Caledonia Mining (LON:CMCL) have seen their shares bounce on Monday afternoon following record production figures from its Blanket Mine.
The firm said that it is considering to revise future dividends, and following the update today these could rise.
At the start of the month, Caledonia said it would be paying $0.075 quarterly dividend, which was 9.1% higher than the previous figure.
The firm said that it had delivered strong performance from the Blanket Gold Mine in Zimbabwe.
The mine produced 16,875 ounces of gold in the last quarter of 2019, a record for the firm. The figure was 24% higher than the quarter before and 13% higher year-on-year
The firms total production in 2019 was 55,182 beating internal guidance which was pitched between 50,000 and 53,000 ounces.
Caledonia remain optimistic in future outlook
Looking to 2020, the Jersey-based company sees gold production between 53,000 ounces and 56,000 ounces.
Chief Executive Steve Curtis said: “I am delighted to report a production record at Blanket of 16,867 ounces in the fourth quarter. An improvement in the electricity supply and vigilant focus on grade control and production tonnage have resulted in an excellent production result for the final quarter of which our entire operational staff can be justifiably proud.
“The impressive operational turnaround was achieved without any compromises on safety. This is a commendable achievement given the distractions posed by the challenging conditions experienced by our workers due to the economic environment in Zimbabwe.”
“I am also pleased to see we have not lost this momentum as we start 2020 with the mine continuing to perform very well into the new year. With the improved operational performance and the current buoyant gold prices leading to healthy operating margins we expect Caledonia to continue its track record of strong cash generation,” Curtis continued.
“I expect 2020 to be a landmark year for our business: we look forward to commissioning the central shaft later in 2020 which we anticipate will then deliver increased operating cash flows and reduced capital expenditure will follow.”
Shareholders remain impressed after beating annual guidance
In July, the firm said that it planned to retain its full year guidance as it updated shareholders on its Q2 activity.
The Company stated that 12,712 ounces of gold were produced during Q2, which represented a 6.4% rise on the 11,948 ounces for Q1.
Caledonia Mining retained its full year guidance of 53,000 – 56,000 ounces despite H1 output standing at just 24,660 ounces; this was 3.4% lower than last year’s volume of 25,582 ounces.
The Company currently holds a 49% in Blanket Mine, but has penned a conditional agreement to expand this to 64%. It said it remained on target to reach its 80,000 ounces per annum target for 2022.
“As at March 31, 2019, Caledonia had cash of approximately US$9.7 million. The Company plans for Blanket to increase gold production from 54,511 ounces in 2018 to approximately 75,000 ounces in 2021 and approximately 80,000 ounces by 2022,” the Company said.
Zimbabwe Operators
Firms that hold operations in Zimbabwe have also given the market solid updates over the last few months.
Notably, Botswana Diamonds PLC (LON:BOD) and Vast Resources PLC (LON:VAST) have announced a deal to replace the Heritage concession agreement between the two firms.
The new agreement outlines the formation of a new company which holds the interest of Vast Resources,the Chiadzwa Community joint venture and Katanga Mining (TSE:KAT).
Additionally, the agreement expresses the intent to issue new shares representing 2.5% of the newly formed company to Botswana Diamonds once the detailed agreement between Katanga and Zimbabwe Consolidated Diamond Co becomes effective.
Shareholders of Caledonia Mining will be pleased with the update today, as 2020 could be a year of growth and expansion for the London listed miner.
Shares in Caledonia Mining trade at 668p (+5.20%). 13/1/20 13:49BST.