All that glitters is gold for Caledonia

Caledonia Mining, which counts Zimbabwe-based Blanket Mine as its biggest asset, is bullish about its earnings prospects in the years ahead and this week announced another increase in its quarterly dividend by 10 percent to US$0.11 a share.

The latest increase becomes the 4th increase by the miner since October 2019. This makes it a 60 percent cumulative increase from the level of US$0.06875 cents since October 2019.

In announcing the dividend on Monday, Steve Curtis, chief executive officer, said:

“We are pleased to announce an additional 10 per cent increase in our quarterly dividend, the fourth increase in the past 15 months representing a cumulative 60 per cent rise in the dividend since the first increase in October 2019.”

He said the decision by the Board to increase the dividend reflects the miners continued and increasing confidence in the outlook for its business. Caledonia’s main asset is Blanket Mine in Zimbabwe.

“As we reported in our third quarter 2020 results, the business continues to perform well supported by strong production and a firm gold price,” Curtis said.

He said as the miner approaches the end of the six-year investment programme at Blanket Mine, it expect the combination of rising production and declining capital investment over the next two years will give the scope to consider further increases in the dividend in addition to providing funding for investment in new projects, including the exploration prospects at Glen Hume and Connemara North as announced on December 10 and 17, 2020, respectively.

At Blanket Mine, Caledonia is working on a Central Shaft that is scheduled to be commissioned during the first quarter of 2021. The miner target production of 61,000 to 67,000 ounces of gold in 2021.

The target production is expected to increase to 80,000 ounces of gold per annum from 2022.

Increasing production, a high gold price and good cost control have continued to result in increased cash generation which has given the Board confidence that the business can sustain a higher level of dividend distributions before the benefits of Central Shaft are realised, the miner said.-ebusinessweekly.co.zw