Caledonia says Zimbabwe expansion on the cards in 2022 after paying 14c dividend

CALEDONIA Mining announced a 14 Canadian cents per share dividend for the fourth quarter and said it would turn its attention to building new mines in Zimbabwe where it operates the Blanket mine.

The dividend represents a doubling over the last two years as the company completed the $60m deepening of Blanket’s central shaft that will take production to about 80,000 ounces of gold a year. Production for 2022 is forecast to be between 73,000 and 80,000 oz.

Steve Curtis, CEO of Caledonia Mining, said at an investment conference in 2020 that the company would prioritise expansion once it had completed the Blanket project. “We recognise that being single asset won’t move the needle. We see our way with two or three projects of about 350,000 to 500,000 oz a year,” he said.

Commenting on January 4, Curtis said: “Now that the Central Shaft is complete the company can focus on other areas of its growth strategy, predominately de-risking the business from being a single asset producer.

“Last year we announced the acquisition of Maligreen, one of the more significant exploration opportunities in Zimbabwe. We see huge geological potential in Zimbabwe, and we continue to evaluate other investment opportunities in the country”.

Caledonia said in September it had bought the Maligreen project in the country’s Gweru district for $4m and would spend $1.6m more over the next 18 to 24 months exploring the brownfields prospect.

Maligreen has an inferred mineral resource of approximately 940,000 oz of gold. Two open pit mines on the prospect produced 20,000 oz of gold a year between 2000 and 2002 before they were closed.

In December 2020, the company announced it had bought a $2.5m option over a gold exploration prospect Glen Hulme, also in Gweru.