Canadian miner confident about Zim operations: dividend up by 9%

By ZBC Reporter

RISING Gold prices and increased production at Blanket Mine in Gwanda have resulted in Canada based Caledonia Mining declaring an increased dividend of 9 percent.

Caledonia has a 49 percent share ownership in Blanket Gold Mine and has since sealed an agreement to increase the shareholding to 64 percent subject to regulatory approvals.

Caledonia management expressed increased confidence in the company’s operations in the country in a statement Friday.
The 9% increase in its quarterly dividend, has also been attributed to increased production in addition to the higher gold prices.

“I am pleased to announce a 9.1 per cent increase in the dividend which reflects our increased confidence in the outlook for our business,” said CEO Steve Curtis.

“As we reported in mid-November 2019 when we published the results for the third quarter of 2019, our financial performance has improved due to increased production and the continued higher gold price. This improvement has continued through the final quarter of 2019.

“As we approach the end of the five-year investment programme at Blanket Mine, we anticipate the rate of capital expenditure will begin to reduce from the middle of 2020, which gives us greater flexibility to consider deploying some of our cash reserves on an increased dividend.”

Curtis said the company is on course to increase output from about 50,000 ounces per year to about 80,000 ounces by 2022.

“We expect the Central Shaft to be commissioned in the fourth quarter of 2020; thereafter we look forward to further increases in operating cash flow as production increases to the target rate of 80,000 ounces of gold per annum from 2022, as capital expenditure falls further and we begin to realise the operational efficiencies arising from the new shaft,” said Curtis.

“The Board will review Caledonia’s future dividend distributions as appropriate while considering the balance between delivering returns to shareholders, pursuing the significant growth opportunities within Zimbabwe and maintaining a prudent approach to financial management.”

Operations at Blanket gold mine were also affected by power supply and foreign currency challenges but by November last year Caledonia said it was benefiting from a revised national electricity tariff which allowed for the funding of imported electricity provided it was used exclusively to supply participating mining companies.

The company has said it would consider investing in new opportunities in Zimbabwe after its US$44 million five-year investment programme at Blanket Mine which is nearing completion.