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Caledonia Mining has declared a further increased quarterly dividend of eight and a half United States cents (US$0.085) on each of the Company’s common shares.

Commenting on the announcement, Steve Curtis, CEO, says:

“We are pleased to announce a 13% increase in the dividend which reflects our continuing confidence in the outlook for our business. As we reported in our Q1 2020 results, our financial performance has been strong due to increased production and a higher gold price which has continued into Q2 2020.

“As we approach the end of the five-year investment programme at Blanket Mine, we anticipate the rate of capital expenditure will begin to reduce towards the end of 2020, which gives us greater flexibility to consider deploying some of our cash reserves on an increased dividend.

“We expect the Central Shaft equipping to be completed in the fourth quarter of 2020; thereafter we look forward to the commissioning of the shaft and further increases in operating cash flow as production is expected to increase by over 30% over the coming 24 months to approximately 75,000 ounces in 2021 and 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.

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“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.”

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Highlights

• 13% increase from the previous quarterly dividend of 7.5 cents, which, together with the increase to the dividend in January 2020 from 6.875 cents, represents a cumulative 24% increase since October 2019
• Significant business resilience demonstrated through the COVID-19 pandemic with gold production levels still within the range of 2020 guidance of 53,000 – 56,000 ounces
• Stable production, a high gold price and good cost control have resulted in increased cash generation in 2020; this has given the board confidence that the business can sustain a higher level of dividend distributions
• Central Shaft on track to be completed in Q4 2020.
• Target production of 80,000 ounces of gold per annum from 2022