Caledonia Mining Corporation Plc (LON:CMCL) has today announced 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.
On April 1, 2020 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.
Highlights
· The dividend is maintained at the increased level of 7.5 cents per share following the dividend increase effected in January 2020
· 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
· Dividend will be paid on May 29, 2020
· 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
· Blanket Mine continues to support initiatives to combat the spread of COVID-19 in Zimbabwe
A key consideration in the decision to defer the April dividend was uncertainty relating to Blanket’s supply chain from South Africa. During the initial lockdown, Blanket operated using its inventories of consumables and spare parts. However, the South African mining industry and its allied supply sector is restarting operations and Blanket has partially resumed the procurement of consumables and equipment despite the lockdown period being extended.
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 per cent of its target production rate. The Zimbabwe lockdown has been extended by a further 14 days, but Blanket, and the Zimbabwean mining industry in general, has been granted special dispensation to continue operations.
Blanket continues to support initiatives to combat the spread of COVID-19 in Zimbabwe. Blanket Mine has donated ZWL 16 million via the Chamber of Mines Zimbabwe to assist in the fight against COVID-19 and has committed to make further weekly donations of ZWL 5 million to COVID-19 related projects provided it continues to operate at a reasonable level of production; and Blanket has provided practical assistance and supplies to local authorities in its area.
Leigh Wilson, Caledonia’s Chairman, commented:
“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. Blanket has also made substantial contributions to fight the COVID-19 pandemic in Zimbabwe: provided Blanket maintains a reasonable level of production, it will make further significant contributions. Against this backdrop, and in light of the Company’s consistently healthy balance sheet, the board feels it appropriate that Caledonia declares the quarterly dividend which had previously been deferred.
“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.
“Our balance sheet remains in an enviable position and the dividend remains comfortably affordable. Today’s announcement is a continuation of the prudent approach to capital allocation that we have followed for several years – a path that we expect to continue.”
The relevant dates relating to the dividend are as follows:
· Ex-dividend date: May 14, 2020
· Record date: May 15, 2020
· Dividend cheque mailing date: May 29, 2020
Shareholders and depositary interest holders in Canada and the UK will be paid in Canadian Dollars and Sterling respectively. The Canadian Dollar and Sterling dividend payments will be calculated using the relevant Bank of Canada exchange rates on the record date.
Caledonia’s Dividend Policy
Caledonia’s strategy to maximise shareholder value includes a quarterly dividend policy which the board of directors adopted in 2014. The board will consider future dividends and any increases in the dividend as appropriate in line with its prudent approach to risk management.
