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Business Reporter

Caledonia Mining Corporation Plc has set an ambitious annual production target of 80 000 ounces by 2021 at its Zimbabwean mining unit, Blanket mine from 42 800 ounces produced in 2015. Blanket’s target production for 2016 is approximately 50 000 ounces and since dollarisation the mining company’s production has been on a growth trajectory.Positive results (either financial or output) posted by the company since 2009 at the back of the prevailing subdued mineral prices, the company has been able to pay out dividend to its shareholders.

The company’s board of directors yesterday declared an increased quarterly dividend of one and three eighths United States cents ($0,01375) on each of the company’s common shares.

The increased dividend represents an annualised dividend of 5,5 cents per share and is an increase of 22 percent from the previous annualised dividend of 4,5 cents per share.

“The declaration of the increased dividend reflects the company’s confidence that its earnings and cash generation will increase. In late March 2016, production started from the Blanket ore bodies below 750 meters following completion of the No. 6 Winze.

“In March 2016, the decline development into the AR South ore body below 750 meters was also completed and further improved Blanket’s operational flexibility. I am now increasingly confident that the projected production targets of 50 000 ounces in 2016 and 65 000 ounces in 2017 will be realised,” said Caledonia chief executive Steve Curtis.

Mr Curtis said the planned increases in production in 2016 and 2017 are expected to result in a lower average cost of production as fixed costs are spread across an increased number of gold ounces.

He said approximately 80 percent of Blanket’s costs and 100 percent of Caledonia’s costs are fixed and the marginal cost is approximately $160 per ounce. At March 31, 2016, Caledonia had net cash of $8,8 million.

“Notwithstanding the increased dividend, Caledonia intends to retain a robust balance sheet so that it can take advantage of further investment opportunities,” said Mr Curtis.

The mining firm’s rate of production is expected to increase over the course of 2016 as production from the No. 6 Winze under the company’s Revised Investment Plan increases.

The Toronto Stock Exchange listed Caledonia Mining Corporation in 2014 announced its plan to invest approximately $70 million at Blanket mine for the period 2015-2020.

The funding was earmarked for expansion and infrastructural improvements that will allow an efficient and sustainable production build up for the mine.

All the CAPEX is being funded from Blanket’s internal cash flows and existing facilities.