Caledonia declares US$0.14 dividend as production remains strong
Harare (New Ziana) – Gold producer Caledonia Mining, which operates Blanket Mine in Gwanda, Matabeleland South province on Monday rewarded its shareholders with a quarterly dividend of US$0.14 per share, as production remained strong and on course to reach its target of between 73 000 to 80 000 ounces.
Announcing the dividend, Caledonia chief executive officer Mark Learmoth said the dividend payment was a central part of the company’s strategy, which entails returning money to shareholders in tandem with production growth.
“Gold production so far this year has been strong, exceeding our expectations, and we are on track to hit the top end of our guidance range of 73,000 to 80,000 ounces,” he said.
“Three years ago, the company was paying less than half the current quarterly dividend and at the current share price, the annualised dividend equates to a yield of approximately 6 percent.”
Learmoth said Caledonia was also de-risking the business from being a single asset producer.
After acquiring Maligreen gold fields in Gweru last year, Caledonia also added Bilboes Mine to its growing portfolio in July, after agreeing a US$53.3 million takeover of the mine, which is located 75 kilometres north of Bulawayo.
Caledonia expects to restart the oxides operation at Bilboes under the terms of a tribute arrangement with a view to creating a cash-generative operation within approximately six months.
“In July, Caledonia announced that it had signed an agreement to purchase Bilboes Gold Limited, which is the holding company for a large, high-grade, open-pittable gold resource.
“The completion of the transaction is subject to several conditions, which we are currently working on, but once achieved we can prepare a feasibility study to identify the most judicious way to commercialise the project with regard to the availability of funding on acceptable terms,” he said.
“This is an exciting time for the business as we pivot the Company towards our long-term vision of becoming a multi asset gold producer.”
Tod fully develop Bilboes, Caledonia has lined up a $250 million investment as it pursues an aggressive growth strategy in Zimbabwe.
The US$250 million investment, to be spread over three years and to be made using a mixture of funding options including loans, is expected to build a 170 000 ounce a year mine.
The planned expansion by Caledonia is one of several projects that are expected to spur the attainment of a US$12 billion local mining industry by 2023.
Under the road-map, gold production of 100 tons and earnings of US$4 billion per annum are expected to anchor the attainment of the US$12 billion milestone.
The milestone is expected to be achieved through sustained production growth across high value minerals such as gold, platinum, diamonds, lithium and chrome.
At least US$3 billion in annual export earnings is expected from platinum at a production rate of 2.4 million ounces a year, while chrome, iron ore and steel are expected to contribute US$1 billion, the same as diamonds at a production rate of over 11 million carats per annum.
Coal and hydro-carbons are expected to contribute US$1 billion, lithium US$0.5 billion while other minerals would add US$1.5 billion.