ZIMBABWEAN gold producer, Caledonia Mining, raised the quarterly dividend and announced its Central Shaft project – which will increase the firm’s annual gold production by a third to about 80,000 ounces a year – had been commissioned.
“I am delighted to announce that our new Central Shaft, which is the deepest shaft of any gold mine in Zimbabwe, is fully operational,” said Steve Curtis, CEO of Caledonia Mining in a statement. “Commissioning the Central Shaft has been the culmination of a six-year project costing approximately $67m, all funded through internal cash flow.”
Caledonia has guided to production of between 61,000 and 67,000 oz of gold in 2021, reaching 80,000 oz a year from 2022.
The commissioning of the Central Shaft also signalled a decline in the firm’s capital expenditure which was cited by Curtis as one of the reasons it would pay a first quarter, 12 US cents per share. Since it announced its first dividend increase in 2018, Caledonia Mining has increased the payout by a cumulative 75%. The payment date was set for April 30.
Shares in Caledonia Mining are just over 60% higher on a 12-month basis.
The company recently embarked on an expansion strategy, announcing in December that it had bought a $2.5m option over a gold exploration prospect situated in Zimbabwe’s Gweru mining district, known as Glen Hulme, in the country’s Midlands.
In October, Curtis signed a memorandum of understanding with the Zimbabwean government to evaluate some of the gold assets of Mining Development Corporation, a state-owned company.
In November, Curtis said at the Junior Indaba, a conference in Johannesburg: “We recognise that being a single asset company won’t move the needle. We see our way with two or three projects of about 350,000 to 500,000 oz/year”.