Caledonia Mining declares 9.1pc rise in quarterly dividend

The AIM-traded firm said that was a 9.1% increase on its previous quarterly dividend of 6.875 cents.

Its board said the company’s financial performance had improved as a result of increased production, and the continued higher gold price.

Caledonia said that looking ahead, the Central Shaft would be commissioned in the fourth quarter of 2020, and added that it was targeting production of 80,000 ounces of gold per annum from 2022.

“I am pleased to announce a 9.1% increase in the dividend which reflects our increased confidence in the outlook for our business,” said chief executive officer Steve Curtis.

“As we reported in mid-November 2019 when we published the results for the third quarter of 2019, our financial performance has improved due to increased production and the continued higher gold price.

“This improvement has continued through the final quarter of 2019.”

Curtis said that, as the company approached the end of its five-year investment programme at Blanket Mine, it was expecting the rate of capital expenditure to reduce from the middle of 2020, giving management “greater flexibility” to consider deploying some of its cash reserves on an increased dividend.

“We expect the Central Shaft to be commissioned in the fourth quarter of 2020.

“Thereafter we look forward to further increases in operating cash flow as production increases to the target rate of 80,000 ounces of gold per annum from 2022, as capital expenditure falls further and we begin to realise the operational efficiencies arising from the new shaft.

“The board will review Caledonia's future dividend distributions as appropriate while considering the balance between delivering returns to shareholders, pursuing the significant growth opportunities within Zimbabwe and maintaining a prudent approach to financial management.”

At 1258 GMT, shares in Caledonia Mining Corporation were up 1.63% in London, at 625p.