Harare (New Ziana) – Caledonia Mining Corporation continues to rise above the current economic challenges affecting Zimbabwe, declaring a 9.1 percent dividend increase in the 4th quarter of 2019 and remaining on course to commission a multi-million dollar expansion project by the end of this year.
An inflationary environment and power shortages among other challenges have affected operational efficiencies of most local firms.
But, Caledonia, which operates the Blanket gold mine in Gwanda, continues to post impressive production results and on Friday declared an increased quarterly dividend of seven-and-a- half United States cents (US$0.075) on each of the company’s common shares up from 6.875 cents.
The company is also expecting to commission a new $18 million central shaft this year to increase gold output to 80 000 ounces per annum by 2022.
Caledonia chief executive officer, Steve Curtis said the new dividend was a direct result of increased production and firm gold prices.
He said the improvement in the dividend was also a reflection of the firm’s increased confidence in its business.
“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,” he said.
“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 operational efficiencies and increased production arising from the new shaft were expected to yield further improved cash flows.
“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,” he said.
Blanket Mine plans to increase production from 54 511 ounces of gold in 2018 to approximately 75 000 ounces in 2021 and 80 000 ounces in 2022.
For 2019, the mine was targeting to produce between 50 000 and 53 000 ounces of gold.
Government is targeting gold production of 100 tons and earnings of US$4 billion per annum to anchor the attainment of a US$12 billion local mining industry by 2023.