mineral resources at Maligreen improves the geological confidence of approximately half the mineral resources from inferred to measured and indicated mineral resources from the previous mineral resources statement.

**Acquisition of Motapa gold exploration project**

On November 2, 2022 Caledonia announced that it had purchased Motapa Mining Company UK Limited, the parent company of a Zimbabwe subsidiary which holds a registered mining lease over the Motapa gold exploration property in Southern Zimbabwe ("Motapa").

Caledonia considers Motapa to be highly prospective and strategically important to its growth ambitions in Zimbabwe in terms of both location and scale. Motapa is a large exploration property which is contiguous to Caledonia's Bilboes gold project.

Motapa was formerly owned and explored by Anglo American Zimbabwe prior to its exit from the Zimbabwean gold sector in the late 1990s and is approximately 75km north of Bulawayo with a mining lease covering approximately 2,200 hectares.

Motapa has been mined throughout most of the second half of the 20th century; Caledonia understands that during this period the region produced as much as 300,000 ounces of gold. Whilst none of the mining infrastructure remains, the evidence of historical mining will provide guidance to our exploration team in best understanding the prospectivity of the region.

**Solar plant at Blanket Mine**

Caledonia's wholly owned 12.2 MWac solar plant was connected to the Blanket grid in November, 2022. The solar plant was fully commissioned early February, is operating better than expected and is generating slightly more power than anticipated. The solar plant currently provides approximately 27%of Blanket's average electricity demand and has significantly reduced the diesel generator fuel consumption compared to the usage in 2022. The addition of the solar plant has reduced the frequency of interruptions to production due to power outages and has contributed to a reduction in the amount of diesel used in production and capital projects.

**Changes to the board and management**

The following changes to management and the board were announced during the Year and up to the date of this MD&A:

● On January 20, 2022, Mr Dana Roets, Chief Operating Officer, was appointed to the board as an executive director.

------

<sup>5</sup> *Refer to the technical report entitled "NI 43-101 Technical Report on the Blanket Gold Mine, Zimbabwe", with effective date September 1, 2022 prepared by Minxcon (Pty) Ltd filed by the Company on SEDAR (www.sedar.com) on March 13, 2023.*

***<sup>6</sup>*** *Refer to technical report entitled "Caledonia Mining Corporation Plc Updated NI 43-101 Mineral Resource Report on the Maligreen Gold Project, Zimbabwe dated November 3, 2022 prepared by Minxcon (Pty) Ltd and filed on SEDAR on November 7, 2022.*

------

● On February 28, 2022, Mr John McGloin resigned from the board as a non-executive director; and

● On May 4, 2022, Mr Gordon Wylie was appointed to the board as an independent non-executive director with effect from May 5, 2022;

● On July 1, 2022, Mr Chester Goodburn, previous Group Financial Manager, was appointed as Chief Financial Officer;

● On July 1, 2022, Mr Mark Learmonth, previously Chief Financial Officer, was appointed as Chief Executive Officer to replace Mr Steve Curtis, who retired. Mr Curtis remains a non-executive director of the Company and a consultant to the Group;

● On January 6, 2023, Mr Victor Gapare, previous Chief Executive Officer of Bilboes Holdings, was appointed to the board as executive director;

**Strategy and Outlook: increased focus on growth opportunities**

The immediate strategic focus is to:

● maintain production at Blanket at the targeted rate of between 75,000 - 80,000 ounces range per annum from 2022;

● re-commence deep level drilling at Blanket with the objective of further upgrading inferred mineral resources, thereby extending the life of mine;

● commence oxide mining and processing operations at Bilboes with the objective to produce 12,500-17,000 ounces of gold in 2023; and

● complete the Caledonia feasibility study on the Bilboes sulphide project to estimate the funding requirements and commence development of the sulphides project.

Subject to the availability of funds, Caledonia will continue geological evaluations at Maligreen and Blanket Mine and commence geological evaluation at Motapa.

The strategy and outlook of Caledonia is further discussed in section 4.10 of this MD&A.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **SUMMARY FINANCIAL RESULTS** 

The table below sets out the consolidated profit or loss for the Quarter, the 12 months to December 31, 2022 and their prior period comparable amounts prepared under IFRS.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Condensed Consolidated Statements of Profit or Loss and Other Comprehensive Income** | **Condensed Consolidated Statements of Profit or Loss and Other Comprehensive Income** | **Condensed Consolidated Statements of Profit or Loss and Other Comprehensive Income** | **Condensed Consolidated Statements of Profit or Loss and Other Comprehensive Income** | **Condensed Consolidated Statements of Profit or Loss and Other Comprehensive Income** | **Condensed Consolidated Statements of Profit or Loss and Other Comprehensive Income** |
| ***($***'***000***'***s)*** | **3 months ended** | **3 months ended** | **12 months ended** | **12 months ended** | **12 months ended** |
|  | **Dec-31** | **Dec-31** | **Dec-31** | **Dec-31** | **Dec-31** |
|  | 2021 | **2022** | 2020 | 2021 | **2022** |
| Revenue | 32136 | **34178** | 100002 | 121329 | **142082** |
| Royalty | (1612) | **(1716)** | (5007) | (6083) | **(7124)** |
| Production costs | (14178) | **(18335)** | (43711) | (53126) | **(62998)** |
| Depreciation | (2303) | **(2769)** | (4628) | (8046) | **(10141)** |
| Gross profit | 14043 | **11358** | 46656 | 54074 | **61819** |
| Other income | 4 | **43** | 4765 | 46 | **60** |
| Other expenses | (1741) | **(9947)** | (5315) | (7136) | **(11782)** |
| Administrative expenses | (3830) | **(3873)** | (7997) | (9091) | **(11941)** |
| Net foreign exchange gain/(loss) | 843 | **(2229)** | 4305 | 1184 | **4411** |
| Cash-settled share-based expense | (51) | **(274)** | (1413) | (477) | **(609)** |
| Equity-settled share-based expense |  | **(308)** |  |  | **(484)** |
| Net derivative financial instrument expenses | (133) | **(38)** | (266) | (240) | **(1198)** |
| Operating profit | 9135 | **(5268)** | 40735 | 38360 | **40276** |
| Net finance costs | (7) | **(340)** | (305) | (361) | **(640)** |
| **Profit before tax** | 9128 | **(5608)** | 40430 | 37999 | **39636** |
| Tax expense | (3539) | **(2719)** | (15173) | (14857) | **(16770)** |
| **Profit/(loss) for the period** | 5589 | **(8327)** | 25257 | 23142 | **22866** |
| **Other comprehensive income** |  |  |  |  |  |
| ***Items that are or may be reclassified to profit or loss*** |  |  |  |  |  |
| Exchange differences on translation of foreign operations | (382) | **396** | (173) | (531) | **(462)** |
| **Total comprehensive income for the period** | 5207 | **(7931)** | 25084 | 22611 | **22404** |
| **Profit attributable to:** |  |  |  |  |  |
| Owners of the Company | 4222 | **(8029)** | 20780 | 18405 | **17903** |
| Non-controlling interests | 1367 | **(298)** | 4477 | 4737 | **4963** |
| **Profit for the period** | 5589 | **(8327)** | 25257 | 23142 | **22866** |
| **Total comprehensive income attributable to:** |  |  |  |  |  |
| Owners of the Company | 3840 | **(7633)** | 20607 | 17874 | **17441** |
| Non-controlling interests | 1367 | **(298)** | 4477 | 4737 | **4963** |
| **Total comprehensive income for the period** | 5207 | **(7931)** | 25084 | 22611 | **22404** |
| **Earnings per share (cents)** |  |  |  |  |  |
| Basic | 33.3 | **(62.2)** | 173.4 | 148.6 | **135.5** |
| Diluted | 33.3 | **(62.2)** | 173.2 | 148.5 | **135.4** |
| **Adjusted earnings per share (cents)<sup>7</sup>** |  |  |  |  |  |
| Basic | 42.1 | **41.1** | 204.2 | 225.9 | **219.9** |
| Dividends declared per share (cents) | 14.0 | **28.0** | 33.5 | 50.0 | **70.0** |

---

*<sup>7</sup> Non-IFRS measures such as* "*adjusted EPS*" *are used throughout this document. Refer to section 10 of this MD&A for a discussion of non-IFRS measures.*

------

Revenue in the Quarter was 6.4% higher than the comparable quarter due to a 9.7% increase in the quantity of gold sold partly offset by a 3.1% reduction in the average gold price obtained from $1,768 per ounce in the comparable quarter to $1,714 per ounce in the Quarter. Revenue for the Year was 17.1% higher than in 2021 due to a 16.7% increase in gold ounces sold.

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

Production costs increased by 29.3% in the Quarter compared to the comparable quarter; production costs for the Year increased by 18.6% compared to 2021 due to higher production tonnages. The on-mine cost per ounce increased by 10% in the Quarter from the comparable quarter.

Production costs in the Quarter increased due to inflationary pressures on consumable expenditures that contributed to a $15 per ounce increase in on-mine cost per ounce. Inflationary increases were incurred on key consumables such as explosives, diesel, cyanide, carbon, lime and steel products (rods, steel balls, and drill steels). High mining consumables usage added $13 per ounce to the production cost. High usage of explosives was due to achievement of lower advances per blast and secondary blasting activities. Year end inventory write downs equating to $563 for the year, largely on decommissioned drill rig spares, contributed to a $29 increase in the production cost per ounce. RTGS$ denominated administrative costs increases, predominantly to local authorities, further contributed to a $9 increase in cost per ounce.

Year to date on mine cost per ounce was 0.9% lower than the prior year due to higher production which spread production costs over more ounces sold.

The AISC per ounce in the Quarter increased by 11.5% from the comparable quarter and was 2.6% higher for the Year compared to 2021, due to the higher production cost, sustaining capital expenditure and higher administrative expenses.

The on-mine cost per ounce and the AISC per ounce increased in the Quarter compared to the comparable quarter as illustrated in the graphs below.

![mda9.jpg](mda9.jpg)

------

![mda10.jpg](mda10.jpg)

Administrative expenses are detailed in note 11 to the Consolidated Financial Statements and include the costs of Caledonia's offices and personnel in Johannesburg, the UK and Jersey which provide the following functions: technical services, finance, procurement, investor relations, corporate development, legal and company secretarial.

Administrative expenses in the Quarter were 1.1% higher than the comparable quarter and 31.3% higher for the Year compared to 2021. Administrative costs for the Year increased due to advisory services fees of $1.1 million incurred to complete the acquisitions of Bilboes and Motapa. Increased Johannesburg based technical services were appointed due to the increase in production at Blanket and to build up the skills required to perform the Caledonia feasibility study for the Bilboes sulphides project.

The depreciation charge in the Quarter increased because of increased production (fixed assets are depreciated over production ounces) on the Central Shaft assets following its commissioning at the end of March 2021.

Other expenses are detailed in note 10 to the Consolidated Financial Statements and include an impairment expense on property, plant and equipment of $8,209. The impairment of the capital development areas, classified as property, plant and equipment in the Consolidated Financial Position, predominantly relates to prospective areas above 750 metres which are not included in the current life of mine plan. Other expenses also include community and social responsibility ("CSR") expenses of $897, $830 spent to maintain the operating integrity of Bilboes before completion of the acquisition and an impairment expense of $467 was incurred on the accumulated expenditures incurred on the Connemara North exploration project in the prior year. Intermediated monetary transaction tax ("IMTT") charged by the Zimbabwean government increased to $1,378 for the Year due to the presidential announcement made on May 7, 2022 to increase the IMTT charges on all domestic foreign currency transfers from 2% to 4%.

Net foreign exchange movements relate to gains and losses arising on monetary assets and liabilities that are held in currencies other than the USD. Large foreign exchange movements arose due to the significant devaluation of the RTGS$ to the USD which is discussed in section 4.9 of this MD&A. The net foreign exchange movement in the Quarter was significantly higher than in the comparable quarter due to an increase in RTGS$ net denominated monetary assets in 2022 compared to 2021.

------

The tax expense comprised of the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Analysis of consolidated tax expense/(credit) for the Year** | **Analysis of consolidated tax expense/(credit) for the Year** | **Analysis of consolidated tax expense/(credit) for the Year** | **Analysis of consolidated tax expense/(credit) for the Year** | **Analysis of consolidated tax expense/(credit) for the Year** |
| **($**'**000**'**s)** | **Zimbabwe** | **South Africa** | **UK** | **Total** |
| Income tax | 8451 | 210 |  | 8661 |
| Withholding tax |  |  |  |  |
| Management fee |  | 174 |  | 174 |
| Deemed dividend | 247 |  |  | 247 |
| CHZ dividends to GMS-UK |  |  | 850 | 850 |
| Deferred tax | 6970 | (132) |  | 6838 |
|  | 15668 | 252 | 850 | 16770 |

---

The overall effective taxation rate for the Quarter was (48.5%) (2021: 38.8%); Year was 42.3% (2021: 39.1%). The effective tax rates calculated in the USD functional currency are not comparable between periods predominantly due to the Zimbabwean taxable income calculated in RTGS$. Further, as 100% of capital expenditure is tax deductible in the year in which it is incurred for tax and depreciation commences when the project enters production, timing differences can alter the effective tax rate based on the capital expenditure for a quarter. Large devaluations in the RTGS$ against the USD reduce the income tax paid and the deferred tax liability. Income tax payments are made in the same proportion of RTGS$ and USD as revenue is received. Deferred tax predominantly comprises the difference between the accounting and tax treatments of capital investment. The enacted income tax rate in Zimbabwe remained unchanged at 24.72% (2021: 24.72%). The majority 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").

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").

IFRS basic EPS for the Quarter decreased by 286.9% from 33.3 cents in the comparable quarter to a 62.2 cents loss; IFRS basic EPS for the Year decreased by 8.8% from 148.6 cents in the prior Year to 135.5 cents. Adjusted EPS for the Quarter excludes *inter alia* the effect of foreign net exchange movements, inventory write downs, impairments of capital development not in the life of mine plan for mining areas above 750 metres and deferred tax. Adjusted EPS reduced by 2.4% from 42.1 cents in the comparable quarter to 41.1 cents due to higher production cost. Adjusted EPS for the Year decreased by 2.7% from 225.9 cents to 219.9 cents. A reconciliation from IFRS EPS to adjusted EPS is set out in section 10.3.

5 dividend tranches of $14 cents per share were announced during the Year. 2 tranches of $14 cents per share were announced in the Quarter on October 3, 2022 and December 30, 2022. However the $14 cents dividend per share tranche announced on December 30, 2022 was paid on January 27, 2023. Caledonia's dividends are discussed further in section 14.

Risks that may affect Caledonia's future financial condition are discussed in sections 4.9 and 17.

------

The table below sets out the consolidated statements of cash flows for the years ended December 31, 2022, 2021 and 2020 prepared under IFRS.

---

| | | | |
|:---|:---|:---|:---|
| **Condensed Consolidated Statements of Cash Flows** | **Condensed Consolidated Statements of Cash Flows** |  |  |
| ***($***'***000***'***s)*** |  |  |  |
|  | **12 months ended December 31** | **12 months ended December 31** | **12 months ended December 31** |
|  | 2020 | 2021 | **2022** |
| **Cash generated from operations**  | 37967 | 38703 | **49657** |
| Interest received | 56 | 14 | **17** |
| Net finance costs paid | (405) | (388) | **(192)** |
| Tax paid | (6656) | (7426) | **(6866)** |
| **Net cash from operating activities** | 30962 | 30903 | **42616** |
| **Cash flows used in investing activities** |  |  |  |
| Acquisition of property, plant and equipment | (25081) | (32112) | **(41495)** |
| Acquisition of exploration and evaluation assets | (2759) | (5717) | **(2596)** |
| (Purchase of)/Proceeds from derivative financial assets | (1058) | 1066 | **-** |
| Proceeds from sale of assets held for sale |  | 500 | **-** |
| Proceeds from disposal of subsidiary | 900 | 340 | **-** |
| Acquisition of put options |  |  | **(478)** |
| **Net cash used in investing activities** | (27998) | (35923) | **(44569)** |
| **Cash flows from financing activities** |  |  |  |
| Dividends paid | (4542) | (8069) | **(8906)** |
| Proceeds from/(repayment of) gold loan |  | 2752 | **(3698)** |
| Proceeds from call options |  | 208 | **240** |
| Term loan repayments | (574) | (361) | **-** |
| Payment of lease liabilities | (118) | (129) | **(150)** |
| Shares issued - equity raise (net of transaction cost) | 12538 | 7806 | **-** |
| Proceeds share options exercised | 30 | 165 | **-** |
| **Net cash from/(used in) financing activities** | 7334 | 2372 | **(12514)** |
| **Net increase/(decrease) in cash and cash equivalents** | 10298 | (2648) | **(14467)** |
| Effect of exchange rate fluctuations on cash and cash equivalents | (99) | (179) | **(302)** |
| Net cash and cash equivalents at beginning of the period | 8893 | 19092 | **16265** |
| **Net cash and cash equivalents at end of the year**  | 19092 | 16265 | **1496** |

---

Cash generated from operating activities is detailed in note 31 to the Consolidated Financial Statements, showing that cash generated by operations before working capital changes in the Year was $47.8 million, 3.8% lower than $49.7 million in the previous year. Working capital inflows for the Year amounted to $1.9 million.

Tax paid in the Year excludes an amount payable at December 31, 2022 of $1.3 million. The amount will be partially paid after year end and partially offset against the VAT receivable.

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Investment in property, plant and equipment remains high due to the continued investment in capital development at Blanket, which is discussed further in section 4.7 of this MD&A in sustaining capital investment and includes $12.2 million of investment in the solar project as discussed in section 4.12.

The acquisition of exploration and evaluation assets relates to the ongoing work at the Maligreen claims, a $1 million payment towards the Motapa acquisition and geological evaluations as discussed further in section 5.

Dividends for the Year comprise $7.1 million paid to shareholders of the Company and $1.8 million to Blanket's minority shareholders as discussed in section 14. A dividend of $14 cents per share was announced on December 30, 2022 and was payable at the end of January 2023. Accordingly, the last dividend comprising an amount of $1.9 million was included as part of Shareholders for dividend in note 30 of the Consolidated Financial Statements.

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 financial assets and liabilities.

The table below sets out the consolidated statements of Caledonia's financial position at December 31, 2022, December 31, 2021 and December 31, 2020 prepared under IFRS.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Summarised Consolidated Statements of Financial Position** | **Summarised Consolidated Statements of Financial Position** | **Summarised Consolidated Statements of Financial Position** | **Summarised Consolidated Statements of Financial Position** | **Summarised Consolidated Statements of Financial Position** |
| *($*'*000*'*s)*  | ***As at*** | Dec-31 | Dec-31 | **Dec-31** |
|  |  | 2020 | 2021 | **2022** |
| **Total non-current assets** | **Total non-current assets** | 133334 | 157944 | **196764** |
| Inventories | Inventories | 16798 | 20812 | **18334** |
| Prepayments | Prepayments | 1974 | 6930 | **3693** |
| Trade and other receivables | Trade and other receivables | 4962 | 7938 | **9185** |
| Income tax receivable | Income tax receivable | 76 | 101 | **40** |
| Cash and cash equivalents | Cash and cash equivalents | 19092 | 17152 | **6735** |
| Derivative financial assets | Derivative financial assets | 1184 |  | **440** |
| Asset held for sale | Asset held for sale | 500 |  | **-** |
| **Total assets** | **Total assets** | 177920 | 210877 | **235191** |
| **Total non-current liabilities** | **Total non-current liabilities** | 9913 | 12633 | **9291** |
| Loan notes payable | Loan notes payable |  |  | **7104** |
| Loans and borrowings - short term portion | Loans and borrowings - short term portion | 408 |  | **-** |
| Lease liabilities – short term portion | Lease liabilities – short term portion | 61 | 134 | **132** |
| Trade and other payables | Trade and other payables | 8664 | 9957 | **17454** |
| Derivative financial liabilities | Derivative financial liabilities |  | 3095 | **-** |
| Income tax payable | Income tax payable | 495 | 1562 | **1324** |
| Overdraft | Overdraft |  | 887 | **5239** |
| Cash-settled share-based payments - short term portion | Cash-settled share-based payments - short term portion | 336 | 2053 | **1188** |
| **Total liabilities** | **Total liabilities** | 19877 | 30321 | **41732** |
| **Total equity** | **Total equity** | 158043 | 180556 | **193459** |
| **Total equity and liabilities** | **Total equity and liabilities** | 177920 | 210877 | **235191** |

---

Non-current assets increased due to the investment at Blanket in the Central Shaft and related infrastructure, electrical infrastructure and sustaining investment; investment in the solar project; and the acquisition and investments in exploration and evaluation properties.

Inventory levels at Blanket reduced by $2.4 million and gold work in progress and ore stockpile increased by $0.4 million because mine production exceeded milling capacity for much of 2022 until milling capacity was increased in September 2022 after the commissioning of ball mill 10 ("BM10"). Inventories include 1,123 ounces of gold work-in-progress (December 2021: 443 ounces), and approximately 247 ounces (December 2021: 174 ounces) of recoverable gold.

------

Prepayments represent deposits and advance payments for goods and services. Prepayments decreased largely due to the reduction in prepayments in respect of the solar project that was fully commission in early February 2023. The Bilboes oxide prepayment of $877 relates to supplier prepayments made in anticipation of the mining activities at the Bilboes oxide project. This amount is expected to be recovered through revenue generated by the Bilboes oxide project from March 2023 onwards.

On August 1, 2022 the Group obtained approval from the Ministry of Mines and Mine Development for the tribute arrangement that allows Caledonia to mine the oxide portion of the Bilboes claims as discussed in section 4.10 of this MD&A. This is accounted for as a separate acquisition of a portion of the greater Bilboes transaction. The expected cost to restore the property, plant and equipment that is relevant to the oxide claims is estimated to be $0.9 million. The amount is to be offset against the purchase price of the acquisition following completion in January 2023.

Trade and other receivables are detailed in note 22 to the Consolidated Financial Statements and include $7.4 million (December 31, 2021: $4.5 million) due from Fidelity Gold Refinery (Private) Limited ("Fidelity"), a subsidiary of the Reserve Bank of Zimbabwe ("RBZ") in respect of gold deliveries prior to the close of business on December 31, 2022 and $1 million (December 31, 2021: $3.2 million) due from the Zimbabwe Government in respect of VAT refunds. The increased receivable due from Fidelity reflects the higher gold production and a larger delivery of gold at the end of the Quarter and Year. The full amount due from Fidelity in respect of gold deliveries was received as it fell due in January 2023. Also included in trade and other receivables is an amount of $0.7 million that relates to the VAT and duties tax, on the import of solar equipment, to be refunded to Caledonia Mining Services (Private) Limited ("CMS").

Trade and other payables includes an amount payable to Voltalia Portugal S.A. in relation to construction of the solar plant of $1.8 million as discussed in section 4.12 of this MD&A.

Derivative financial liabilities decreased due to the gold loan that was repaid in full in the second quarter of 2022 and the significant decrease in the option valuations of the remaining options, as discussed in section 7 of this MD&A. The Derivative financial assets consist of put options purchased on December 22, 2022 from Auramet Trading LLC to hedge 16,672 ounces of gold from February 2023 to May 2023 at a strike price of $1,750. These options were purchased to hedge the Company against gold prices below $1,750 for the quantity of ounces hedged.

The decrease in the cash-settled share-based payments value is due to awards that vested in the first quarter of 2022 and new awards granted to named executive officers ("NEOs") are categorised as equity-settled share-based payments in the Year.

The distribution of the consolidated cash across the jurisdictions where the Group operates was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Geographical location of cash ($**'**000**'**s)** | **Geographical location of cash ($**'**000**'**s)** | **Geographical location of cash ($**'**000**'**s)** | **Geographical location of cash ($**'**000**'**s)** | **Geographical location of cash ($**'**000**'**s)** |
| As at | Mar 31, | Jun 30, | Sep 30, | **Dec 31,** |
|  | 2022 | 2022 | 2022 | **2022** |
| Zimbabwe | 5842 | 8868 | 883 | **(2160)** |
| South Africa | 1861 | 878 | 932 | **694** |
| UK/Jersey | 6727 | 1116 | 4352 | **2962** |
| Total net cash and cash equivalents | 14430 | 10862 | 6167 | **1496** |

---

Included in the cash and cash equivalents is a restricted cash amount of US$1 million (denominated in RTGS$) held by Blanket Mine which has been earmarked to Stanbic Bank Zimbabwe as a letter of credit in favor of CMSA. The letter of credit was issued by Stanbic Bank Zimbabwe on September 15, 2022 in RTGS$ and has a 90-day conversion tenure. The cash on maturity was transferred to CMSA's bank account, denominated in South African Rand, on January 13, 2023. On July 11, 2022, August 30, 2022 and November 1, 2022 $4 million, $2 million and $1.4 million was transferred from CHZ to CMSA.

The short-term portion of the cash-settled share-based payment liability is in respect of awards made to certain employees at Caledonia, CMSA and Blanket in terms of the Company's Omnibus Equity Incentive Compensation Plan ("OEICP"). The awards (other than those made to the NEOs in 2022 which only settle in shares) can be settled in cash or, subject to conditions, shares at the option of the recipient. Of the liability outstanding at Year end $2 million was settled in January 2023.

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

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **($**'**000**'**s except per**  | Mar 31, | Jun 30, | Sep 30, | Dec 31, | Mar 31, | Jun 30, | Sep 30, | **Dec 31,** |
| **share amounts)** | 2021 | 2021 | 2021 | 2021 | 2022 | 2022 | 2022 | **2022** |
| Revenues | 25720 | 29977 | 33496 | 32136 | 35072 | 36992 | 35840 | **34178** |
| Profit/(loss) attributable to owners of the Company | 4550 | 2694 | 6939 | 4222 | 5940 | 11378 | 8614 | **(8029)** |
| EPS – basic (cents) | 37.3 | 21.1 | 56.8 | 33.3 | 44.6 | 87.7 | 63.3 | **(62.2)** |
| EPS – diluted (cents) | 37.2 | 21.1 | 56.7 | 33.3 | 44.6 | 87.7 | 63.3 | **(62.2)** |
| Net cash and cash equivalents | 13027 | 16669 | 34178 | 16265 | 14430 | 10862 | 6167 | **1496** |

---

Fluctuations in profit attributable to owners of the Company on a quarterly and annual basis are due to, *inter alia*, substantial foreign exchange profits, inventory write-downs and other non-cash items as discussed in the relevant MD&As and financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **OPERATIONS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.1** **Safety, Health and Environment** 

The following safety statistics have been recorded for the Quarter and the preceding seven quarters.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Blanket Mine Safety Statistics** | **Blanket Mine Safety Statistics** | **Blanket Mine Safety Statistics** | **Blanket Mine Safety Statistics** |  |  |  |  |  |
| **Classification** | **Q1**<br> **2021** | **Q2**<br> **2021** | **Q3**<br> **2021** | **Q4**<br> **2021** | **Q1**<br> **2022** | **Q2**<br> **2022** | **Q3**<br> **2022** | **Q4**<br> **2022** |
| Fatal | 0 | 0 | 0 | 0 | 1 | 0 | 0 | **0** |
| Lost time injury | 0 | 1 | 0 | 2 | 0 | 2 | 1 | **1** |
| Restricted work activity | 4 | 0 | 1 | 1 | 0 | 1 | 1 | **2** |
| First aid | 0 | 0 | 1 | 0 | 2 | 3 | 0 | **0** |
| Medical aid | 2 | 5 | 6 | 8 | 6 | 3 | 1 | **2** |
| Occupational illness | 0 | 0 | 0 | 0 | 0 | 0 | 0 | **0** |
| Total | 6 | 6 | 8 | 11 | 9 | 9 | 3 | **5** |
| Incidents | 17 | 9 | 26 | 10 | 9 | 10 | 14 | **6** |
| Near misses | 11 | 3 | 6 | 2 | 4 | 7 | 6 | **1** |
| Disability Injury Frequency Rate | 0.53 | 0.14 | 0.12 | 0.24 | 0.12 | 0.36 | 0.22 | **0.33** |
| Total Injury Frequency Rate | 0.79 | 0.85 | 0.98 | 1.58 | 1.07 | 1.08 | 0.34 | **0.56** |
| Man-hours worked (000's) | 1509 | 1418 | 1629 | 1643 | 1686 | 1672 | 1788 | **1801** |

---

------

The Nyanzvi safety training initiative was resumed in the previous quarter as COVID-19 restrictions were relaxed.

Regrettably, a fatality occurred on February 21, 2022 and another on February 16, 2023. The fatalities occurred as a result of a vehicle accident underground and a secondary blasting accident. The directors and management of Caledonia and Blanket express their sincere condolences to the family and colleagues of the deceased. Management has provided the necessary assistance to the Ministry of Mines Inspectorate Department in its enquiries into the incidents. Caledonia takes the safety of its employees very seriously and, accordingly, measures have been taken to reinforce adherence to prescribed safety procedures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.2** **Social Investment and Contribution to the Zimbabwean Economy** 

Blanket's investment in community and social 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.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Payments to the Community and the Zimbabwe Government** | **Payments to the Community and the Zimbabwe Government** | **Payments to the Community and the Zimbabwe Government** | **Payments to the Community and the Zimbabwe Government** | **Payments to the Community and the Zimbabwe Government** | **Payments to the Community and the Zimbabwe Government** | **Payments to the Community and the Zimbabwe Government** |
| **($**'**000**'**s)** | **($**'**000**'**s)** | **($**'**000**'**s)** | **($**'**000**'**s)** | **($**'**000**'**s)** | **($**'**000**'**s)** | **($**'**000**'**s)** |
| **Period** | ***Year*** | **CSR** <br> **Investment** | **Payments** <br> **to GCSOT** | **Payments to** <br> **Zimbabwe** <br> **Government (excl.** <br> **royalties)** | **Royalties** | **Total** |
| Year | *2013* | 2147 | 2000 | 15354 | 4412 | 23913 |
| Year | *2014* | 35 |  | 12319 | 3522 | 15876 |
| Year | *2015* | 50 |  | 7376 | 2455 | 9881 |
| Year | *2016* | 12 |  | 10637 | 2923 | 13572 |
| Year | *2017* | 5 |  | 11988 | 3498 | 15491 |
| Year | *2018* | 4 |  | 10140 | 3426 | 13570 |
| Year | *2019* | 47 |  | 10357 | 3854 | 14258 |
| Year | *2020* | 1689 | 184 | 12526 | 5007 | 19406 |
| Year | *2021* | 1163 | 948 | 16426 | 6083 | 24620 |
| Q1 | *2022* | 153 |  | 4091 | 1758 | 6002 |
| Q2 | *2022* | 94 | 600 | 5014 | 1854 | 7562 |
| Q3 | *2022* | 92 | 600 | 5780 | 1796 | 8268 |
| **Q4** | ***2022*** | **549** | **-** | **4299** | **1716** | **6564** |
| **Year** | ***2022*** | **888** | **1200** | **19184** | **7124** | **28396** |

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

Highlights of the CSR initiatives during the Quarter include the drilling of 20 boreholes in the Gwanda community area in conjunction with GCSOT.

At Sitezi, water was successfully harnessed from Thuli River using the sand abstraction method to supply potable water to Sitezi primary and secondary schools, Enqameni Youth Reflection Centre, and Sitezi clinic.

Beds and linen were procured for Sitezi clinic. IT equipment was also procured for Sitezi secondary school and the Youth Reflection Centre - 35 desktop computers and a server for the secondary school computer science laboratory, 7 laptop computers and 15 digital interactive boards for the two schools were supplied.

Desks and chairs for 390 learners were also procured for Sitezi primary and secondary schools. 17 staff desks were also acquired for the two schools.

GCSOT was paid $1.2 million in dividends during the Year. The dividend represents the full entitlement on GCSOT's 10% shareholding in Blanket for the period, as discussed further in section 4.8.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.3** **Gold Production** 

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Blanket Mine Production Statistics** | **Blanket Mine Production Statistics** | **Blanket Mine Production Statistics** | **Blanket Mine Production Statistics** | **Blanket Mine Production Statistics** | **Blanket Mine Production Statistics** |
|  | **Year** | **Tonnes Milled**<br> **(t)** | **Gold Head** <br> **(Feed) Grade** <br> **(g/t Au)** | **Gold Recovery**<br> **(%)** | **Gold Produced**<br> **(oz)** |
| **Year** | **2020** | **597962** | **3.21** | **93.8** | **57899** |
| Quarter 1 | 2021 | 148513 | 2.98 | 93.0 | 13197 |
| Quarter 2 | 2021 | 165760 | 3.34 | 93.8 | 16710 |
| Quarter 3 | 2021 | 179577 | 3.48 | 94.2 | 18965 |
| Quarter 4 | 2021 | 171778 | 3.57 | 94.3 | 18604 |
| **Year** | **2021** | **665628** | **3.36** | **93.9** | **67476** |
| Q1 | 2022 | 165976 | 3.69 | 94.1 | 18515 |
| Q2 | 2022 | 179118 | 3.71 | 93.9 | 20091 |
| Q3 | 2022 | 198495 | 3.53 | 93.6 | 21120 |
| Q4 | 2022 | 208444 | 3.37 | 93.7 | 21049 |
| **Year** | **2022** | **752033** | **3.56** | **93.8** | **80775** |
| January | 2023 | 52752 | 3.25 | 93.4 | 5167 |
| February | 2023 | 52402 | 3.10 | 94.3 | 4928 |

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Gold production for the Quarter was 13.1% higher than the comparable quarter due to a 21.3% increase in tonnes milled. Gold production for the Year was 19.7% higher than 2021. Production for 2022 was a new record and exceeded the Company's guidance for the Year. Tonnes milled and grade are discussed in section 4.4 of this MD&A; gold recoveries are discussed in section 4.5 of this MD&A.

An ore stockpile of approximately 2,500 tonnes (December 2021: 1,714 tonnes) existed at Quarter end due to the rate of mining and hoisting exceeding the milling capacity for much of 2022.

Production in January and February was adversely affected by a several factors including the temporary failures of certain items of equipment and the scaling of the hanging wall in several areas which has caused blockages in the ore handling system. Management is confident that the remediating measures that have been taken will result in a recovery in production such that Blanket will achieve its production guidance for 2023 of between 75 and 80,000 ounces of gold.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.4** **Underground** 

Tonnes milled in the Quarter were 21.3% higher than the comparable quarter; the Year was 13.0% higher than 2021. The increased production is due to the commissioning of the Central Shaft at the end of March 2021; Central Shaft currently handles most of the development waste, which creates capacity at No. 4 Shaft to hoist ore. From the end of the Quarter the Central Shaft was hoisting a combination of waste and ore.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.5** **Metallurgical Plant** 

Recoveries in the Quarter were 93.7% compared to 94.3% in the comparable quarter; recoveries in the Year were 93.8% compared to 93.9% in 2021.

Capacity constraints in the metallurgical plant were alleviated in the Quarter due to the commissioning of the new ball mill (BM10) and the repair of BM7. Power cuts and repairs and maintenance to the primary, secondary crushers and the gearbox of BM8 reduced the tonnes milled during the Quarter.

The installation of BM10 and repairs increased the metallurgical production capacity to 2,400 tonnes per day. The increased milling capacity enabled Blanket to increase tonnage milled from 1,976 tonnes per day during June, 2022 to 2,351 tonnes per day.

During the Quarter, Blanket finished construction of a conveyor and crushing system to feed ore from the Central Shaft to a primary crusher from which it will be transported to the metallurgical plant which is located approximately 800 metres away, close to the No. 4 Shaft. The project was commissioned in November 2022.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.6** **Production Costs** 

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

i. **On-mine cost per ounce <sup>7</sup>**, which shows the on-mine costs of producing an ounce of gold and includes direct labour, electricity, consumables and other costs that are incurred at the mine including insurance, security and on-mine administration;

ii. **All-in sustaining cost per ounce <sup>7</sup>**, which shows the on-mine cost per ounce *plus* royalty paid, additional costs incurred outside the mine (i.e. at offices in Harare, Johannesburg and Jersey), costs associated with maintaining the operating infrastructure and resource base that are required to maintain production at the current levels (sustaining capital investment), the share-based expense (or credit) arising from the LTIP awards less silver by-product revenue; and

iii. **All-in cost per ounce <sup>7</sup>**, which shows the all-in sustaining cost per ounce *plus* the costs associated with activities that are undertaken with a view to increasing production (expansion capital investment).

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| | | | | |
|:---|:---|:---|:---|:---|
| **Cost per Ounce of Gold Sold**  | **Cost per Ounce of Gold Sold**  | **Cost per Ounce of Gold Sold**  |  |  |
| **(US$/ounce)** | **(US$/ounce)** | **(US$/ounce)** |  |  |
|  | **3 months ended** <br> **December 31** | **3 months ended** <br> **December 31** | **12 months ended** <br> **December 31** | **12 months ended** <br> **December 31** |
|  | 2021 | **2022** | 2021 | **2022** |
| On-mine cost per ounce<sup>8</sup> | 740 | **814** | 742 | **735** |
| All-in sustaining cost per ounce<sup>8</sup> | 864 | **964** | 856 | **878** |
| All-in cost per ounce<sup>8</sup> | 1533 | **1678** | 1427 | **1588** |

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A reconciliation of costs per ounce to IFRS production costs is set out in section 10.

**On-mine cost**

On-mine cost comprises labour, electricity, consumables, and other costs such as security and insurance. Production costs are detailed in note 9 to the Consolidated Financial Statements. On-mine costs include the procurement margin paid to CMSA. CMSA purchasing represents a fair value that Blanket would pay for consumables if they were sourced from a third party.

On-mine cost per ounce for the Quarter was 10% higher than the comparable quarter due to the increased production costs as discussed in section 3 of this MD&A. On-mine cost increases were partly offset by a lower electricity charge due to the free test electricity from the solar plant during its commissioning phase (Nov-Jan) and the installation of two autotap changers on the No. 4 Shaft incoming electricity supply line which reduced the frequency of power interruptions resulting from power surges and significantly reduced the generator use to support production and hence the power expense incurred during the Quarter.

On-mine cost per ounce for the Year are within the guidance range of between $669 to $736 per ounce.

**All-in sustaining cost**

All-in sustaining cost excludes the intercompany procurement margin as this reflects the consolidated cost incurred at the Group level. The all-in sustaining cost per ounce for the Quarter and the Year were 11.5% and 2.6% higher respectively than the comparable periods due to the higher administrative costs as discussed in section 3 of this MD&A as well as higher sustaining capital expenditure. Inventory write downs of drill rigs were excluded from all-in sustaining cost as the cost is not representative of normal production costs but rather the discontinuation of spares for the particular type of drill rig and spares purchased. The drill rig and spares were written down to net realisable value in the Quarter. All-in sustaining cost per ounce for the Year of $878 per ounce was below the guidance range of between $880 to $970 per ounce (excluding CSR expenditure).

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*<sup>8</sup>On-mine cost per ounce, all-in sustaining cost per ounce and all-in cost per ounce are non-IFRS measures. Refer to section 10 for a reconciliation of these amounts to IFRS.* 

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**All-in cost**

All-in cost includes investment in expansion projects at Blanket which remained at a high level in the Quarter due to the continued investment, as discussed in section 4.7 of this MD&A. All-in cost does not include pre-feasibility investment in exploration and evaluation projects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.7** **Capital Projects** 

The main capital development project is the infrastructure which will allow for production at 30 and 34 levels below the current operations; another level (38 level) is intended to be added in due course via a decline construction. Central Shaft is currently being used to hoist development waste, people and material – thereby freeing up capacity at No. 4 Shaft to hoist ore. Work in the Quarter at Central Shaft included construction of the grizzly rock passes at the ore passes on 26 and 30 levels that is 50% complete, mining of the clear and dirty water sumps at 34 level, and the completion of the raise boring return airway connecting 30 and 34 level and the conveyor and primary crushing plant on surface. Development from Central Shaft has continued northwards and southwards on 26, 30 and 34 levels towards AR South and Eroica. The total development metres achieved in the Quarter was 582 metres compared to 1,527 metres in the previous quarter and the budgeted advance of 800 metres.

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

● Eroica Decline 3: this decline will continue down to the 30 and 34 levels (990m and 1,110m below collar, respectively) and will connect to the haulages from Central Shaft. Progress in the Quarter was stopped at 870 metres to allow for level development to take place;

● 930-meter haulage: this haulage was mined from the bottom of decline 4 in the Blanket section designed to facilitate the opening up and development of the BQR and 3 Orebody zones. This work has been accomplished successfully and the updip development has since linked to 870m level some 60m above. This connection has improved access and ventilation allowing for rapid strike development to take place on multiple sublevels. It is currently ongoing along the 2 orebody section. This is an area with higher than average mine grades.

The Caledonia board has approved approximately $3 million capital programme to address the remaining issues relating to the electricity supply from the grid which includes installing capacitors to improve the power utilization efficiency and installing further autotap changers to stabilize the power at Central Shaft. The table below shows spending on capital development projects for the twelve months to the end of the Quarter:

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| | |
|:---|:---|
| **Capital development**  | **$**'**m** |
| Central Shaft incl. infrastructure development | 9.7 |
| Capital development ends | 5.7 |
| Power | 5.6 |
| **TOTAL** | **21.0** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.8** **Indigenisation** 

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 and received a Certificate of Compliance from the Zimbabwe Government which confirms that Blanket is fully compliant with the *Indigenisation and Economic Empowerment Act.*

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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 December 31, 2022 was $15.0 million (December 31, 2021: $16.7). The facilitation loans (including interest thereon) are repaid by way of 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. The dividends attributable to GCSOT, which holds 10% of Blanket, were withheld by Blanket to repay the advance dividends which were paid to GCSOT in 2012 and 2013.

The final payment to settle the advance dividend loan to GCSOT was made on September 22, 2021. Dividends to GCSOT after that date are unencumbered.

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 6 to the Consolidated Financial Statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.9** **Zimbabwe Commercial Environment** 

***Monetary Conditions***

The current situation in Zimbabwe can be summarized as follows:

● Although there continues to be a shortage of foreign currency in Zimbabwe, Blanket has had satisfactory access to foreign exchange to date.

● The rate of local currency (known as "ZWL$", "RTGS Dollars" or "RTGS$") annual inflation increased from 61% by January 2022 to 244% by December 2022 which is the highest reading since April 2021. A high rate of RTGS$ inflation has little effect on Blanket's operations because Blanket's employees are paid in US Dollars. A large portion of Blanket's other inputs are denominated in US Dollars.

● Since October 2018, bank accounts in Zimbabwe have been bifurcated between Foreign Currency Accounts ("FCA"), which can be used to make international payments, and RTGS$ accounts which can only be used for domestic transactions.

● On February 20, 2019 the RBZ allowed limited inter-bank trading between currency held in the RTGS$ system and the FCA system. Prior to this, the RBZ had stipulated that a Dollar in the RTGS$ system was worth 1 US Dollar in the FCA system. The interbank exchange rate at each quarter end since the introduction of the interbank rate in February 2019 is set out below.

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| | |
|:---|:---|
| **Interbank Exchange Rates**<br> **(ZWL$:US$1)** | **Interbank Exchange Rates**<br> **(ZWL$:US$1)** |
| February 20, 2019 | 2.50 |
| March 31, 2019 | 3.00 |
| June 30, 2019 | 6.54 |
| September 30, 2019 | 15.09 |
| December 31, 2019 | 16.77 |
| March 31, 2020 | 25.00 |
| June 30, 2020 | 57.36 |
| September 30, 2020 | 81.44 |
| December 31, 2020 | 81.79 |
| March 31, 2021 | 84.40 |
| June 30, 2021 | 85.42 |
| September 30, 2021 | 87.67 |
| December 31, 2021 | 108.66 |
| March 31, 2022 | 142.42 |
| June 30, 2022 | 370.96 |
| September 30, 2022 | 621.89 |
| December 31, 2022 | 684.33 |
| March 17, 2023 | 913.67 |

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● The interbank trading mechanism addressed the most pressing difficulty that emerged after the October 2018 policy implementation, being the erosion of the purchasing power of Blanket's employees due to rapidly increasing retail prices which had an adverse effect on employee morale. In February 2020, the RBZ announced its intention to further liberalise the interbank market with the objective of increasing liquidity and transparency. However, in response to the COVID-19 pandemic, the Minister of Finance subsequently reversed this policy and re-established a fixed exchange rate of ZWL$25:US$1 with effect from March 26, 2020. On June 23, 2020, the RBZ introduced an "auction system" whereby, on a weekly basis, buyers and sellers of local currency and foreign exchange submit tenders which the RBZ uses to determine a revised interbank rate. RTGS$ denominated goods and services are typically priced using a US Dollar reference point to which the informal exchange rate is applied. The official exchange rate does not reflect the local rate of inflation.

● Prior to May 26, 2020, 55% of the sale proceeds were received in US Dollars and the balance was received in RTGS$. From May 26, 2020 gold producers received 70% of their sale proceeds in US Dollars and the balance was received in RTGS$. With effect from 7 January 2021, gold producers received 60% of their revenues in US Dollars and the balance in RTGS$.

● After the reduction in the proportion of revenues received in US Dollars from 70% to 60% with effect from January 7, 2021, Blanket participated in the weekly auction system to access the resultant shortfall in US Dollars. From early June 2021, Blanket and other gold producers were excluded from the weekly auctions on the grounds that they are deemed to be exporters and therefore do not qualify to participate. Blanket subsequently secured allocations of foreign exchange from the RBZ to compensate for its exclusion from the auctions. As at the date of this MD&A, Blanket has not accumulated excess local currency.

● In June 2021 the RBZ announced that companies whose shares are listed on the Victoria Falls Stock Exchange ("VFEX") will receive 100% of the revenue arising from incremental production in US Dollars. Blanket subsequently received confirmation that the "baseline" level of production for the purposes of calculating incremental production is 148.38 Kg per month (approximately 57,000 ounces per annum). In addition, the payment of the increased US Dollar proceeds for incremental production was backdated to July 1, 2021. As Blanket intends to increase its production from approximately 58,000 ounces of gold in 2020 to 80,000 ounces of gold from 2022 onwards, a listing on the VFEX should mean that Blanket will receive approximately 71.5% of its total revenues in US Dollars and the balance in local currency. Accordingly in December 2021 Caledonia obtained a secondary listing on the VFEX. Blanket has received all amounts due in terms of the policy.

● In addition to the higher proportion of revenues payable in US Dollars (as outlined above), gold producers are allowed to directly export incremental production. Management has engaged with relevant parties to obtain the necessary clarifications; Caledonia has been "on-boarded" with a refiner that is accredited to the London Bullion Market Association, and it is expected that the first direct shipment and sale of incremental gold via this new mechanism will be made in the second Quarter of 2023.

● On February 3, 2023, the RBZ issued Exchange control directive RY002/2023 stating that with effect from February 6, 2023, the US$ export retention threshold across all sectors, including companies listed on the VFEX, had been standardized to 75% of export proceeds. The incremental export incentive scheme was also discontinued with effect from February 1, 2023. The Company is currently awaiting a response from the RBZ as to whether the confirmations from the RBZ that the Bilboes project would be able to keep 100% of its revenue in US Dollars remain intact.

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● Throughout these developments and to the date of issue of the Consolidated Financial Statements the US Dollar has remained the primary currency in which the Group's Zimbabwean entities operate and the functional currency of these entities.

● Blanket sells its gold production to Fidelity, which refines and on-sells the gold into the international market. During the first quarter of 2021, responsibility for making payments for gold deliveries from Blanket moved from the RBZ to its gold refining subsidiary Fidelity. This move simplified and improved the mechanism for making payments for gold and the new system is operating well.

***Electricity supply***

The poor quality of electricity supply from the Zimbabwe Electricity Supply Authority ("ZESA") is the most significant production risk at Blanket. During the Year, Blanket experienced interruptions to its power supply from the grid due to an imbalance between electricity demand and supply. The supply from the grid is also subject to frequent surges and dips in voltage which, if not controlled, cause severe damage to Blanket's electrical equipment. In the absence of equipment to control these surges, Blanket switched from grid power to diesel power if it experienced significant power surges – although this allows activity to continue, supplementary generator use increases the production and capital expenditure at Blanket. The continued deterioration in the ZESA supply means that the power factor regularly fell to 60%, which meant that Blanket was effectively paying for 100% of the power but received only 60% and the power supply is subject to outages.

The following initiatives have been implemented or are planned to alleviate the power issues:

● 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.

● On the incoming ZESA supply line at the No. 4 Shaft, Blanket installed two 10MVA auto tap transformers to protect equipment at No. 4 Shaft and the main metallurgical plant from voltage fluctuations on the incoming grid supply. Following the installation of these transformers, Blanket has used less diesel in the production of gold.

● On the incoming ZESA supply line at the Central Shaft, two 10MVA autotap transformers were installed in the Quarter at a cost of $0.9 million. This installation reduced the voltage fluctuations and reduced the power cost and diesel usage allocated to capital projects during the Quarter and thereafter should reduce operational expenditure when the Central Shaft starts to hoist ore.

● Caledonia's 12.2 MWac solar plant, fully commissioned early February 2023, provides approximately 27% of Blanket's average daily electricity demand. The plant has been providing power to Blanket from its initial connection to the Blanket grid in November 2022. The project was completed at a cost of $14.3 million in 2023 (including construction costs and other project planning, structuring, funding and administration costs). This is discussed further in section 4.12.

● Management is in discussion with the Zimbabwean power utility to obtain an improved supply of electricity. This may include an additional supply line that will result in fewer outages and a power supply that has a higher power factor. Blanket may potentially pay a different KWh rate for this supply line. At the date of approval of this MD&A no agreement with ZESA had been concluded.

● Management continues to engage with the Intensive Energy User Group regarding the import of electricity from power producers in Zambia and Mozambique and for this power to be wheeled via the Zimbabwe grid to Blanket. If these discussions are successful, it is expected that Blanket's continuity of electricity supply will improve.

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***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 2021/2022 rainy season has been adequate, and management believes water supply is satisfactory.

***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% if the gold price is above $1,200 per ounce; a royalty rate at 3% applies if the gold price is below $1,200. With effect from January 1, 2020, the royalty is allowable as a deductible expense for the calculation of income tax. On October 9, 2022, the Zimbabwean government announced that 50% of royalty payments will be payable in gold. The announcement was effective October 1, 2022 but no guidance has been received from government on how this will be implemented. Management does not expect a material effect due to this announcement.

● With effect from February 4, 2022 the 5% royalty was payable in the same proportions of currencies as revenues are received.

● Income tax is levied at 24.72% (2021: 24.72%) on taxable income as adjusted for tax deductions. 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. 100% of all capital expenditure incurred in the year of assessment is allowed as a deductible expense. As noted above, the royalty is deductible for income tax purposes with effect from January 1, 2020. The calculation of taxable income is performed using financial accounts prepared in RTGS$, which has significantly reduced the deferred tax liability. Large devaluations in the RTGS$ to the USD would reduce the deferred tax liability.

● 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.10** **Opportunities and Outlook** 

***Blanket Mine***

As discussed in section 4.7, following the commissioning of the Central Shaft, production is expected to be maintained between 75,000 - 80,000 ounces per annum onwards. The Central Shaft will also create the operational flexibility to establish drilling platforms and resume deep-level exploration drilling. Refer to section 5 for the update to Blanket Mine's mineral resources and mineral reserves.

***Production Guidance***

Consolidated production guidance for 2023 is between 87,500 - 97,000 ounces. Production of 12,500 - 17,000 ounces are expected from the Bilboes oxide project and between 75,000 - 80,000 ounces from Blanket.

The critical factors that influence whether the Bilboes oxides project and Blanket can achieve its targets include:

● The Group's ability to maintain an adequate supply of consumables and equipment if there is any resurgence in the COVID-19 pandemic and/or disruption to the supply chain arising from unrest in South Africa;

● Our gold sale proceeds continuing to be received in full and on-time;

● The Group's continuing ability to make local and international payments in the normal course of business; and

● Blanket's ability to manage the erratic supply of electricity from ZESA as proposed in section 4.9 of this MD&A.

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This is forward looking information as defined by National Instrument 51-102. Refer to section 18 of this MD&A for further information on forward looking statements.

***Cost Guidance***

The Group's consolidated on-mine cost per ounce guidance for 2023 is in the range of $900 to $1,000 per ounce; guidance for consolidated AISC is $1,150 to $1,250 per ounce (excluding CSR costs). Bilboes oxide project on-mine cost is expected to be between $1,200-$1,320 per ounce and on-mine cost for Blanket between $770-$850 per ounce (excluding CSR costs). This is forward looking information as defined by National Instrument 51-102. Refer to section 18 of this MD&A for further information on forward looking statements.

***Capital Expenditure***

Capital expenditure at Blanket in 2023 is budgeted to be $30.9 million (inclusive of CMSA's mark-up). Capital expenditures include:

● Tailings storage facility (first phase) - $9.6 million;

● Capital development at 30 and 34 levels - $9.8 million;

● Utilities for the Central Shaft infrastructure - $3.3 million;

● Information technology infrastructure - $1 million;

● Mill and surface engineering - $2.6 million; and

● Staff housing - $500.

The Bilboes oxide project capital expenditures for 2023 amount to $540 as most of the infrastructure to mine the oxide project was in place at acquisition. Exploration capital expenditure at Bilboes, Motapa and Maligreen is budgeted at $3.6 million.

***Strategy***

The immediate strategic focus is to:

● maintain production at Blanket to the targeted rate of between 75,000-80,000 ounces range per annum from 2022;

● re-commence deep level drilling at Blanket with the objective of upgrading inferred mineral resources, thereby extending the life of mine;

● obtain 12,500-17,000 ounces of gold production from the Bilboes oxide project; and

● complete the Caledonia feasibility study on the Bilboes sulphide project to estimate the funding requirements and commence construction of the sulphides project.

Caledonia will continue geological evaluations at the Maligreen and the Blanket Mine claims areas with the objective of increasing the confidence level of the existing estimated mineral resource base as discussed in section 5 of this MD&A. Further geological evaluation plans at Motapa are underway.

Caledonia will evaluate further investment opportunities in Zimbabwe and elsewhere having regard to its funding and management capacity.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.11** **COVID-19** 

Blanket employs over 2,000 employees the vast majority of whom live with their dependents on the mine village. One case of COVID-19 was recorded at Blanket during 2020; 232 cases of COVID-19 were detected in 2021 of which there were, regrettably, two deaths - of an employee and a dependent. Further cases were detected at the Company's offices in Harare, Johannesburg and St Helier. 28 cases of COVID-19 were recorded in 2022. Blanket procured sufficient doses of an approved vaccine for all adult employees and their spouses; as at December 31, 2022, 2,066 of Blanket's employees and 1,030 of the Blanket employees' dependents living on the Blanket site have been vaccinated on site.

Severe effects of COVID-19 have reduced globally and had no significant effect on production, costs or capital projects in the Quarter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.12** **Solar project** 

As noted in section 4.9, Blanket suffers from unstable grid power and load shedding which results in frequent and prolonged power outages. In late 2019 Caledonia initiated a tender process to identify parties to make proposals for a solar project to reduce Blanket's reliance on grid power. In 2020, the Caledonia board approved the project and the company raised $13 million (before commission and expenses) to fund the project through the sale of 597,963 shares at an average price of $21.74 per share. Caledonia's 12.2 MWac solar plant was connected to the Blanket grid in November, 2022 and was fully commissioned in early February 2023 at a construction cost of approximately $14.3 million.

At the date of the approval of this MD&A the plant provides approximately 27% of Blanket's total electricity requirement during the day. Completion of the solar plant coincided with an improvement in the supply of power from the grid which has substantially reduced the amount of diesel consumed. In January 2023 Blanket consumed 18,000 litres of diesel compared to an average of 120,000 litres per month for the whole of 2022. Whilst it is uncertain that this level of improvement will be maintained, the successful implementation of the solar plant is expected to result in a meaningful reduction in diesel usage.

In December 2022, the Caledonia board approved a proposal for CMS (which owns the solar plant) to issue loan note instruments ("bonds") up to a value of $12,000,000. The decision was taken in order 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 after December 31, 2022 up to the date of this MD&A $4.5 million of bonds have been issued to Zimbabwean registered commercial entities.

---

| | |
|:---|:---|
| **5** | **EXPLORATION**  |

---

Caledonia's exploration activities are focussed on Blanket and Maligreen. Management is in the process of evaluating a drilling plan at Motapa.

**Blanket**

There was no deep exploration drilling at Blanket in the Year. Deep level exploration drilling will re-commence after the related development, in the Central Shaft area, has been completed to provide access to new drilling positions.

On February 6, 2023 Caledonia announced that the total measured and indicated mineral resources estimate at Blanket, inclusive of mineral reserves, had increased by 52% to 1,095,000 ounces of gold in 10.72 million tonnes at a grade of 3.18g/t and the total mineral reserves estimate at Blanket had increased by 1% to 395,000 ounces of gold in 3.94 million tonnes at a grade of 3.12g/t compared to the amounts stated in the technical report summary exhibited to the Company's annual report on Form 20-F for the year ending December 31, 2022.

The review of existing data, the completion of Central Shaft and the migration to digital estimation protocols allowed for an increase to the mineral resources estimate. The estimate was based on data at as March 31, 2022 for mineral resources and September 1, 2022 for mineral reserves.

------

A technical report detailing the above information was filed on SEDAR on March 13, 2023.Exploration at Blanket's portfolio of satellite properties was suspended in 2016 so that resources could be re-deployed at Blanket. Since then, the Company has evaluated other investment opportunities in Zimbabwe and has concluded that the satellite properties still owned other than GG are unattractive due to their relatively small size, low grade, limited exploration potential, operating complexity and metallurgical incompatibility with the existing Blanket plant. The GG satellite property remains on care and maintenance.

**Maligreen** 

Caledonia purchased the mining claims over the area known as Maligreen, situated in the Zimbabwe Midlands, for a cash consideration of US$4 million in November 2021. Maligreen is a substantial brownfield exploration opportunity with significant historical exploration and evaluation work having been conducted on the property over the last 30 years. The total area of Maligreen is approximately 550 hectares comprising two historic open pit mining operations which produced approximately 20,000 ounces of gold mined from oxides between 2000 and 2002 after which the operation was closed.

Since Caledonia acquired the Maligreen claims it has been focused on reviewing the geological work conducted at the property with a view to upgrading the mineral resources. On November 7, 2022 the Company published an announcement and an updated technical report on SEDAR<sup>9</sup> updating the estimated mineral resources at Maligreen. The report has an effective date of September 30, 2022 and estimates measured and indicated mineral resources of 8.03 million tonnes at a grade of 1.71g/t containing approximately 442,000 ounces of gold and inferred mineral resources of 6.17 million tonnes at a grade of 2.12g/t containing approximately 420,000 ounces of gold. The upgrade to the mineral resources at Maligreen improves the geological confidence of approximately half the mineral resources from inferred to measured and indicated mineral resources from the previous mineral resources statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **INVESTING** 

An analysis of investments is set out below.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **($**'**000**'**s)** | 2019 | 2020 | 2021 | 2022 | 2022 | 2022 | **2022** | **2022** |
|  | Year | Year | Year | Q1 | Q2 | Q3 | **Q4** | **Year** |
| Total investment – Property, plant and equipment | 20423 | 24778 | 31269 | 12365 | 13258 | 10759 | **11050** | **47432** |
| Blanket | 20128 | 24315 | 29323 | 6601 | 6335 | 11279 | **10052** | **34267** |
| Solar |  | 372 | 1581 | 5744 | 6706 | (748) | **496** | **12198** |
| Other | 295 | 91 | 365 | 20 | 217 | 228 | **502** | **967** |
| Total investment – Exploration and evaluation assets | 172 | 3058 | 1582 | 224 | 412 | 311 | **8451** | **9398** |
| Connemara North |  | 300 | 163 | 4 |  |  | **-** | **4** |
| Glen Hume |  | 2661 | 1176 |  |  |  | **-** | **-** |
| Maligreen |  |  |  | 184 | 364 | 362 | **520** | **1430** |
| Motapa |  |  |  |  |  |  | **7844** | **7844** |
| Other Satellite properties | 172 | 97 | 243 | 36 | 48 | (51) | **87** | **120** |

---

Investment in property, plant and equipment at Blanket is discussed in section 4.7 of this MD&A; investment in solar is as discussed in section 4.12; investment in exploration and evaluation assets is as set out in section 5.

------

*<sup>9</sup> Refer to technical report entitled "Caledonia Mining Corporation Plc Updated NI 43-101 Mineral Resource Report on the Maligreen Gold Project, Zimbabwe dated November 3, 2022 prepared by Minxcon (Pty) Ltd and filed on SEDAR on November 7, 2022.*

------

**Acquisition of Motapa gold exploration project**

On November 2, 2022 Caledonia announced that it had purchased Motapa Mining Company UK Limited, the parent company of a Zimbabwe subsidiary which holds a registered mining lease over the Motapa gold exploration property in Southern Zimbabwe ("Motapa").

Caledonia considers Motapa to be highly prospective and strategically important to its growth ambitions in Zimbabwe in terms of both location and scale. Motapa is a large exploration property which is contiguous to Caledonia's Bilboes gold project.

Motapa was formerly owned and explored by Anglo American Zimbabwe prior to its exit from the Zimbabwean gold sector in the late 1990s and is approximately 75km north of Bulawayo with a mining lease covering approximately 2,200 hectares.

Motapa has been mined throughout most of the second half of the 20th century; Caledonia understands that during this period the region produced as much as 300,000 ounces of gold. Whilst none of the mining infrastructure remains, the evidence of historical mining will provide guidance to our exploration team in best understanding the prospectivity of the region.

The acquisition was accounted for as an asset acquisition as the net assets acquired do not meet the definition of a business. The purchase price of the net assets acquired was allocated to exploration and evaluation assets based on management's estimation of the fair value at acquisition.

The initial purchase price of $1 million was paid on November 1, 2022. Stamp duties of $41 were paid on November 9, 2022. There were no liabilities assumed with the acquisition of Motapa Mining Company UK Limited (and its Zimbabwe subsidiary Arraskar Investments (Private) Limited). The remainder of the purchase price of $7.25m was settled by the issue of loan notes (refer to note 30 of the Consolidated Financial Statements).

The aggregate principal amount of the loan notes is $7.25 million. Interest on the loan notes is compounded monthly at an interest rate of 13% per annum, starting from the date of issue. Interest is payable on the principal amount of the loan notes outstanding from time to time on the date of redemption of the loan notes.

The loan notes are repayable on the following maturity dates:

● $5 million notes to be payable on March 31, 2023 and,

● in respect of the remaining $2.25 million notes to be payable on June 30, 2023 or,

● in each case, such later date as may be agreed, in writing, between Caledonia and each of the noteholders.

**Bilboes Gold**

On January 6, 2023 Caledonia announced that it had satisfied the conditions precedent to purchase Bilboes Gold, the parent company of Bilboes Holdings. The total consideration was agreed at 5,123,044 Caledonia shares, representing approximately 28.5% of Caledonia's fully diluted equity (although this is subject to adjustment up or down to a maximum of 5,497,293 shares) and a 1% net smelter royalty on the project's revenues.

Bilboes is a large, high grade gold deposit located approximately 75 km north of Bulawayo, Zimbabwe. Historically, it has been subject to a limited amount of open pit mining.

Bilboes has NI43-101 compliant proven and probable mineral reserves of 1.96 million ounces of gold in 26.64 million tonnes at a grade of 2.29 g/t and measured and indicated mineral resources of 2.56 million ounces of gold in 35.18 million tonnes at a grade of 2.26 g/t and inferred mineral resources of 577,000 ounces of gold in 9.48 million tonnes at a grade of 1.89 g/t.

The company understands that the project has produced approximately 288,000 ounces of gold since 1989.

A feasibility study prepared by the vendors indicates the potential for an open-pit gold mine producing an average of 168,000 ounces per year over a 10-year life of mine.

Following completion of the transaction in January 2023, Caledonia is commisionining its own feasibility study to identify the most judicious way to commercialise the project to optimize shareholder returns. One approach that is being considered is a phased development which would minimise the initial capital investment and reduce the need for third party funding.

------

Caledonia has commenced the oxide project that is expected to be cash positive within 6 months of the commencement of work on the oxide project and will start generating revenues by the end of the first quarter of 2023. This also has the benefit of partially pre-stripping the area for the main development of the project.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.** **FINANCING** 

Caledonia financed all its operations using funds on hand and funds generated by its operations, and Blanket's overdraft facilities which were as set out below at December 31, 2022.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Overdraft facilities** | **Overdraft facilities** | **Overdraft facilities** | **Overdraft facilities** | **Overdraft facilities** | **Overdraft facilities** |  |
| **Lender** | **Date drawn** | **Principal** <br> **value** | **Balance drawn at** <br> **December 31,** <br> **2022** | **Repayment** <br> **terms** | **Security** | **Expiry** |
| Stanbic Bank Zimbabwe Limited | Sep-21 | RTGS$300 million | Nil | On demand | Unsecured | Feb '24 |
| Stanbic Bank Zimbabwe Limited | Dec-21 | US$1 million | US$0.5 million | On demand | Unsecured | Feb '24 |
| CABS Bank of Zimbabwe | Apr-22 | US$2 million | US$1.3 million | On demand | Unsecured | Nov '23 |
| Ecobank | Nov-22 | US$5 million | US$3.5 million | On demand | Unsecured | Oct '23 |

---

Subsequent to Year end the Stanbic Bank Zimbabwe $1 million overdraft increased to $4 million and the Ecobank facility increased to US$7 million both on the same terms as in the table above. Nedbank Zimbabwe extended an unsecured US$7 million overdraft facility to Blanket in 2023. As at the date of this MD&A $4.5 million of bonds were issued by Caledonia as discussed in section 4.12.

On December 22, 2022 the Company purchased put options to hedge 16,672 ounces of gold from February to May 2023, at a strike price of $1,750 per ounce. The put options were entered into to protect the Company against gold prices lower that $1,750 over the period hedged. Refer to note 14.1 of the Consolidated Financial Statements for the accounting treatment of the put options. At Year end these put options were the only hedging option instruments that have not expired.

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

On February 17, 2022 the Group entered into a zero-cost contract to hedge 20,000 ounces of gold over a period of 5 months from March to July 2022. The hedging contract has a cap of $1,940 and a collar of $1,825, over 4,000 ounces of gold per month expiring at the end of each month over the 5-month period. At the beginning of the Quarter, this hedging arrangement paid $416,000 due to the prevailing gold price that fell below the collar strike price.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **LIQUIDITY AND CAPITAL RESOURCES** 

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Liquidity and Capital Resources** | **Liquidity and Capital Resources** | **Liquidity and Capital Resources** | **Liquidity and Capital Resources** | **Liquidity and Capital Resources** |  |  |
| ***($***'***000***'***s)*** | ***($***'***000***'***s)*** | ***($***'***000***'***s)*** | ***($***'***000***'***s)*** | ***($***'***000***'***s)*** |  |  |
| As at | Sep 30 | Dec 31 | Mar 31 | Jun 30 | Sep 30 | **Dec 31** |
|  | 2021 | 2021 | 2022 | 2022 | 2022 | **2022** |
| Term facility | 70 |  |  |  |  | **-** |
| Gold loan |  | 2866 | 3322 |  |  | **-** |
| Cash and cash equivalents in the statement of cashflows | 13010 | 17152 | 14430 | 10862 | 6167 | **1496** |
| Working capital | 35729 | 35360 | 31530 | 25695 | 23975 | **5986** |

---

Movements in Caledonia's net cash, the 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 7. The Company's liquid assets as at December 31, 2022 plus anticipated cashflows exceeded its planned and foreseeable commitments as set out in section 9.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL COMMITMENTS AND CONTINGENCIES** 

There are no off-balance sheet arrangements apart from the facilitation loans of $15.0 million which are not reflected as loans receivable for IFRS purposes (refer to note 6 of the Consolidated Financial Statements). The Company had the following contractual obligations at December 31, 2022:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Payments due by Period**  |  |  |  |  |  |
| *($*'*000*'*s)* | | | | | |
| **Falling due** | **Within** <br> **1 year** | **1-3 Years** | **4-5 Years** | **After 5** <br> **Years** | **Total** |
| Trade and other payables | 17454 |  |  |  | 17454 |
| Provisions |  | 684 | 598 | 1676 | 2958 |
| Capital expenditure commitments | 4066 |  |  |  | 4066 |
| Lease liabilities | 132 | 181 |  |  | 313 |
| Cash-settled share-based payments | 1188 | 1029 |  |  | 2217 |

---

The capital expenditure commitments relate to materials and equipment which have been ordered by CMSA and which will be sold on to Blanket and ordered by 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 which is discussed in section 4.7 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 and, in respect of the exploration properties, from Caledonia's cash resources as augmented by the placing that was announced on March 23, 2023.

The Group leases property for its administrative offices in Jersey, Harare and Johannesburg; following the implementation of IFRS 16 the Group recognises the liabilities for these leases. As of December 31, 2022, the Group had potential liabilities for rehabilitation work on Blanket – if the mine is permanently closed – at an estimated discounted cost of $2.9 million (December 30, 2021: $3.4 million).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** **NON-IFRS MEASURES** 

Throughout this document, we provide measures prepared in accordance with IFRS in addition to some non-IFRS performance measures. As there is no standard method for calculating non-IFRS measures, they are not a reliable way to compare Caledonia against other companies. Non-IFRS measures should be used along with other performance measures prepared in accordance with IFRS. We define below the non-IFRS measures used in this document and reconcile such non-IFRS measures to the IFRS measures we report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.1** **Cost per ounce** 

Non-IFRS performance measures such as "on-mine cost per ounce", "all-in sustaining cost 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 basis set out by the World Gold Council in a Guidance Note. The table below reconciles non-IFRS cost measures to the production costs shown in the financial statements prepared under IFRS.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Reconciliation of IFRS Production Cost to Non-IFRS Costs per ounce** | **Reconciliation of IFRS Production Cost to Non-IFRS Costs per ounce** | **Reconciliation of IFRS Production Cost to Non-IFRS Costs per ounce** | **Reconciliation of IFRS Production Cost to Non-IFRS Costs per ounce** | **Reconciliation of IFRS Production Cost to Non-IFRS Costs per ounce** | **Reconciliation of IFRS Production Cost to Non-IFRS Costs per ounce** |  |
| **($**'**000**'**s, unless otherwise indicated)** |  |  |  |  |  |  |
|  | **3 months ended** <br> **December 31** | **3 months ended** <br> **December 31** | **3 months ended** <br> **December 31** | **12 months ended** <br> **December 31** | **12 months ended** <br> **December 31** | **12 months ended** <br> **December 31** |
|  | 2021 | 2021 | **2022** | 2021 | 2021 | **2022** |
| Production cost (IFRS) |  | 14178 | **18335** |  | 53126 | **62998** |
| COVID-19 labour and consumable expenses |  | (79) | **(66)** |  | (297) | **(311)** |
| Cash-settled share-based expense |  | (277) | **(412)** |  | (692) | **(853)** |
| Less exploration and safety costs |  | (218) | **(250)** |  | (774) | **(998)** |
| On-mine admin costs, employee incentives and intercompany adjustments |  | (168) | **(1387)** |  | (453) | **(1970)** |
| On-mine production cost\* |  | 13436 | **16220** |  | 50910 | **58866** |
| Gold sales (oz) | | *18160* | ***19926*** | | *68617* | ***80094*** |
| ***On-mine cost per ounce ($/oz)*** | | *740* | ***814*** | | *742* | ***735*** |
| Royalty |  | 1612 | **1716** |  | 6083 | **7124** |
| Exploration, remediation and permitting cost |  |  | **57** |  | 155 | **146** |
| Sustaining capital expenditure<sup>#</sup> |  | 3 | **659** |  | 619 | **1880** |
| Sustaining administrative expenses<sup>&</sup> |  | 1002 | **887** |  | 2320 | **3191** |
| Inventory write down |  |  | **(563)** |  |  | **(563)** |
| Silver by-product credit |  | (32) | **(28)** |  | (122) | **(116)** |
| Cash-settled share-based payment expense included in production cost |  | 277 | **412** |  | 692 | **853** |
| Cash-settled share-based payment expense |  | 51 | **274** |  | 477 | **609** |
| Equity-settled share-based payment expense |  |  | **308** |  |  | **484** |
| Procurement margin included in on-mine cost\* |  | (651) | **(740)** |  | (2401) | **(2163)** |
| All-in sustaining cost |  | 15698 | **19203** |  | 58733 | **70311** |
| Gold sales (oz) | | *18160* | ***19926*** | | *68617* | ***80094*** |
| ***AISC per ounce ($/oz)*** | | *864* | ***964*** | | *856* | ***878*** |
| COVID-19 donations |  |  | **-** |  | 74 | **-** |
| COVID-19 labour and consumable expenses |  | 79 | **66** |  | 297 | **311** |
| Non-sustaining administrative expenses<sup>&</sup> |  | 3432 | **3763** |  | 8082 | **10918** |
| Permitting and exploration expenses |  |  | **18** |  | 74 | **59** |
| Non-sustaining capital expenditure<sup>#</sup> |  | 8629 | **10394** |  | 30650 | **45555** |
| Total all-in cost |  | 27838 | **33444** |  | 97910 | **127154** |
| Gold sales (oz) | | *18160* | ***19926*** | | *68617* | ***80094*** |
| ***All-in cost per ounce ($/oz)*** | | *1533* | ***1678*** | | *1427* | ***1588*** |

---

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<sup>\* 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 all-in sustaining costs and all-in costs as these numbers represent the consolidated costs at a group level, excluding intercompany profit margins.</sup>

<sup>& Administrative expenses relate to costs incurred by the Group to provide services for mining and related activities. From Q4 2022 administrative expenses have been allocated between AISC and all-in cost. Prior years have been restated in the MDA.</sup>

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.2** **Average realised gold price per ounce** 

The table below reconciles "Average realised 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** | **Reconciliation of Average Realised Gold Price per Ounce** | **Reconciliation of Average Realised Gold Price per Ounce** | **Reconciliation of Average Realised Gold Price per Ounce** | **Reconciliation of Average Realised Gold Price per Ounce** | **Reconciliation of Average Realised Gold Price per Ounce** |  |
| **($**'**000**'**s, unless otherwise indicated)** |  |  |  |  |  |  |
|  | **3 months ended** <br> **December 31** | **3 months ended** <br> **December 31** | **3 months ended** <br> **December 31** | **12 months ended** <br> **December 31** | **12 months ended** <br> **December 31** | **12 months ended** <br> **December 31** |
|  | 2021 | 2021 | **2022** | 2021 | 2021 | **2022** |
| **Revenue (IFRS)** |  | 32136 | **34178** |  | 121329 | **142082** |
| Revenues from sales of silver |  | (32) | **(28)** |  | (122) | **(116)** |
| Revenues from sales of gold |  | 32104 | **34150** |  | 121207 | **141966** |
| Gold ounces sold (oz) | | *18160* | ***19926*** | | *68617* | ***80094*** |
| Average realised gold price per ounce (US$/oz) | | *1768* | ***1714*** | | *1766* | ***1772*** |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.3** **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 the Blanket Mine 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 per Share (**"**Adjusted EPS**"**) to IFRS Profit Attributable to Owners of the Company**  | **Reconciliation of Adjusted Earnings per Share (**"**Adjusted EPS**"**) to IFRS Profit Attributable to Owners of the Company**  | **Reconciliation of Adjusted Earnings per Share (**"**Adjusted EPS**"**) to IFRS Profit Attributable to Owners of the Company**  | **Reconciliation of Adjusted Earnings per Share (**"**Adjusted EPS**"**) to IFRS Profit Attributable to Owners of the Company**  | **Reconciliation of Adjusted Earnings per Share (**"**Adjusted EPS**"**) to IFRS Profit Attributable to Owners of the Company**  | **Reconciliation of Adjusted Earnings per Share (**"**Adjusted EPS**"**) to IFRS Profit Attributable to Owners of the Company**  | **Reconciliation of Adjusted Earnings per Share (**"**Adjusted EPS**"**) to IFRS Profit Attributable to Owners of the Company**  |
| **($**'**000**'**s, unless otherwise indicated)** | **($**'**000**'**s, unless otherwise indicated)** | **($**'**000**'**s, unless otherwise indicated)** | **($**'**000**'**s, unless otherwise indicated)** | **($**'**000**'**s, unless otherwise indicated)** | **($**'**000**'**s, unless otherwise indicated)** | **($**'**000**'**s, unless otherwise indicated)** |
|  | **3 months ended** <br> **December 31** | **3 months ended** <br> **December 31** | **3 months ended** <br> **December 31** | **12 months ended** <br> **December 31** | **12 months ended** <br> **December 31** | **12 months ended** <br> **December 31** |
|  | 2021 | 2021 | **2022** | 2021 | 2021 | **2022** |
| Profit for the period (IFRS) |  | 5589 | **(8327)** |  | 23142 | **22866** |
| Non-controlling interest share of profit for the period |  | (1367) | **298** |  | (4737) | **(4963)** |
| **Profit attributable to owners of the Company**  |  | 4222 | **(8029)** |  | 18405 | **17903** |
| Blanket Mine Employee Trust adjustment |  | (109) | **45** |  | (326) | **(517)** |
| Earnings (IFRS) |  | 4113 | **(7984)** |  | 18079 | **17386** |
| *Weighted average shares in issue (thousands)* | | *12323* | ***12831*** | | *12170* | ***12831*** |
| *IFRS EPS (cents)* | | *33.3* | ***(62.2)*** | | *148.6* | ***135.5*** |
| **Add back/(deduct) amounts in respect of foreign exchange movements** |  |  |  |  |  |  |
| Realised net foreign exchange losses |  | 1310 | **2237** |  | 1571 | **8325** |
| - less tax |  | (322) | **(554)** |  | (381) | **(2056)** |
| - less non-controlling interest |  | (129) | **(223)** |  | (153) | **(827)** |
| Unrealised net foreign exchange gains |  | (2153) | **(8)** |  | (2755) | **(12736)** |
| - less tax |  | 467 | **87** |  | 567 | **3042** |
| - less non-controlling interest |  | 216 | **20** |  | 270 | **1265** |
| Adjusted IFRS profit excl. foreign exchange |  | 3502 | **(6425)** |  | 17198 | **14399** |
| *Weighted average shares in issue (thousands)* | | *12323* | ***12831*** | | *12170* | ***12831*** |
| *Adjusted IFRS EPS excl. foreign exchange (cents)* | | *28.4* | ***(50.1)*** | | *141.3* | ***112.2*** |
| Add back/(deduct) amounts in respect of: |  |  |  |  |  |  |
| Reversal of Blanket Mine Employee Trust adjustment |  | 109 | **(45)** |  | 326 | **517** |
| Impairment of property, plant and equipment |  | 325 | **8012** |  | 497 | **8209** |
| Impairment of E&E assets |  | **-** | **467** |  | 3837 | **467** |
| Expected credit losses on deferred consideration on the disposal of subsidiary |  | 761 | **-** |  | 761 | **-** |
| Bilboes pre-operational expenses |  |  | **830** |  |  | **830** |
| Deferred tax |  | 449 | **3495** |  | 5240 | **3796** |
| Non-controlling interest portion deferred tax and impairment |  | (87) | **(1524)** |  | (602) | **(1629)** |
| Inventory write-down |  |  | **563** |  | **-** | **563** |
| - less tax |  |  | **(139)** |  | **-** | **(139)** |
| Fair value losses on derivative financial instruments |  | 133 | **38** |  | **240** | **1198** |
| Adjusted profit |  | 5192 | **5271** |  | 27497 | **28210** |
| *Weighted average shares in issue (thousands)* | | *12323* | ***12831*** | | *12170* | ***12831*** |
| *Adjusted EPS (cents)* | | *42.1* | ***41.1*** | | *225.9* | ***219.9*** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.** **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 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 entered into a consultancy agreement with SR Curtis, a director of the Board, effective July 1, 2022 until December 31, 2023 of a monthly fee of $44.1 as from July 1, 2022 until December 31, 2022 and $12.5 from January 1, 2023 until December 31, 2023. During the period ended December 31, 2022, the Company recorded $265 (2021: $Nil) in consultancy fees.

Related party transactions are detailed in note 35 to the Consolidated Financial Statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.** **CRITICAL ACCOUNTING ESTIMATES** 

Caledonia's accounting policies are set out in the Consolidated Financial Statements which have been publicly filed on SEDAR. In preparing the Consolidated Financial Statements, management is required to make estimates and assumptions that affect the amounts represented in the Consolidated 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 Consolidated Financial Statements.

Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the Consolidated Financial Statements is included in the following notes:

**i)** **Indigenisation transaction** 

The directors of Caledonia Holdings Zimbabwe (Private) Limited ("CHZ"), a wholly owned subsidiary of the Company, performed an assessment, using the requirements of IFRS 10: *Unaudited Condensed Consolidated Consolidated Financial Statements* (IFRS 10), and concluded that CHZ should continue to consolidate Blanket and accounted for the transaction as follows:

● Non-controlling interests ("NCI") are recognised on the portion of shareholding upon which dividends declared by Blanket accrue unconditionally to equity holders as follows:

(a) 20% of the 16% shareholding of National Indigenisation and Economic Empowerment Fund ("NIEEF"); and

(b) 100% of the 10% shareholding of GCSOT.

● This effectively means that NCI is recognised at Blanket at 13.2% of its net assets.

● The remaining 80% of the shareholding of NIEEF is recognised as a non-controlling interest to the extent that its attributable share of the net asset value of Blanket exceeds the balance on the facilitation loans including interest. At December 31, 2022 the attributable net asset value did not exceed the balance on the loan account and thus no additional NCI was recognised.

The transaction with Blanket Employee Trust Services (Private) Limited ("BETS") is accounted for in accordance with IAS 19 *Employee Benefits* (profit sharing arrangement) as the ownership of the shares does not ultimately pass to the employees. The employees are entitled to participate in 20% of the dividends accruing to the 10% shareholding in Blanket if they are employed at the date of such distribution. To the extent that 80% of the attributable dividends exceeds the balance on BETS' facilitation loan they will accrue to the employees at the date of such declaration.

The Employee Trust, which owns BETS, and BETS are structured entities which are effectively controlled and consolidated by Blanket. Accordingly, the shares held by BETS are effectively treated as treasury shares in Blanket and no NCI is recognised.

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**ii)** **Site restoration provisions**

The site restoration provision has been calculated for Blanket based on an independent analysis of the rehabilitation costs performed in 2021. Estimates and assumptions 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. Assumptions, based on the current economic environment, have been made which management believes are a reasonable basis upon which to estimate the future liability. These estimates take account of any material changes to the assumptions that occur when reviewed by management. Estimates are reviewed annually and are based on current regulatory requirements. Significant changes in estimates of contamination, restoration standards and techniques will result in changes to provisions from period to period. Actual rehabilitation costs will ultimately depend on future market prices for the rehabilitation costs which will reflect the market condition at the time the rehabilitation costs are incurred. The final cost of the currently recognized site rehabilitation provisions may be higher or lower than currently provided for.

**iii)** **Exploration and evaluation (**"**E&E**"**) expenditure**

The Group makes estimates and assumptions regarding the possible impairment of E&E properties 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. Estimates and assumptions made may change if new information becomes available. If information becomes available suggesting that the recovery of expenditures is unlikely, the amount capitalized is written off in profit or loss in the period the new information becomes available. The recoverability of the carrying amounts of exploration and evaluation assets depends upon 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.

**iv)** **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 recognizing 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 utilized or sufficient estimated taxable income against which the losses can be utilized.

**v)** **Share-based payment transactions** 

The fair value of the amount payable to employees in respect of share-based awards, which are settled in cash, is recognised as an expense with a corresponding increase in liabilities, over the period over which the employee becomes unconditionally entitled to payment. The liability is re-measured at each reporting date. Any changes in the fair value of the liability are recognised as a personnel expense in profit or loss. Additional information about significant judgements and estimates and the assumptions used to estimate fair value for cash settled share-based payment transactions are disclosed in note 10 to the Consolidated Financial Statements.

**vi)** **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 judgemental decisions and estimates. Financial assets are also reviewed regularly for impairment.

**vii)** **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.

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**viii)** **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 the Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101") relating to geological and technical data of the size, depth, shape and grade of the ore body and suitable production techniques and recovery rates. Such an analysis requires geological and engineering assumptions to interpret the data. These assumptions include:

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

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

● appropriateness of the planned mining methods.

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

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

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

● cut-off grade;

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

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

Changes in reported 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.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.** **FINANCIAL INSTRUMENTS** 

**i)** **Commodity risk** 

Caledonia is exposed to fluctuations in the price of gold because Blanket produces and sells gold oreand receives the prevailing spot price for the gold contained therein. On February 17, 2022 the Company entered into a cap and collar hedging arrangement for 20,000 ounces of gold over a period of 5 months from March to July 2022. The hedging contract had a cap of $1,940 and a collar of $1,825, meaning that, for the 4,000 ounces of gold per month for the period, Caledonia would receive an effective gold price per ounce of not less than $1,825 or greater than $1,940 and would receive an effective spot gold price between these two levels. In July 2022, the cap and collar hedge gave rise to a receipt of approximately $420,000 because the prevailing gold price fell below the collar. On March 9, 2022 in response to a very volatile gold price, the Company purchased a matching quantity of call options at a strike price above the cap in order to limit margin exposure and reinstate gold price upside above the strike price.

The hedging arrangements described above expired at the end of July.

On December 22, 2022 the Company purchased cost put options to hedge 16,672 ounces of gold over a period of 5 months from December 2022 to May 2023 at a strike price of $1,750 per ounce.

Refer to note 14 of the Consolidated Financial Statements for more detail on the hedging agreements.

**ii)** **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 relates to gold bullion sold before the end of the Quarter and VAT receivables. The amount due in respect of bullion sales was settled in January 2023 as it fell due.

Included in cash and cash equivalents is a restricted cash amount of $1 million (denominated in RTGS$) held by Blanket. The amount represents cash earmarked by Stanbic Bank Zimbabwe as a letter of credit in favour of CMSA. The letter of credit was issued by Stanbic Bank Zimbabwe on September 15, 2022 and has a 90-day tenure to settlement. The cash was transferred to CMSA, denominated in South African Rand, on January 13, 2023.

**iii)** **Impairment losses**

None of the trade and other receivables is past due at the period-end date other than a portion of the RTGS$ component of the VAT receivable. Management continues its efforts to recover the RTGS$ component of the VAT receivable either by cash payment and/or offset against other tax amounts payable by Blanket.

**iv)** **Liquidity risk**

All trade payables and the bank overdraft have maturity dates that are expected to mature in under 6 months. The term loans are repayable as set out in section 7.

**v)** **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 Consolidated 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 4.9 of this MD&A, the RTGS$ 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 RTGS$ being subject to further fluctuations in the exchange rate between RTGS$ 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.

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**vi)** **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 manages its interest rate risk by endeavouring to maximize the interest income earned on excess funds while maintaining the liquidity necessary to conduct operations on a day-to-day basis. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.** **DIVIDEND POLICY** 

Following the share consolidation on June 26, 2017, the Company announced on July 4, 2017 an increased quarterly dividend of 6.875 United States cents which has been paid at the end of July, October, January and April thereafter. The dividend of 6.875 US cents per share effectively maintained the dividend at the previous level of 1.375 United States cents per share, after adjusting for the effect of the consolidation

On January 3, 2020, the Company announced a 9.1% increase in the quarterly dividend from 6.875 cents to 7.5 cents per share.

On April 1, 2020, the Company announced the deferral of the quarterly dividend that would ordinarily have been declared and paid in April 2020 due to the uncertainty surrounding the COVID-19 pandemic. On April 29, 2020, the Company announced this dividend would be paid at the end of May 2020 at a rate of 7.5 cents per share.

On June 29, 2020, the Company announced a 13% increase in the quarterly dividend from 7.5 cents to 8.5 cents per share.

On October 1, 2020, the Company announced an 18% increase in the quarterly dividend from 8.5 cents to 10 cents per share.

On January 4, 2021, the Company announced a 10% increase in the quarterly dividend from 10 cents to 11 cents per share.

On April 6, 2021 the Company announced a 9% increase in the quarterly dividend from 11 cents to 12 cents per share.

On July 6, 2021 the company announced an 8% increase in the quarterly dividend from 12 cents to 13 cents per share.

On October 4, 2021 the company announced an 8% increase in the quarterly dividend from 13 cents to 14 cents per share. This seventh increase represents a cumulative 104% increase in the quarterly dividend since October 2019.

On January 4, 2022, the Company announced a dividend of 14 cents per share payable on January 28, 2022.

On April 4, 2022 the Company announced a dividend of 14 cents per share payable on April 29, 2022.

On July 5, 2022 the Company announced a dividend of 14 cents per share payable on July 29, 2022.

On October 3, 2022 the Company announced a dividend of 14 cents per share payable on October 28, 2022.

On December 30, 2022 the Company announced a dividend of 14 cents per share payable on January 27, 2023.

The board will consider the continuation of the dividend and any future increases in the dividend as appropriate in line with other investment opportunities and its prudent approach to risk management including 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.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.** **MANAGEMENT AND BOARD** 

Management and board appointments and resignations during the Year and up to the date of this MD&A were as follows:

● On January 6, 2023, Mr Victor Gapare, previous Chief Executive Officer of Bilboes Holdings, was appointed to the board as executive director.

● On July 1, 2022, Mr Steve Curtis stepped down as Chief Executive Officer; he remains on the board as a non-executive director and is retained as a consultant to the Group until December 2023.

● On July 1, 2022, Mr Mark Learmonth, previous Chief Financial Officer, was appointed as Chief Executive Officer.

● On July 1, 2022, Mr Chester Goodburn, previous Group Financial Manager, was appointed as Chief Financial Officer.

● On May 4, 2022, Mr Gordon Wylie was appointed to the board as an independent non-executive director with effect from May 5, 2022;

● On February 28, 2022, Mr John McGloin resigned from the board as a non-executive director; and

● On January 20, 2022, Mr Dana Roets, Chief Operating Officer, was appointed to the board as an executive director.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16.** **SECURITIES OUTSTANDING** 

At March 23, 2023, being the last day practicable prior to the publication of this MD&A, Caledonia had 17,283,312 common shares issued and the following outstanding options to purchase common shares ("Options") granted in equal amounts to each of the employees of 3PPB LLC being P Chidley and P Durham:

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| | | |
|:---|:---|:---|
| **Number of Options** | **Exercise Price** | **Expiry Date** |
| 10,000 | CAD11.50 | 25-Aug-24 |
| 10,000 | USD 9.49 | 30-Sep-29 |
| 20,000 |  |  |

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The OEICP allows that the number of shares reserved for issuance to participants under the plan, 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.

Awards under the Plan made to executives and certain other senior members of management on January 24, 2022, consisting of a target of 130,380 performance units ("PUs"), are only to be settled in shares. The PUs that vest will be subject to a performance multiplier and a maximum amount of 150% of target PUs could vest. Accordingly, providing for such a maximum amount, Caledonia could grant Options on a further 1,512,761 shares at the date of this MD&A on the assumption that all other outstanding LTIPs are settled in cash at the request of the LTIP holders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.** **RISK ANALYSIS** 

The business of Caledonia contains significant risk due to the nature of mining, exploration and development activities. Caledonia's business contains significant additional risks due to the jurisdictions in which it operates and the nature of mining, exploration and development. Included in the risk factors below are details of how management seeks to mitigate the risks where this is possible.

● **COVID-19 pandemic:** The COVID-19 pandemic had no discernable effect on the Group or its operations during the period under review. The COVID-19 pandemic, and measures that may be taken by governments and other parties to counter the spread of the virus may, *inter alia*, have the following effects on the Company: its workforce may fall ill which could affect operations; restrictions on transport and travel may impede the Company's ability to procure consumables, equipment and services which may affect operations and progress on capital projects; the banking system may not operate effectively which may impede the Company's ability to effect domestic and international payments; it may be difficult to secure a route to market for the gold ore produced by Blanket; and the supply of capital equipment may be affected by production delays at the manufacturers. In response to these risks, management has introduced measures to safeguard its employees from the virus; engaged closely with its customer, Fidelity, regarding access to refiners and the eventual route to market for Blanket's production; and management regularly reviews its financial status and projections. However, it must be recognised that the duration and effects of the COVID-19 pandemic are uncertain and therefore not capable of accurate forecasting.

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● **Liquidity risk:** Caledonia currently has sufficient cash resources and continues to generate sufficient cash to cover all its anticipated investment needs.

● **Availability of foreign currency**: The Company needs access to foreign currency in Zimbabwe so that it can pay for imported goods and equipment and remit funds to Group companies outside Zimbabwe. At prevailing gold prices and the current rate of production the Company has access to sufficient foreign currency to continue normal mining operations and to fully implement the investment plan as scheduled. The Company has established mechanisms to increase the proportion of its revenues it can access in US Dollars. No assurance can be given that sufficient foreign currency will continue to be available.

● **Exploration risk**: The Company needs to identify new resources to replace ore which has been depleted by mining activities and to commence new projects. No assurance can be given that exploration will be successful in identifying sufficient mineral resources of an adequate grade and suitable metallurgical characteristics that are suitable for further development or production.

● **Development risk**: The Company is engaged in the implementation of the Central Shaft project as set out in section 4.7 of this MD&A, as well as other projects including in particular the Bilboes oxides project. Construction and development of projects are subject to numerous risks including: obtaining equipment, permits and services; changes in regulations; currency rate changes; labour shortages; fluctuations in metal prices and the loss of community support. There can be no assurance that construction will commence or continue in accordance with the current expectations or at all.

● **Production estimates**: Estimates for future production are based on mining plans and are subject to change. Production estimates are subject to risk and no assurance can be given that future production estimates will be achieved. Actual production may vary from estimated production for a variety of reasons including un-anticipated variations in grades, mined tonnages and geological conditions, accident and equipment breakdown, changes in metal prices and the cost and supply of inputs and changes to government regulations.

● **Mineral rights:** The Company's existing mining lease, claims, licences, and permits are in good standing. The Company must pay fees etc. to maintain its lease, claims and licences. The Company may not make payments by the required date or meet development and production schedules that are required to protect its lease, claims and licences.

● **Metal prices:** The Company's operations and exploration and development projects are heavily influenced by the price of gold, which is particularly subject to fluctuation. The Company had a hedging arrangement in place for a portion of production for the period from March to July 2022 and entered into a hedging arrangement in December 2022 for December 2022 to May 2023. Management regularly reviews future cash flow forecasts in the context of the prevailing gold price and likely downside scenarios for future gold prices.

● **Increasing input costs**: Mining companies generally have experienced higher costs of steel, reagents, labour and electricity and from local and national government for levies, fees, royalties and other direct and indirect taxes. Blanket's planned growth should allow the fixed cost component to be absorbed over increased production, thereby helping to alleviate somewhat the effect of any further price increases.

● **Illegal mining**: In previous years there were incidences of illegal mining activities on properties controlled by Blanket which resulted in increased security costs and an increased risk of theft and damage to equipment. Blanket has received adequate support and assistance from the Zimbabwean police in investigating such cases. Those properties most at risk from such activity had been sold. With new mining areas having been acquired by the Group the incidence and possibility of illegal mining has increased. The Group is receiving adequate support and assistance from the Zimbabwean police.

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● **Electricity supply**: Zimbabwe produces and imports less electricity than it requires and has insufficient funds to adequately maintain or upgrade its distribution infrastructure. This has resulted in frequent interruptions to the power supply at Blanket. Blanket has addressed the issue of interrupted power supply by installing stand-by generators and constructing a solar plant which provided approximately 27% of Blanket's power requirements. Production at Blanket has also been adversely affected by the instability of the incoming electricity supply. The Company has installed further auto-tap changers to increase the protection against power surges and it has further increased its diesel generating capacity.

● **Water supply**: Blanket uses water in the metallurgical process, most of which is obtained from a nearby dam. Blanket is situated in a semi-arid area and rainfall typically occurs only in the period November to February. The most recent rainy season has been better than average, and management believes there is enough water in the Blanket dam to maintain normal operations until the next rainy season.

● **Succession planning**: The limited availability of mining and other technical skills and experience in Zimbabwe and the difficulty of attracting appropriately skilled employees to Zimbabwe creates a risk that appropriate skills may not be available if, for whatever reason, the current skills base at Blanket is depleted. The Caledonia and Blanket management teams have been augmented so that, if required, it could provide appropriate support to Blanket if this is required.

● **Country risk**: The commercial environment in which the Company operates is unpredictable. Potential risks may arise from: unforeseen changes in the legal and regulatory framework which means that laws may change, may not be enforced, or judgements may not be upheld; restrictions on the movement of currency and the availability of foreign currency at a realistic exchange rate to make payments from Zimbabwe; risks relating to possible corruption, bribery, civil disorder, expropriation or nationalisation; risks relating to restrictions on access to assets and the risk that the Zimbabwe Government is unable to pay its liabilities to Blanket. Management believes that it has minimised such risks by complying fully with all relevant legislation, by obtaining all relevant regulatory permissions and approvals and by regular and proactive engagement with the relevant authorities.

● **Gold marketing arrangements:** In terms of regulations introduced by the Zimbabwean Ministry of Finance in January 2014, all gold produced in Zimbabwe must be sold to Fidelity, a company which is owned by the RBZ. In 2021, the Ministry of Finance announced a modification to the regulations that allow gold producers who are listed on the VFEX to export their incremental gold production. The Company has clarified the mechanism whereby this revised policy may be affected and it is hoped that the first shipments and direct sale of gold in terms of these mechanisms may be effected in the second quarter of 2023. The responsibility for making payments to gold producers was transferred from the RBZ to Fidelity in early 2020 following which Blanket has received payments more promptly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18.** **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; and future dividend payments. This forward-looking information is based, in part, on assumptions and factors that may change or prove to be incorrect, thus causing actual results, performance or achievements to be materially different from those expressed or implied by forward-looking information. Such factors and assumptions include, but are not limited to: failure to establish estimated 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 mineralization being inaccurate, success of planned metallurgical test-work, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, changes in government regulations, legislation and rates of taxation, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors.

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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 Fidelity, 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 parametres to deal with un-anticipated economic or other factors, risks of increased capital and operating costs, environmental, safety or regulatory risks, expropriation, the Company's title to properties including ownership thereof, increased competition in the mining industry for properties, equipment, qualified personnel and their costs, risks relating to the uncertainty of timing of events including targeted production rate increase and currency fluctuations. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19.** **CONTROLS** 

The Company has established and maintains disclosure controls and procedures ("DC&P") designed to provide reasonable assurance that material information relating to the Company is made known to the Chief Executive Officer and the Chief Financial Officer by others, particularly during the period in which annual filings are being prepared, and that information required to be disclosed in the Company's annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified by such securities legislation.

The Company's management, along with the participation of the Chief Executive Officer and the Chief Financial Officer, have evaluated the effectiveness of the Company's DC&P as of December 31, 2022. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that, at December 31, 2022, the Company's DC&P were effective.

The Company also maintains a system of internal controls over financial reporting ("ICFR") designed under the supervision of the Company's Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS; however, due to inherent limitations, ICFR may not prevent or detect all misstatements and fraud. The board of directors approves the financial statements and ensures that management discharges its financial responsibilities. The Audit Committee, which is composed of independent directors, meets periodically with management and auditors to review financial reporting and control matters and reviews the financial statements and recommends them for approval to the board of directors.

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The Company's management, including the Chief Executive Officer and the Chief Financial Officer, is responsible for establishing and maintaining adequate ICFR and evaluating the effectiveness of the Company's ICFR as at each fiscal year end. Management has used the 2013 Internal Control–Integrated Framework from the Committee of Sponsoring Organizations of the Treadway Commission (the "COSO") to evaluate the effectiveness of the Company's ICFR at December 31, 2022. Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that at December 31, 2022, the Company's ICFR was effective.

There have been no changes in the Company's ICFR during the period ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company's ICFR.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**20.** **QUALIFIED PERSON** 

Mr. Dana Roets (B Eng (Min), MBA, Pr. Eng, FSAIMM, AMMSA) is the Company's qualified person as defined by Canada's National Instrument 43-101. Mr. Roets is responsible for the technical information provided in this MD&A except where otherwise stated. Mr. Roets 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.