WH Ireland analyst Paul Smith has said of Caledonia Mining Corporation (LON:CMCL) today “Caledonia yesterday had the vote to re-domicile the company from Canada to Jersey passed (96% of the shares represented at the meeting). As previously noted this re-domicile makes sense as Caledonia’s interests are in Southern Africa with the shareholder base in Southern Africa, UK, Continental Europe as well as North America. There will also be cost savings as the company will not be subject to Canadian compliance costs and taxes and future dividends paid to shareholders outside of Canada will not be subject to Canadian withholding tax.
In our view this helps streamline the business and tax structure and helps provide a focus on its activities at the expanding Blanket gold mine in Zimbabwe. The expansion at Blanket continues to raise production from the current ~40koz/a to ~80koz/a gold with perhaps the largest infrastructure project in Zimbabwe at the current time, spending US$70m over six years – all funded. The shaft construction to allow access to the deeper ore in the centre of the orebody is well underway and will provide production infrastructure and access to new resources for years to come. With the increased production beginning to come through from the first completed underground capital projects this year (No 6 Winze resources and the new tramming loop) and an improved gold price outlook Caledonia Mining Corporation looks undervalued compared with its peers.“
