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Business Reporter
GWANDA-based gold miner Blanket Mine is targeting a $5,1 million additional income by the end of the year from an Export Credit Incentive (ECI) that has been increased to 10 percent from 2,5 percent.

In the 2018 monetary policy statement, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya raised the ECI paid to all gold producers with a view to boost the mineral’s output.

Caledonia Mining Corporation, which owns 49 percent stake in the Matabeleland South-based gold producer said its subsidiary has since received funds commensurate with the increased level of ECI for the yellow metal produced in February.

“The increase in the ECI from 2,5 percent to 10 percent is expected to amount to additional income of approximately $5,1 million for the year to December 31, 2018, assuming that the ECI remains in place for 2018 and assuming a gold price of $1 260 per ounce,” said Caledonia.

As at December 31, 2017, Caledonia had estimated cash amounting to $12,5 million.

“The incremental revenue is likely to have a material positive impact on Caledonia’s forecast earnings per share for the year.

“Recent EPS guidance issued in Caledonia’s 2017 Management Discussion and Analysis of the financial year 2017 results on March 21, 2018 of between 130 and 150 cents per share was based on an ECI of 2,5 percent,” said Caledonia.

The mining group has revised its earnings per share guidance assuming the increased ECI is expected to be between 165 and 190 cents per share.

Caledonia chief executive officer Mr Steve Curtis said:

“The increase in the ECI from 2,5 percent to 10 percent is a further significant step by the Zimbabwean Government to boost investment and production in the gold mining sector.

“It is very pleasing to see the Government delivering on previous policy statements to promote investment in the sector.”

Mr Curtis said Blanket Mine is investing $4 million in exploration and metallurgical test work on its satellite properties.

“As the business environment in Zimbabwe continues to improve we look forward to evaluating further opportunities to grow production,” said Mr Curtis.

The gold producer this year targets production levels of between 56 000oz and 59 000oz and by 2021 output is expected to increase to 80 000oz.

In the first quarter of the year, Blanket Mine produced 12 924oz up from 12 794oz during the same period in 2017. Last year the mine produced 56 135oz.