Chronicle Editor
Oliver Kazunga, Senior Business Reporter
CALEDONIA Mining Corporation, which owns Blanket Mine in Gwanda, Matabeleland South province, has implemented a second quarterly dividend payment for this year.
Early last month, the mining group announced that it had been forced to defer payment of its second quarterly dividend amounting to US$900 000 that was scheduled for April.
Caledonia attributed the deferral of the dividend payment to the uncertain business environment due to the outbreak of the Covid-19 global pandemic.
“Caledonia announces that its board of directors has declared a dividend of seven and a half United States cents (US$0, 075) on each of the company’s common shares.
“The dividend will be paid on May 29, 2020.”
It said on April 1, the board deferred the decision to declare the quarterly dividend in light of the uncertainty surrounding the Covid-19 pandemic.
“The board has been encouraged by the continued operations of the Blanket Mine and the re-opening of important supply lines, accordingly the quarterly dividend has now been declared,” said the mining firm.
A key consideration in the decision to defer the April dividend was uncertainty relating to Blanket’s supply chain from South Africa.
However, the South Africa mining industry and its allied supply sector is restarting operations and Blanket Mine has partially resumed the procurement of consumables and equipment despite the lockdown period being extended.
Caledonia said a strong balance sheet with current cash on hand of $14,1 million at April 24, 2020 gives the directors sufficient confidence in the solvency of the business and its resilience in the current macro-economic environment.
It said Blanket’s supply chain of consumables and spare parts improved substantially and is close to normal.
“Blanket is now re-establishing full production having operated at approximately 93 per cent of capacity during lockdown,” said Caledonia.
Blanket Mine has operated throughout the 21-day lockdown in Zimbabwe, which came into effect from March 30, 2020 with permission from the Government. During this period, Blanket has modified its operating procedures to safeguard against the spread of Covid-19 resulting in Blanket operating at approximately 93 percent of its target production rate.
Caledonia chairman Mr Leigh Wilson was quoted as saying:
“Blanket Mine has continued to operate during the recent regional shut down. It has paid its workers, suppliers and the Zimbabwe tax authorities as usual; and it has continued to generate substantial foreign exchange for Zimbabwe.”
He said Blanket has also made substantial contributions to fight the Covid-19 pandemic in Zimbabwe.
It is hoped that anchored on Blanket’s ability to maintain a reasonable level of production, the gold mining operation will make further significant contributions to the fight against Covid-19.
“Our ability to make this dividend payment whilst at the same time making larger contributions to the fight against Covid-19 is testament to the resilience of our business.
“The continuation of the Caledonia dividend will, as usual, depend on factors including: Blanket maintaining a reasonable level of production; receiving payment in full and on-time for all gold sales; being able to make the necessary local and international payments and being able to replenish its supplies of consumables and other items,” said Mr Wilson. — @okazunga
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