Zimpapers Logo

Oliver Kazunga, Acting Business Editor 

CALEDONIA Mining Corporation says it sees a positive outlook on its locally-owned Blanket Mine and has increased its quarterly dividend by 9,1 percent to 6,875 cents per share on the back of improved financial performance. 

The positive outlook and increased quarterly dividend is underpinned by the gold miner’s financial performance that has been fortified by increased production and higher gold price.

Caledonia Mining Corporation chief executive officer, Mr Steve Curtis last week said:

“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. 

“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 at September 30, 2019, Caledonia had cash estimated at US$8 million. 

In 2014, Caledonia adopted a quarterly dividend policy to maximise shareholder value.

Mr Curtis said as they approach the end of their five-year investment programme at Blanket Mine, the mining group anticipates the rate of capital expenditure would begin to reduce from the mid-year giving them greater flexibility to consider deploying some of the cash reserves on an increased dividend. 

Blanket Mine plans to increase production from 54 511 ounces of gold in 2018 to an estimated 75 000 ounces next year and nearly 80 000 ounces in 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 Mr Curtis.

He said Caledonia’s board will review the group’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.

Caledonia’s primary asset is a 49 percent interest in Blanket Mine. In November 2018, Caledonia announced that it had signed a legally binding sale agreement to increase its holding in Blanket Mine to 64 percent, subject to receipt of, among other things, regulatory approvals. 

Caledonia’s shares are listed on the New York Stock Exchange in America as well as on the Toronto Stock Exchange in Canada. -@okazunga