CALEDONIA Mining expected 2020 to be “a landmark” year for the Zimbabwean gold producer after reporting higher than guided production of 55,182 ounces in 2019 – above the 50,000 to 53,000 oz guidance previously provided.
This was owing to strong grade control and an improvement in the electricity supply during the fourth quarter in which record production of 16,876 oz was achieved. It added that it had not lost momentum in the current first quarter.
On January 5, Caledonia unveiled a 9% lift to its quarterly dividend – an increase it said was motivated by an increase in production and the stronger dollar gold price.
“I expect 2020 to be a landmark year for our business: we look forward to commissioning the Central Shaft later in 2020 which we anticipate will then deliver increased operating cash flows and reduced capital expenditure will follow,” said Steve Curtis, CEO of Caledonia in a production update.
The expansion would take production to 80,000 ounces a year of gold by the firm’s 2022 financial year. Production for 2020 has been put at 53,000 to 56,000 oz.
Trading couldn’t be more difficult in Zimbabwe with power supply from the national grid under constant threat whilst foreign exchange restrictions imposed by Zimbabwe president Emmerson Mnangagwa’s administration has hampered the expansion of Blanket. Just over a year ago, Caledonia was saying the expansion programme was under threat.
By November, however, Caledonia said it was benefiting from a revised electricity tariff which allowed for the funding of imported electricity provided it is used exclusively to supply participating mining companies.
The increased dividend – equal to 7.5 US cents per share – is 9.1% better than the 6.875 cents paid quarterly previously.