Zimpapers Logo

Golden Sibanda Senior Business Reporter
TORONTO Stock Exchange listed miner, Caledonia Mining Corporation, anticipates a $5,1 million boost in income for its local gold mining unit, Blanket Mine, for the year to December 31, 2018, after the central bank quadrupled the export credit incentive (ECI) for gold miners.

Reserve Bank of Zimbabwe (RBZ) Governor John Mangudya, announced in his 2018 monetary policy statement that the export credit incentive will be maintained and increased to encourage exporters to continue exporting, after export earnings rose 36 percent in 2017.

Dr Mangudya said in February this year that the Zimbabwe’s foreign currency inflows were on a positive trajectory, largely on account of increasing export receipts and that it was critical to sustain this momentum.

Caledonia said its Gwanda based unit, Blanket Mine had already received funding for gold delivered in February, 2018, adding that the receipts for the bullion reflected the increase in the level of the export credit incentive for gold miners from 2,5 percent to 5 percent.

The export credit incentive was also increased for other major export earners; from 2,5 percent to 12,5 percent for tobacco growers and 2,5 percent to 10 percent for horticulture, cotton and macadamia exporters, starting this year.

The increase in the export incentive from 2,5 percent to 10 percent is expected to amount to additional income of approximately $5,1 million for the year to December 31, 2018 assuming that the ECI remains in place for 2018 and assuming a gold price of $1,260 per ounce.

“The increase in the ECI from 2,5 percent to 10 percent is a further significant step by the Zimbabwean Government to boost investment and production in the gold mining sector. It is very pleasing to see the government delivering on previous policy statements to promote investment in the sector.

“As a substantial investor and producer of gold in Zimbabwe, Caledonia (Mining Corporation) and our fellow shareholders in Blanket (Mine) are a beneficiary of this and other recent policy changes as we invest to grow production at Blanket to 80 000 ounces by 2021.

“Furthermore, as we have previously announced in our 2017 MD&A Blanket will be investing an additional $4million in exploration and metallurgical test work on its satellite properties.

“As the business environment in Zimbabwe continues to improve we look forward to evaluating further opportunities to grow production,” Caledonia Mining corporation chief executive Steve Curtis said in a statement.

Caledonia’s primary asset is its 49 percent interest in the Zimbabwe based gold miner, Blanket.

Caledonia’s shares are listed on New York Stock Exchange (NYSE) and on the Toronto Stock Exchange (TSX) and depositary interests representing the shares are traded on London’s Alternative Investment Market (AIM).