Caledonia Mining confirms 20% dividend hike

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By Zimbabwe Investor on November 26, 2013. No Comments

Caledonia Mining has confirmed a 20% hike in the ordinary dividend for next year and a new quarterly payment policy.

The miner, which owns 49% of the Blanket gold mine in Zimbabwe, has announced a dividend of six Canadian cents for 2014 with a first quarterly payment of C1.5c to be paid in January.

Caledonia announced a C5c payment for the 2013 trading year in April, which followed a C5c per share special payment in February. The special was the company’s maiden dividend.

Caledonia expects Blanket’s production to expand to 48,000 ounces of gold in 2014 and 52,000 ounces of gold in 2015. Future dividends will depend on its performance and its capital investment requirements, it added.

At 11am the shares were 47.5p each, unchanged on the day.

The planned pay-out represents a yield of 7.4% at current prices and it makes Caledonia something of a rarity among the junior miners; an income stock.

“To increase the dividend is a major show of confidence, particularly in the current gold price environment,” said one analyst.

Caledonia is debt-free and at September 30, 2013 had gross cash of over $25m outside Zimbabwe.  Blanket mine is a low-cost producer: in the quarter to September 30, 2013, Blanket’s on-mine costs were US$554 per ounce of gold produced, its all-in sustaining cost was US$873 per ounce of gold and its all-in cost (which includes the investment in expansion projects) was US$999 per ounce.