Caledonia grows quarterly dividend

Source: Caledonia grows quarterly dividend | Herald (Business)

Caledonia said it was paying less than half the current quarterly dividend three years ago, but the annualised dividend now equates to a yield of approximately 6 percent.

Enacy Mapakame-Business Reporter

The Victoria Falls Stock Exchange (VFEX) listed resources group, Caledonia Mining Corporation Plc has declared a dividend of US14 cents for the third quarter, in line with its dividend policy that seeks to maximize shareholder value.

Caledonia’s board adopted the strong dividend policy in 2014 and indicated it will consider future increases in the dividend in line with its prudent approach to risk management.

Gold is a strategically key mineral for Zimbabwe, given the mineral ranks as the single largest export earner for the mineral rich Southern African country.

Deliveries to the country’s sole authorised gold buyer, Fidelity Printers and Refiners jumped 41 percent to 22,3 tonnes in the eight months to August 2022. Government set a target of 35 tonnes this year after production jumped 55,5 percent to 29,6 tonnes last year.

“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. 

“The dividend continues to be a central part of our strategy, as we continue to manage returning money to shareholders with production growth and de-risking the business from being a single asset producer,” said chief executive officer Mark Learmonth.

The resources group, which is the parent company of Gwanda based gold mining firm – Blanket Mine – is on track to hit its target production of 73 000 to 80 000 ounces of gold in 2022.

This comes as the group is working towards becoming a multi-asset gold producer. The group has also indicated it will continue evaluating opportunities in Zimbabwe for further investments.

“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.

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.

Market watchers are upbeat the resources group will maintain its growth trajectory on the back of increased production and enhanced efficiencies.

Caledonia successfully completed its VFEX listing process in December 2021 leaving it eligible to benefit from the incremental production initiative backdated to 1 July 2021.

Baseline production target for the mine has been set to 57 000 ounces annually with anything produced beyond that exempt from export surrender requirements.

The group is also expected to benefit from its cost cutting measures, for instance on energy cost.

During the half year to June 30, 2022, Blanket Mine’s gold production was 38,605 ounces, representing a 29 percent increase on the same period last year as the central shaft programme matured following a five-year, US$64 million development phase.

During the second quarter, Blanket recorded a 20 percent increase to 20,091 ounces of gold, which was a new production record for any quarter.

Zimbabwe Situation