Caledonia surpasses gold output target

HARARE - Toronto Stock Exchange-listed Caledonia Mining Corporation (Caledonia) says it surpassed its gold production target of 44 000 ounces for 2013 by 3, 4 percent spurred by investments in its exploration and development projects.

This comes as the southern Africa-focused miner’s total gold production for 2013 at its subsidiary Blanket Mine was 45,517 ounces, a 0, 1 per cent increase over the annual gold production in 2012 of 45,463 ounces.

“Production for 2013 was little changed from 2012 notwithstanding the fact that during 2013 the achieved head grade returned towards the normal life of mine average of 3,84 grams per tonne, as previously advised,” said Stefan Hayden, Caledonia's president and chief executive in a production update.

He added that this year, they were targeting 48 000 ounces having done all the necessary groundwork to achieve this.

"The underground development that is required to achieve the projected increase in gold production to 48,000 ounces in 2014 has been completed and I look forward to Blanket delivering this increased level of production in 2014," said Hayden.

During the last quarter of 2013, 11,417 ounces of gold were produced representing a 3, 4 per cent decrease on the 11,821 ounces of gold produced in the same period of 2012.

“Gold production in the fourth quarter of 2013 was adversely affected by a three-day shut down of the milling plant for essential maintenance and also by a lower realised head grade which, as previously advised, is returning towards the long term mine average grade of 3,84 grams per tonne,” said the miner.

Caledonia expects that its financial results for the quarter and year to December 31, 2013 to be released on March 31, 2014.

The gold miner has already declared a $0,015 dividend per share for its first quarter to December 2013.

This comes as the company recently announced that it would be declaring dividends on a quarterly basis.

Caledonia’s primary asset is Gwanda-based gold miner, Blanket Mine, in which it holds a 49 percent stake after complying with Zimbabwe’s indigenisation policy.

Indigenous Zimbabweans, who through various schemes own 51 percent of Blanket Mine, are expected to benefit from the new dividend policy.

The National Indigenisation and Economic Empowerment Fund holds 16 percent, a consortium of indigenous Zimbabweans holds 15 percent, the Blanket Mine Employees Trust 10 percent while the remaining 10 is in the hands of the Gwanda Community Share Ownership Trust.

The new dividend policy, which is likely to be welcomed by shareholders, was approved by the company board as a long term measure to maximise stockholder benefits.

“Shareholders who are registered in the United States of America and the United Kingdom will be paid in US Dollar and Sterling respectively.

The US Dollar and Sterling dividend payments will be calculated using the relevant Bank of Canada exchange rates at noon on the Record Date and will be after deduction of Canadian withholding tax and any other taxes that may apply,” said the miner.

Caledonia’s long term strategy to maximise shareholder value includes a quarterly dividend policy.

In 2014, the company intends to pay an annual aggregate dividend of six Canadian cents per common share, payable on a quarterly basis.

The Canadian-based miner is debt-free and at September 30, 2013 had gross cash of over $25 million outside Zimbabwe.

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