Caledonia Mining Corporation (LON:CMCL TSE:CAL OTCBB:CALVF) CFO Mark Learmonth talks to DirectorsTalk to explain the 6 month cap & collar hedge, how it works, why CMCL entered into it and how it de-risks the company.
Caledonia Mining Corporation is an exploration, development and mining company focused on Southern Africa. Caledonia’s primary asset is a 49% interest in the Blanket Mine in Zimbabwe which produced over 45,500 ounces of gold in 2013 at a cash cost of US$613/oz.
Blanket Mine, ZimbabweThe Blanket gold mine re-started production in April 2009 after a temporary shut-down due to the economic difficulties in Zimbabwe. In late 2010, Blanket successfully completed an expansion project which increased production capacity from 24,000 ounces of gold per annum to 40,000 ounces of gold per annum.
As an indigenised entity, Blanket can implement its long term growth strategy. The Blanket board, which includes representatives of the Indigenous Zimbabwean shareholders, approved a capital investment programme for 2013 and a 4 year growth strategy for 2014 to 2017. This investment programme, which was endorsed by the Caledonia Board, is estimated at US$37 million, will be funded from Blanket’s internally generated cash, and is expected to result in progressive increases in gold production.
