© ZIMBABWE-FOCUSED gold miner Caledonia Mining Corporation (Caledonia) has announced a 9,1 percent increase in its quarterly dividend from US$0,068 to US$0,075 on each of the company’s common shares.
The New York Stock Exchange firm’s financial performance has improved significantly in the last few months due to increased production and the continued higher gold price and target production is expected to reach 80 000 tonnes from 2022.
Caledonia’s chief executive Steve Curtis said the rise in dividend payments reflected the resource firm’s increased confidence in its business outlook.
“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.”
The central shaft is expected to be commissioned in the fourth quarter of 2020, after which the company can begin to increase production to meet its targets.
“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,” he said.
Curtis said 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.”
Caledonia, which has a market capitalisation of US$82,8 million, owns a 49 percent stake in Blanket Mine.
The Gwanda-based mine’s target production for 2019 is between 50 000 and 53 000 ounces and is planning to increase production to approximately 75 000 ounces in 2021 and approximately 80 000 ounces in 2022.